Trust: Our Only Currency
Why McDonald’s and Coke are such widely adored and identified brands? Surely, there are healthier options for grabbing a meal and quenching your thirst. And even so, if one is wandering alone in a foreign land where you don’t speak the language and aren’t adventurous enough to sample the local street vendors’ fare — chances are most of us would seek out the closest Maccas or reach out for a Coca Cola. The simple reason being that the product is familiar and consistent. In other words, one implicitly TRUSTS these brands. For consumer-facing businesses — Trust is the only currency, and the best companies treasure this earnestly.
iD Fresh Food is one of India’s fastest growing packaged food brands. It is also a classic case study on using ‘Trust’ as a moat and competitive differentiator. They trust their product, their execution, and most importantly, they trust their customer wholeheartedly. Every morning, for the past few months, iD’s fleet of mobile stores/van (called the Trust Shops) travels to 42 touch-points and across 500 residential societies and sells over 65,000kgs of rice batter, but sell it with a difference.
There is no salesperson collecting money; no security guard manning the van; no vending machine installed to deposit money. And nobody is keeping a tab of how many packs each resident is picking up. Those who pick up the products are informed to pay via e-wallets. There are no follow-up Whatsapp calls or calls for payment and no one knows which customer has picked up how much. And yet the repayment rates are at 97%. This model clocks in ~70K USD/day. All thanks to their secret sauce — Trust.
Trust is the lubricant that keeps the wheels of our most successful businesses in perpetual motion. It is the underlying thesis on why gold purchases are moving from unorganized stores to organized players like Titan. It is also the reason why Jubi’s Pizza deliveries have not lost momentum even during the recent ‘unlock weeks’ — consumers trust in the safety and quality of the product. Trust is also the reason why certain banks can build better liability / CASA franchises than others. This is even more relevant today, with Lakshmi Vilas Bank joining other recent entrants on RBI’s operational moratorium list: the PMC Bank and Yes Bank.
This past week was a momentous one. Four humans trusted a bunch of scientists and engineers to put them in a metal tube and fire them off into space — and reach the international space station, in one piece. This is the first time a private company has dared and delivered on putting humans into space.
Also, lay people put their trust in BIG PHARMA to let them be injected with Covid vaccine candidates for the benefit of all humanity. It is on their brave shoulders, science stands today with two potential vaccine candidates showing significant promise. We all are in their debt.
Speaking of vaccines, Moderna’s CEO made an interesting comment. He said that vaccines are ‘not silver bullets’ and basic tenets of hygiene and responsible socializing must be followed.
So tomorrow, when you have gotten your vaccine shots, you run into this author in a downtown Singapore watering hole, India Etc. will TRUST YOU… to continue wearing your masks!