This blog summarises the findings and conclusions from my personal dissertation which was completed between January and May 2019 in partial fulfillment for the requirements of my MBA program at the Henley Business School.
I was supervised during the research by Professor Moira Clark, Professor of Strategic Marketing at the Henley Business School and Director of the Henley Centre for Customer Management.
To compare the roles of trust and empathy in driving customer loyalty to brands in the supermarket and airline sectors.
What I expected to find
The drivers of customer loyalty remain a focal point for organisations seeking competitive advantages in crowded markets. This is especially true for the supermarket and airlines sectors where the lifetime value of an average customer is high and customers generally have a range of brands to choose from. Loyalty may be influenced by a range of factors such as price, convenience, perceptions of quality and prior experiences. I wanted to focus on just two: trust in the brand, and perceptions that the brand was empathetic.
My original perception was that trust ‘is a given’ towards established organisations in the highly regulated supermarket and airline sectors. You trust easyJet to get you from A to B safely, even if it won’t be very comfortable. You generally trust any supermarket from Waitrose to Aldi to be stocked with a range of food at an acceptable quality.
Yet I felt that empathy, or lack of it, was far more relevant in the ‘loyalty driver’ category. A charming and energetic checkout assistant could transform a dreary in-store shopping experience just as much as a stressed cabin crew member could undermine your enjoyment of an otherwise comfortable and on-time flight. These customer-employee interactions impact us emotionally, and sometimes powerfully.
My perceptions were contrary to the fact that references to empathy remain largely absent from corporate websites, CEO statements or company annual reports. Trust remains a buzzword, but empathy still does not seem to get much attention, and the customer-facing employees are still usually the worst paid.
Definitions used in the research
Accurately assessing the levels of trust, empathy and loyalty felt by customers obviously presents some challenges. Most important to clarify are the interpretations of each construct which I used throughout the research:
“[Brand trust is] the confident expectations of the brand's reliability and intentions in situations entailing risk to the consumer”
Delgado-Ballester et al (2003, p.37)
“[Empathy is] the ability to understand and share the feelings of another.”
Oxford Dictionaries (2019)
“A deeply held commitment to rebuy or re-patronise a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behaviour.”
Oliver (1999, p.34)
Data was collected via a 28-question online survey which, using validated scales, measured the levels of trust, empathy and loyalty that respondents felt towards the brand they patronised most often in the supermarket and airline sectors.
The results discussed here are based on the first 100 responses received over a 3-day period in March 2019, during which the survey link was shared to my LinkedIn network. Among the initial respondents the gender split was 54% male and 46% female and 80% were in the 26 to 55 age group. The majority were based in the UK.
The data-set will be expanded to 1000 respondents later in 2019 to test the findings of this pilot although a range of reliability, correlation and significance tests were performed to ensure the findings from this study were highly likely (i.e. more than 70% probability) to be corroborated in an expanded version.
What I found
Supermarkets show more trust and empathy than airlines
First, I looked at the raw levels of trust, empathy and loyalty people felt towards their chosen brands. Overall, it was a pretty even picture. Trust was slightly higher in supermarkets and empathy was slightly higher in airlines. Respondents seemed to feel more loyal to supermarkets than to airlines.
Budget supermarkets provide a poorer shopping experience than Tesco and Sainsbury’s but inspire more loyalty
Delving into the supermarket data, respondents appeared to feel very loyal to budget brands like Lidl and Aldi, and saw more premium brands like Waitrose as trusting and empathetic.
In the trust and empathy stakes, EasyJet beats Ryanair, Virgin outperforms BA and international airlines generally well surpass all UK operators
In the airlines sector, the overall trust and empathy scores were lower than supermarkets, with Ryanair performing especially poorly. Among British brands represented, Virgin easily outperformed British Airways, although the various international premium operators mentioned, like Emirates, easily outscored Virgin.
People feel more loyal to supermarkets than airlines: they really don’t like Ryanair and they really love Waitrose
The Net Promoter Score table below (the higher the result the better) again shows the greater loyalty customers feel towards their supermarket compared to their airline. Generally, customers have more freedom over choice of patronage towards supermarkets than airlines, and are more in control of their experience (compare being trapped on an overnight flight versus a 30 minute dash around the supermarket).
The real purpose of the study though was to see whether trust or empathy had a greater influence on loyalty. Linear regression tests were performed on the results to show definitively what proportion of the loyalty scores were explained by either the trust or empathy scores.
Empathy is a better predictor of loyalty than trust for supermarket brands with a clear identity (i.e. either budget or premium)
Whilst the empathy scores for budget brands like Aldi and Lidl were not especially high, the findings show that they are a strong mediator of loyalty. As brands, these stores are really understanding customer demand for value and convenience – at the expense of a great customer experience. Unsurprisingly, customers of Waitrose and M&S do really care about being shown empathy from staff. For brands which are harder to differentiate by price like Sainsbury’s, Tesco, Morrisons, Asda and Co-Op, trust is a more important loyalty driver.
Budget airline passengers just want to get from A to B as quickly and cheaply as possible, whilst more expensive operators will achieve more loyalty by being more empathetic
Here, empathy comes out as a slightly stronger influence on loyalty for BA, Virgin and Thomas Cook – and the International category. For the budget operators like easyJet and Ryanair, empathy is barely a factor.
Overall, reliability and consistency of service still trumps a personal, memorable experience… just…
With all the responses aggregated, I found that the levels of trust in the brand had a marginally greater influence on loyalty than the empathy shown towards its customers by the brand as a whole and its employees:
Managerial implication 1:
Measure customer perceptions of trust and empathy throughout the customer experience journey
Whilst brands already seem to be focusing heavily on trust, empathy is receiving less attention as a standalone construct, but in many cases is a greater driver of loyalty. Measuring trust and empathy in the brand-customer relationships is essential to provide the awareness to organisational leaders of where to focus trust and empathy enhancing activities and how to benchmark their impact and ongoing effectiveness.
Managerial implication 2:
Identify which trust and empathy enhancing activities befit the identity and strategic objectives of the brand
The research shows that budget brands can generate positive word-of-mouth purely by offering value and convenience. Trust, and by extension empathy, can be enhanced for these brands by constantly delivering on this offering and listening to what customers want. Premium brands seeking to increase market share may be best to focus on frontline employee training and welfare, to ensure those personal customer interactions are positive and memorable. Shoppers who are prepared to pay more seem to seek a more human customer experience, though investment in employee training may be a waste of money for budget brands seeking to remain true to their reputation. Some established brands, like Sainsbury’s and British Airways, are neither seen as a budget nor premium and this lack of identity risks hampering the selection of an appropriate strategy to enhance customer loyalty.
Managerial implication 3:
Learn what competitors and brands in other sectors are doing to enhance trust and empathy in the customer experience
Among the principles of the ‘experience economy’ is a merging of products and services and business-to-business and business-to-consumer markets. In the context of customer experience providing the basis for competitive advantage, innovations occur so often that brands who lose touch with what their competitors and other businesses are doing risk being left behind. In this study, Waitrose achieved a very strong NPS result and several respondents referenced the way Waitrose’s employees are treated as a key factor behind their own strong loyalty – something British Airways (especially in light of recent headlines) might do well to take note of.
What most managers are really interested in is financial performance, and without the correlation to actual re-purchasing behaviour the measures of trust, empathy and loyalty are only partially helpful. Many people trust, like and feel an affinity towards certain brands but it does not mean they are going to open their wallet. Similarly, as evidenced by the budget airline responses here, people do not necessarily need to feel great about a brand in order to be a customer of it.
Therefore, any measure of these constructs or how people ‘feel’ should be easy to correlate with financial KPIs to ensure the organisation is working for all its stakeholders – customers, employees, leadership and shareholders. And as per the British Airways case referenced above, to gain a truly holistic view of how people feel, just asking customers is not enough. We know that the customer experience emerges from the employee experience, so measuring and improving the levels of trust, empathy and loyalty felt by employees towards their leadership is a commercial imperative for organisations seeking competitive advantages by increasing customer loyalty.
If you are interested in exploring these issues further then you might be interested in the following:
My company, RiddleBox, measures the quality of relationships across organisations by assessing levels of trust and empathy and its impact on loyalty, commitment and satisfaction – and ties the insights back to key performance indicators each quarter throughout a financial year. Click here to find out more
This summary is intentionally brief. If you would like to receive a copy of the full study, please email me at firstname.lastname@example.org, which is also the place to reach me if you’d like to discuss the findings in more detail
I attach a list of relevant resources for further insights and comparative studies on these topics. Enjoy!
Feel free to comment below to ask a question or give your own perspective :)