(2022-11-21) Breaching The Trust Thermocline Is The Biggest Hidden Risk In Business

Gareth Edwards: Breaching the Trust Thermocline Is the Biggest Hidden Risk in Business. In large bodies of water, the temperature drops slowly the deeper one dives. That change can, if the descent is slow enough, feel almost imperceptible. Yet at a certain point, the water temperature drops sharply and alarmingly. This point is the thermocline—a near-physical barrier where warm water meets cold. The shift between the two is sudden and dramatic.

In business, particularly digital services or businesses relying on a subscription revenue model, trust works in the same way. Wired into those products and services is a “trust thermocline.” It is a point which, once crossed, otherwise healthy businesses and products suddenly collapse.

The easiest way to understand how trust thermoclines work is to look at how they fail. Content services, both print and digital, are particularly prone to these failures. So are social media networks or businesses that focus on delivering quality-of-life monthly services—from TV streaming to beers of the month. Broadly, any business in which the consumer forming an emotional relationship with the product contributes to adoption is at risk of such failures.

suddenly, over a short period of time, sales and user numbers collapse. Consumers move to seemingly inferior products or simply disengage completely from the business.

These collapses happen because most businesses fail to properly understand how a reliance on emotional engagement changes the way consumer trust in their product works. That reliance is particularly common with digital products or social media, where personal image, follower count, and “influencer” behavior are a critical part of the user experience.
The greater the emotional engagement, the more trust is a communal asset, not an individual one.
The concurrent loss of trust by many users is what makes such a breach so dangerous. Many businesses fail to spot the risk of these collapses because they treat customer experience as a linear system.

But the trust thermocline is non-linear. Nonlinear systems are those in which causes can happen far in advance of their effects, even when a direct relationship between them can be identified.

As a result, many of the issues that cause a consumer to approach —and ultimately cross—the trust thermocline can have happened in the past. “Stickiness” is for real: a consumer will persist in a bad economic or product relationship beyond the point where it makes logical sense to do so because an element of the trust, and emotional commitment, remains.
But once that thermocline is crossed, there are few routes back.

Trust thermoclines are so dangerous for businesses to cross because there are few ways back once a breach has been made, even if the issue is recognized.

Most of them rely on having sufficient financial reserves or product lock-in to be able to skip a generation of consumers and start again. Microsoft’s lock-in on its business software enabled them to weather a significant pre-millennium storm, and a hard pivot toward gaming with its Xbox gave the company time to rebuild relationships with business tech consumers. That salvaging its reputation took almost 20 years shows how serious a breach of the trust thermocline can be.

In most cases, though, the only real solution is to avoid crossing the trust thermocline at all. It requires placing emotional engagement and trust at the heart of product strategy, and accepting that the causes of trust failures are non-linear.

Twitter was already experiencing a number of issues that large percentages of its user base considered to be breaches of trust even before Elon Musk’s takeover—issues like fake accounts and spam, failures to act promptly on disinformation, and uneven or confusing applications of its moderation policies.

His plans to overhaul verification and turn it into a pay-to-play service have not only aggravated the existing trust concerns, but raised them for an entirely new group as well: the big brands who maintain a presence and, crucially, pay to advertise on Twitter.

Former digital service poster-child Evernote has learned this same lesson. One of the first cloud-based note services, Evernote once boasted over 220 million users. Starting with the removal of its free tier in 2016, a series of poor decisions on pricing, device restrictions, and privacy eventually led to a rapid decline in users at a time when the firm still seemed unchallengeable in the marketplace.

Nor is Twitter the only big company with potential thermocline problems. Firms like Netflix and Disney’s Parks Division have been sinking slowly towards their own thermoclines as well. In the case of Netflix, users are witnessing a reduction of catalog depth alongside price increases, the introduction of an advertising tier, and shifting subscription models. Disney faces the growing perception among fan communities that its parks do not provide a sufficiently differentiated experience from regular theme parks; they just cost significantly more.

“How did you go bankrupt?” the character of Bill asks another character in Ernest Hemingway’s The Sun Also Rises. “Gradually, then suddenly,” comes the reply. Businesses need to be aware that if their product relies on emotional engagement with the consumer, a breach of the trust thermocline may see them experience the same.