No place for counterfeits: why brands can't buy trust

30 March 2009

Sociologists define the degree to which one person trusts another as a belief in the honesty, benevolence and competence of the other person, so clearly it is desirable for a brand to gain such trust from their consumers. But are they anywhere close to this ideal?

In the midst of the toughest economic climate for many years, consumer trust is becoming more important than ever for brand success. With price considerations driving consumers, faith in banking systems evaporating and redundancy topping the news agendas, confidence is at an all-time low.

Richard Brown, managing partner at strategic consultancy Cognosis, says: “Recession is about confidence. As a recession arrives it triggers an emotional and behavioural chain reaction. And this one will be especially psycho-toxic. You can’t get away from it and the language is increasingly catastrophic.”

In this case, confidence began to disappear when financial stalwarts, starting with Bear Stearns and Lehman Brothers, collapsed. As we all know, the house of (credit) cards soon followed suit and came tumbling down and we are now left dealing with the biggest global economic crisis in decades.

When confidence dissipates, people stop believing that their jobs are safe so they stop spending. Then people stop believing their money is safe so they bring their investments to a halt. The uncertainty about inflation, property and interest rates results in economic stagnation and consumer fear, which then engenders a complete breakdown in trust.

Financial services have been hardest hit with a Cohn & Wolfe survey showing that only 41% of consumers feel that their bank is looking out for their best interests. When asked which words best describe financial institutions, 49% of respondents said greedy, 31% said opportunistic, with only 5% labelling them honest or transparent and a mere 4% saying they were trustworthy.

If banking institutions can be sunk, so too can other sectors and at this stage large purchases such as holidays or cars and luxury goods are all being affected.

The Partners chief executive Jim Prior argues: “I’m not sure people have ever trusted brands. It is more about who do I mistrust the least.”

A Reader’s Digest survey (Trusted Brands) reveals that an average 42% of Europeans claim to have lost trust in business leaders and international companies compared to five years ago. The decline is highest in Germany, UK, France, Switzerland and Austria. Trust in banks has fallen by an average of 39% across Europe, with the decline in trust greatest in countries where finance represents a significant sector of industry.

Furthermore, some 52% of people in the 16 countries surveyed said that they trust advertising less compared to five years ago, with only 3% saying that they trusted it more. This is amplified by a reduction in trust of the media, with 32% trusting newspapers less, 30% trusting both TV and magazines less, and 22% trusting the internet less compared with five years ago.

Peter Walshe, global account director, Millward Brown, says that trust from a consumer point of view is about delivering an experience that lives up to the brand promise, ideally something distinctive, and one that stays true to consumer expectations.

According to Millward Brown’s brand equity study BrandZ, brands classified as trustworthy tend to score highly in terms of being in control, wise, caring, straightforward, friendly, desirable, assertive, kind, generous and innocent.

Trusted brands are not generally viewed as rebellious, playful, fun, adventurous, sexy, different, idealistic, creative or brave. That is not to say that they are not undifferentiated or indistinctive, but rather they often set the standard that others follow. That might explain why brands such as Nivea, Nokia, Visa and Canon regularly top their categories in the Reader’s Digest Trusted Brands survey.

Yet trust is not created by advertising claims. Rather it is the delivery of consistent and positive brand experiences, which take time and effort to deliver. The memories of these experiences combine to create an expectation that next time the product will be equally good. This applies to any product, be it a hotel or a soft drink. That confidence is crucial if brands want consumers to choose their product over an alternative. Walshe adds: “It’s about saying and being. It’s not about cheap, but about value. And communication can really help by connecting the brand promise.”

Clearly, customer services are central to the message and the Cohn & Wolfe survey shows that financial services brands put greater transparency and better customer services as the top rated actions that can improve trust.

The recession has brought PR to the fore. Brands can build up trust over years but lose it in a matter of days if they fail to manage their reputation effectively in the face of bad news, especially in a digitally-connected world. Gavin Murray, regional advertising director Europe, Reader’s Digest, says: “In the present economic climate, loss of trust is not only a sign of weakness, it could be fatal.”

Richard Hemming, head of marketing and insight, Ebiquity, says: “Our appetite for bad news is artificially high at present. Company news has moved from the business pages to the front page, so the effect of negative PR is therefore amplified. In some cases the negative PR is drowning out positive advertising messages that would ordinarily be building brand equity and trust as well as driving short-term sales.”

Brown agrees: “PR is potentially the more authentic voice of a company reacting to the situation as it unfolds. However, practitioners have to pay attention to a selection of languages to avoid spinning.”

This means that advertisers need to cleverly coordinate their marketing and public affairs efforts. Businesses need to monitor the relative positivity or negativity of their media coverage and then manage the weight or timing of their advertising expenditure to reinforce, counteract or avoid conflicting with coverage.

A prime example is the furore over Facebook’s recent changes to its terms and conditions which led to widespread panic that the social network would be syndicating its users’ photos. Facebook’s founder Mark Zuckerberg reacted quickly to reassure users via a blog and through the media, eventually changing the terms and conditions to their original format and inviting users to help shape better ones. Similarly, Virgin Airlines reacted quickly after a passenger complained about the quality of plane food with Richard Branson personally calling the passenger to make an apology.

In a world of social media and consumer empowerment, online is a key place to help build and maintain trust. The Partners’ Prior says: “You need a deep understanding of the internet – branded utilities, branded content, and facilitating and engaging dialogue.”

A trusted referral or word of mouth has always been important, but in a day when you can log on to review sites or straw poll your 500 Facebook friends, it is even more powerful. Brands need to engage with consumers in so many more different places, creating opportunities for them to interact with the brand in a managed way.

Nick Burcher, head of social media and audience messages EMEA, VivaKi Nerve Center, says: “For many people your brand is what Google says it is, so Google reputation management is a way of promoting positive stories and pushing down negative ones in the rankings.”

Corporate blogging is another way of encouraging trust. Putting a face to a faceless brand can help. Burcher explains: “Consumers are more likely to buy into a person at the top of the company.”

Brands should be monitoring what is said about them on blogs and on social networking sites, engaging with negative feedback and encouraging brand champions or advocates. This can range from listening in to what people are saying on Twitter, engaging with key bloggers, and having strong CRM platforms that address consumer needs and concerns.

There is no quick-fix solution, but we are likely to see brands focus on genuine, simple advertising, with PR at its core. At the same time they will move away from big promises and an emotionally-led lifestyle sell that were differentiators in boom times.

Olivia Solon, London