Miriam Meckel is giving a Berkman lunchtime talk on “Communicating Trustworthiness: Drivers of Online Trust.” She will present research she has been doing at U. of St. Gallen along with government and some businesses. She’s investigating how trustworthiness is communicated, and what the initial drivers and cues are. She’s going to look at the changing conditions, some basic ideas on initial trust formation, then her study, and then the cues identified in initial trust formation.

Users’ willingness to provide data about themselves depends on some sort of trust. There’s been much discussion about this, including the importance of preserving privacy. For example, Facebook restricted info about users to the user’s schoolmates, but over time it has become far more permissive. (See here for article and diagram.) Both Facebook and Google have said things indicating they believe our attitude towards privacy has changed. E.g., Eric Schmidt: “If you have something you don;’t want anyone to know, maybe you shouldn’t be doing it.”

What is trust? Miriam provides three definitions, each of which involves vulnerability. When we trust someone online, we understand we are making ourselves vulnerable in various ways. Trust enables us to manage the complexity of our social world, reduces the cost of negotiations, facilitates the adoption of new technologies, and reduces perceived risks. Initial trust is especially important since you can lose a customer forever by screwing it up.

In her study, they interviewed 23 online businesses active in Germany. They also did in-depth interviews with 43 users representing a range of socio-demographic sections. From this they derived a model of nine trust drivers: Reciprocity and exchange, proactive communications, user control, brand, third party endorsements, design of user interface, offline presence, technology, and customer service. Then they did a quantitative survey of German users to find out how the different factors are applied to diff business models. 11,000 users from across socio-demographic segments were invited to participate in an online survey for a little money, with a response rate of 12%.

She goes through the nine components of trust:

Reciprocity explains about 35% of the variance of the data. The mutual relationship of customer and organization is crucial. Users are willing to hand over personal info, if they know what they gain from it, if it is transparent, and if both sides benefit.

Brand and reputation: A well-known, establish brand helps build trust. If it has a large customer base, it is perceived as more reputable. You also need a professional feel for the web site.

User control: Users want to know who will have access to their data. Ask permission.

Proactive communications. [missed it. sorry]

Customer service: Multiple ways to reach a person. Provision of different payment methods.

Offline presence: The existence of physical stores helps build trust. Show a photo on your web of your brick and mortar store.

Technological reliability. This can be an issue when your service involves third parties.

Third party endorsements: Not only are seals of approval helpful, but so is having a high search ranking for third parties.

The next step is how these factors are differentiated by B2C business models. Only four factors turn out to be relevant across the board: reciprocity, third party endorsements, user control, and technological reliability. Miriam looks at online shopping, online banking, etc., to see which factors are relevant [but I can’t keep up with my typing. sorry] It seems that for building trust-based relationships with potential clients, you have to have fair communication, mutual benefits signaled, privacy and security policies being displayed, clear T&C’s, engage in issues mgt to follow what is being said about you on the Web, explain the business model and data needs, explain the flow of info to third parties and what the policies are, communicate third party endorsements, engage, peer groups and communities, bring in your offline reputation, and consistently apply corporate design with good design.

Some implications: 1. Users are more willing to trust large, well-established and popular online services. High search-engine ranking can be considered a trust measure.

2. The visual appearance counts.

3. Reciprocity is very relevant in all online transactions.

4. Offline presence, technical reliability and customer service have barely been researched yet.

5. Organizations need a strategic approach for communicating trust to their stakeholders. Take an integrated communication approach, including issues and risk management. They should communicate proactively, in a conversational tone, and transparently.

What not to do? Don’t be Facebook asking Burson Marsteller to find bloggers who would attack Google.

Q: [me] Customer ratings? And the presence of customized trust mechanisms as at eBay and Amazon?
A: Third party endorsements include customer ratings. But we surveyed a represented group of German users, not ones as sophisticated as others, plus there may be cultural differences.

Q: Is your work ethical? An evil company can read your work and figure out how to appear to be ethical. Also, Germany has stronger regulatory protection, which change the signals
A: Yes, companies could fake being trustworthy.

Q: How about SSL?
A: The awareness of the need for SSL is frighteningly low.
Q: Anyone care about authentication certs?
A: [general laughter]

Q: Would the same trust drivers be applicable in news sites and other such non-sales sites?
A: Just in parts. [I can’t read her table because I’m too far back :( ]

When you look at the erosion of privacy caused just be clicking on opt-ins, you get to a point where you just accept whatever the terms are and however they’re changed.
A: People don’t read privacy policies when they’re changed.
Q: Maybe it’s that when the privacy policy looks impressive, it’s a signal of the quality of the service. But, the key question is whether people who say privacy policies are a trust driver actually read them.
Q: There’s some survey support that most people mean think that a privacy policy is there to protect your privacy. [general laughter]

Q: [me] To me, third party endorsement means you get celebrities or associations or other companies to endorse you. But the real trust-driver for me frequently is peer endorsement. Maybe it would be worthwhile to separate those two, especially since businesses need to do different things to gather other companies’ endorsements and to gain a good reputation among peers.
A: Yes, that would be interesting.

Q: What supersedes trust?
A: There may be the desire to be “in” as opposed to “out.”
Q: There are network effects are. How many of friends have to join before I throw away my privacy cBerkman

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