Trust is one of the three factors that assures the existence of collaborative economy, as Uber or Airbnb, the other two being the existence of a community and the wiliness to exchange. Interactions among individuals inside the community are essential as they build trust and tolerance and generate a social capital – social networks and the norms of reciprocity and trustworthiness that arise from them.
The Importance of Trust
The process of exchange is seen as the primary role of marketing, making the market focus on customers’ needs, wants and preferences to develop its relations and possible exchanges. Through exchange, consumers can buy or access products, develop relationships and achieve social and economic objectives. There are different modes of exchange (market exchange, gift giving and sharing), each guided by different principles and logistics, which allows for differentiation among them.
Sociologists George Wood and Juan Judikis define a community as “a group of people who have a sense of common purpose(s) and/ or interest(s) for which they assume mutual responsibility, who acknowledge their interconnectedness, who respect the individual differences among members, and who commit themselves to the well-being of each other and the integrity and well-being of the group”.
Trust and New Entrants
Trust has been always a key factor for every business’s success. If customers trusted one’s brand and its products or services, one would have a solid clientele as long as it lasted. The online market does not operate differently and trust is becoming its most valuable currency. This transformation was caused by a demand for a safer platform as the participants of the marketplace are virtually acquiring products or services from known and unknown companies or even unknown people. According to a 2014 study, the success of companies, especially the ones operating in collaborative economy models, is built on reputation and trust.
Due to this, in order to make transactions safer and less risky, companies are gathering data with ratings, testimonials, photos and videos of the products and reviews from specialists to develop a “reputational network”. The figure below, taken from the article “Where does loyalty lie in the collaborative economy?” written by Rachel Botsman, a collaborative economy global expert, in 2015 shows the value of reputation inside the sharing economy model, where the level of trust and reputation are proportional, thereby leading to a higher probability of transactions.
The Trust Market
The search for the generation and analysis of this data, creating this reputational network, is so big that a market opportunity appeared and companies like TrustCloud are trying to create a database of reputation rating that can be used by different websites. However, with its 1.79bn monthly active users, Facebook has the potential and is pointed to become the arbiter of online trust as it has already over passed the churn being linked and engaged with millions of external websites and people from all around the globe.
For incumbents or new entrants, disregarding their market, the measurement of trust is a success key to thrive in the market. As people have a bigger range of products or services to choose from, having a filtering governance will become a competitive advantage and allow an exponential growth of the system.
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