How Perception and Trust Shape Adoption

We can all think of specific examples of how perception influences behavior in our own markets. Some banks are seen to focus just on the corporate segment, while others are thought to reach further down market. Some MNOs are perceived to target their services to the upper class, while others appear to be geared more toward the “average consumer.” But how does a company, or in this case – a new player in the financial services market – change the way it is perceived among a new customer segment it is trying to reach with new products and services?

 

This is a tricky question because as behavioral economics tells us, people often think and act irrationally. And while perceptions are usually based on some level of reality, they can also be completely inaccurate. I read Blink by Malcolm Gladwell a few months ago, and one of the many examples in the book of the power of perception showed that just by changing the label on a can of soda, people’s perception of the quality of the drink changed even though the product inside stayed exactly the same. Add to this the fact that perceptions tend to be very personal, and we’ve got quite a mess on our hands.

 

For example, I remember hearing in one African country that having an expat as the CEO of a local company was a good thing because the population knew that s/he wouldn’t be dragged into the ethnic politics that often swayed the way businesses were run. This distance was perceived to be a good thing by some. On the other hand, other people in the same market thought that a company with a local CEO showed that the company was committed to the country and to its people. This closeness was perceived to be a good thing by others.  How is one to win?

 

This is frustratingly complex, and yet it is incredibly important to figure out. Why? Because perception is very closely linked to trust, and trust is fundamental for any sustained behavior change in the way people manage their money, and therefore for any branchless banking service to succeed. In some recent data that we gathered in Ghana, mobile money was perceived by the non-user to be more costly than the alternatives. Yet the reality is that mobile money is cheaper, if not the cheapest, way to move money in Ghana, especially at low values. On the other hand, users of mobile money understand that one of its greatest values is not just the convenience, but the price.  And users also have an accurate perception of the way mobile financial services can solve concrete financial pain points in their lives.

 

And herein lies the key – inaccurate perceptions only begin to change as customers are exposed to the accurate reality through repeated interactions. Get someone to use mobile money a few times, and they will soon see that it is cheaper than what they’ve been using. Their perception on cost will eventually change.  Guarantee (through platform reliability, agent liquidity, etc.) that the first few user experiences are positive and then other negative perceptions about trust and security will begin to disappear as well. For providers, it is critical to first understand the customer perceptions that may be holding their businesses back and then to tackle them head on.