Why The Most Trusted Brands Will Also Be The Most Successful
As published by Which50 Media, May 2019.
Who do you trust? More importantly, do your customers trust you?
This year’s global Edelman Trust Index revealed a critical development in consumer sentiment around the world. According to the authors, “Trust has changed profoundly in the past year — people have shifted their trust to the relationships within their control.”
Indeed, the study revealed an urgent desire for change. “All [customers] share an urgent desire for change. Only one in five feels that the system is working for them, with nearly half of the mass population believing that the system is failing them.”
Edelman has revealed a trend which was been building for years now, as relationships — between brands and their customers, between companies and their employees, and between people and their social networks — have become highly digitalised.
All around us, institutional trust is in freefall — across every category, industry and geography. Yet the research from Edelman also demonstrates that people are desperately looking for organisations that they can trust.
The question you need to ask yourself and your leadership peers honestly is “Can your brand be one such safe harbour?”
The answer may be much closer than you realise. Start by asking the people who work for you. One of the most interesting results this year is that employees are ready and willing to trust their employers, and they look to their employers to be a trustworthy source of information about contentious societal issues.
Trust in your company and its brands is not mere corporate hygiene. It is the guardrail on the path to profitability. That is because the economics of trusted brands are compelling.
For instance, companies have long understood that retained customers can drive strong profitability. Research by Rosetta Consulting revealed that the customers of trusted brands make 90 per cent more frequent purchases, and spend an average 60 per cent more on each transaction.
It is important to understand, in an experience-based economy, that trust operates at multiple levels and brands need to execute successfully on each.
The first level is foundational — where consumers expect businesses to be able to collect, manage, and protect their data at both a technical level and at a policy level. This reflects both the organisation’s ability to secure data and its philosophical approach to which data it collects and how it treats the privacy of that data.
The other key to successful delivery at this level is to provide customers with the control they need in order to feel like they are an equal partner in the relationship.
The second layer is experiential. Consumers provide brands with information about themselves, either explicitly or implicitly, through their interactions with the brand. The value exchange they expect is that companies will provide them with seamless and easy-to-use products and services that most accurately match their requirements and desires. This value exchange extends beyond simply data, although this is critical.
Just as important for this layer is the provision of contemporary and coherent interactions between channels such as sales, service, online, and mobile, for example.
And brands have to accept that this is a process, not a final state. The benchmark for successful experiences keeps changing as consumers and customers encounter new great experiences in all aspects of their lives. Matching traditional competitors is not enough anymore — you need to match the customer experience leaders in every market.
The final layer is reputational trust. Consumers should not have to tell brands how to treat them. They will be drawn to brands that act in their best interest as a matter of course.
As a simple example, when a customer is due a refund, they should not have to search or work for it — the brand should know this already due to the sophistication of its systems, and deliver the outcome. In this sense, delighting the consumer is now the expectation.
The need to excel on each of these levels explains why the most successful organisations take a longitudinal view of their market potential. Often through the use of models like the lifetime customer value’ (LTCV) which moves brands away from a transactional view of value – or “short termism” – to a more holistic, all-of-relationship measurement.
It recognises that more than ever, customers will generate the greatest amount of value for a brand, when they perceive true value in return. Not surprisingly then, as consistent with the nature of all human relationships, brands that are driving outstanding LTCV are those that occupy a place of trust.
In the experience economy – the good guy really does win.
In the digital world, where increasingly the experience is the product, customers will give brands more value — and more money — when they get more value from the brand in return. But customers will give the most value to brands that they trust to do the right thing by them.
So ask yourself: do your customers trust your brand? And what would it mean for your company to be most trusted in its category?