Decision #884AcceptedTrack · Product Strategy4 min read

Only 39% of People Trust Tech Companies. Here's How to Fix That

Only 39% of people trust tech companies to prioritize customers over profit, per Edelman. Value gaps are why — and three fixes, including one that lifted MRR 20% in a week.

How Product-Led Organizations Build Trust With Customers
How Product-Led Organizations Build Trust With CustomersAI-generated

Context

  1. Only 39% of people believe tech companies put customer welfare ahead of profits (2019 Edelman Brand Trust Survey)

  2. 40–60% of users who sign up for a product use it once and never return, according to Intercom

  3. Snappa removed its email activation step in under a week and saw an immediate 20% MRR boost

  4. 27% of Snappa signups never activated their email and never saw the product

  5. Three value gaps drive SaaS distrust: ability debt, misunderstanding why customers buy, and overpromising

Only 39% of people believe tech companies put customer welfare ahead of profits, according to the 2019 Edelman Brand Trust Survey. That single statistic explains why product-led organizations are scrambling to close what practitioners call the value gap — the distance between what your marketing promises and what your product actually delivers.

Get the gap wrong and the cost is measurable. According to Intercom, 40–60% of users who sign up for a product use it once and never return. The bigger the gap, the leakier your funnel.

What is a value gap, exactly?

A value gap is a discrepancy between the perceived value of a product (what marketing and sales promise) and the actual value a user experiences. When the two align, customers get what they signed up for. Most companies don't get there — they overpromise and under-deliver.

That's the bet behind product-led growth (PLG), a strategy that relies on your product as the main vehicle to acquire, activate, and retain customers. People want to try before they buy. Keep your word and trust compounds; fail, and users hit a nasty surprise on day one.

The source identifies three root causes of value gaps: serious ability debt, not understanding why customers buy, and overpromising what the solution can do.

Gap 1: Ability debt

Ability debt is the price you pay every time a user fails to accomplish a key outcome in your product. Richard Kipp, Chief Product Officer at Grow, uses a spaghetti analogy: imagine a restaurant where customers arrive expecting a hot plate of spaghetti for $5, only to be ushered into the kitchen and told to bring their own pasta, ground beef, sauce, olive oil, onions, and garlic — and learn to use the tools. That's where churn happens.

The fix is ruthless friction reduction. Christopher Gimmer, CEO of Snappa, initially required every new signup to activate their email address before logging in. Standard practice, he thought — until he discovered 27% of signups never activated and never saw the product. His team removed the step in under a week and saw an immediate 20% boost in MRR.

Kipp's advice: "You need to evolve your technology to a point where people can get hot and ready spaghetti without having to learn how to use the kitchen. As you remove pain and friction from your user's experience of attaining their valued objective, your total addressable market grows."

One caveat: ability debt never fully goes away, and it's worst right after you launch a free trial or freemium model. To spot it, audit your product experience with four questions:

  • Does the first product experience lead to a relevant, meaningful "quick win"?
  • Do social and directional cues indicate high-value behaviors?
  • Are key task completions marked with a success state, like Mailchimp's famous high-five?
  • Are unnecessary friction points and distractions removed from critical workflows?

The takeaway: friction is a trust tax, and you pay it in churn.

Gap 2: You don't know why people buy

If you don't know where a user wants to go, you can't help them get there — you'll lead them to mountaintops they never wanted to climb. Suppose the PayPal team wants 100,000 leads this month. If you understand that outcome, your product and channels serve it. If you don't, you might pitch them a branding campaign that serves yours.

Onboarding is the other failure mode. Most businesses walk new users through the entire product without bringing them closer to a meaningful outcome — like inviting friends to dinner, giving a full house tour, and forgetting to serve food. Many companies genuinely don't know the main outcome users want, so they force unnecessary steps and show off features nobody asked for.

The fix: set the right expectations from the start, anchored to the user's primary outcome.

Gap 3: You communicate your value badly

If someone signs up thinking your product is live chat when it's actually telemarketing software, you've lost them. Even when you're clear on what the product does, you can misinform on timing — companies routinely promote how fast their solution delivers results when reality takes far longer. That confusion drives abandonment during the first product experience, and there's no shortcut around it: delivering on your value starts and ends with helping people.

How do you find your value gap?

Gaps are hard to see directly, but the symptoms aren't: underperforming campaigns, low conversion rates, high churn, and stagnant growth. Work backward from the symptom to the gap. Closing it, the source argues, can be the single most profitable lever you pull — enabling a free trial or freemium model that actually converts, lowers CAC (customer acquisition cost), and turns non-paying users into customers.

As free trials and freemium become table stakes across SaaS, the companies that survive the trust deficit will be the ones whose products deliver the spaghetti hot — no kitchen tour required.

via forbes.com (Original)

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Daniel Okafor

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Staff writer covering technology and product news in product management at Roadmap File.

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