When we talk about trust in business, we often focus on how it influences customer behavior—how much more they’re willing to pay (Trust Premium) and how often they choose you over competitors at the same price (Trust Preference). But trust doesn’t just drive revenue; it has an even greater impact where it really matters—your bottom line.
Many business owners focus on increasing revenue, but revenue alone doesn’t sustain a business. It’s the profit—the money left after covering all expenses—that determines success. And that’s where trust delivers a multiplier effect.
How Trust Premium Boosts Profitability
Let’s start with the numbers. Based on my research, a reasonable assumption for Trust Premium is around 20%. That means customers are willing to pay 20% more for the same product or service because they trust you. If your product originally sells for $100, trust allows you to price it at $120. That’s a straightforward 20% revenue boost—but the impact on profit is even more significant.
To understand why, let’s break down business expenses into two main categories:
Variable expenses (Cost of Goods Sold - COGS): These are costs that increase with each sale, like materials, labor, or direct service costs.
Fixed expenses: These stay the same regardless of how many sales you make—things like rent, insurance, marketing, and administrative costs.
Now, let’s assume your variable costs for a $100 product are $50, leaving you with a gross profit of $50. When you add a 20% Trust Premium, your price goes up to $120, but your variable costs remain at $50. That extra $20 goes straight to your gross profit, raising it from $50 to $70—a 40% increase in gross profit, just from trust alone.
But it gets even better. Let’s say your fixed costs per unit sold are $30. At the original $100 price point, your net profit after both variable and fixed expenses is $20 ($100 - $50 - $30). But with Trust Premium raising the price to $120, and expenses staying the same, your net profit jumps to $40—doubling your profitability!
Yes, you read that right. A 20% increase in price leads to a 100% increase in net profit. That’s the hidden power of trust—every extra dollar earned from Trust Premium goes straight to profit because your costs don’t rise alongside it.
How Trust Preference Multiplies Growth
Trust doesn’t just allow you to charge more—it also brings you more customers. That’s Trust Preference in action. When trust is high, more people choose you over competitors, increasing your sales volume.
Let’s compare two scenarios:
Low Trust Preference (50%) – Customers split their purchases between you and competitors. You only capture half of the potential market.
High Trust Preference (100%) – You win all potential customers because they trust you over the competition.
If you sell a single unit at $100 with a 50% Trust Preference, your revenue is $100. But if you gain full market preference and double your sales volume, your revenue jumps to $200. Since both variable and fixed expenses remain proportionally the same, your net profit also doubles.
Again, trust isn’t just helping you win more business—it’s making every dollar earned more profitable.
Trust Lowers Customer Acquisition Costs
Another overlooked benefit of trust is its ability to reduce Customer Acquisition Costs (CAC). The more customers trust you, the less you have to spend on marketing and sales efforts to attract them.
Think about it: If your reputation is strong, customers come to you through referrals, repeat business, and word-of-mouth, rather than through expensive advertising campaigns or cold outreach. That means:
If you have no capacity limits, trust helps you grow revenue without increasing your marketing budget.
If you have capacity limits (like a consultant who can only take on a certain number of clients), trust allows you to hit your revenue goals with far less effort and expense.
For example, let’s say your marketing expenses are originally $30 per unit sold. With high Trust Preference, you need to spend less on marketing because customers seek you out. If you can cut marketing costs down to $20 per unit while maintaining the same revenue, your net profit increases by 50%, simply because trust makes selling easier and cheaper.
Trust is a Financial Multiplier
When you put it all together, the effects of trust on profitability are undeniable:
Higher Revenue: Trust Preference brings in more customers.
Increased Pricing Power: Trust Premium allows you to charge more without increasing costs.
Reduced Costs: Trust lowers marketing and sales expenses, increasing profit margins.
At the end of the day, trust isn’t just a feel-good factor—it’s a tangible, measurable driver of financial success. The businesses that invest in earning and maintaining customer trust don’t just survive; they thrive. Trust is not just a competitive advantage—it’s a profit multiplier.
Want to hear the whole story? https://podcasts.apple.com/us/podcast/s16e8-the-bottom-line-impact-of-the-trust-premium/id1569249060?i=1000695846512
Dr. Yoram Solomon is an expert in trust, employee engagement, teamwork, organizational culture, and leadership. He is the author of The Trust Premium, The Book of Trust, host of The Trust Show podcast, a three-time TEDx speaker, and facilitator of the Trust Habits workshop and masterclass.
The Book of Trust®, The Innovation Culture Institute®, and Trust Habits® are registered trademarks of Yoram Solomon. Trust Premium™, the Relative Trust Inventory™, and The Trust Show™ are trademarks of Yoram Solomon.
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