In this post, we’ll explore brand trust, examining several companies who have lost and regained it. Brand trust can be a nebulous concept, and it’s easy to brush it off as something that doesn’t require active effort to build. But as the companies in the next section found out, brand trust is a resource that can have a direct impact on profits.
In the first section of this post, we’ll introduce these firms and learn what they did to get into hot water. Then we’ll extrapolate from their experiences, distilling their trust rebuilding strategies into four tips. You can start using these four tips today to bolster your own brand trust.
What is Brand Trust?
When it comes to the relationship between customer and company, what is trust, anyway? If it’s something that can be earned, can it also be quantified? If it’s something that can be lost, where does it go when you lose it? What do you actually lose when consumers stop trusting you?
It can be difficult for some companies to commit resources to building brand trust because trust can seem so arbitrary at times. But we’d like to propose a simple model that might allow us to quantify trust a bit better, since this whole notion of brand trust is somewhat ephemeral:
When your customers lose faith in your brand, you lose real estate in their mental space.
After all, consumers only have so much mental bandwidth. When it comes right down to it, they’re only going to spend so much time deciding between you and your closest competitor. Think of it this way: when you lose their trust, your competitor takes up residence. You’re out, and they’re in.
Put in these stark terms, it becomes clear why building—and maintaining—brand trust is essential. Today’s marketplace, with its tech-savvy and advertising-adverse populous, is more competitive than ever. You must stand out if you intend to win market share.
The paper, The Recovery of Trust: Case Studies of Organizational Failures and Trust Repair, by Graham Dietz and Nicole Gillespie, has a lot to say about brand trust. In fact, we’ll be referencing this paper throughout this post.
According to the authors, consumers judge a company’s trustworthiness using three criteria:
We could look at these as absolute virtues, but no company exists in a vacuum, so it might be more helpful to take a more relativistic approach. Let’s expand these into:
- Relative competence. If you make leather wallets, how good are your wallets compared to those of your competitors, and how consistent is your quality level compared to them? If you run a SaaS, how often is your service down compared to others in your space?
- Relative Benevolence. Do your competitors donate a fraction of their profits to charity? Do you? If they do and you don’t, they may be viewed as the more benevolent entity.
- Relative Integrity. Do you keep your word often compared to your competitors? Do you stick to your mission statement or vision statement? Do you storydo, or do you story tell?
By looking at it this way from the start, we gain a more complete picture. To excel in your space, your brand will need to achieve high marks in all three of these areas compared to your competition.
According to the paper above, these three elements, competence, benevolence and integrity, combine in the mind of the customer to form an overall impression of trustworthiness. If you pass this check, and the overall impression is positive, the customer will be more willing to open themselves up to risk. However, if just one of these elements is negative, then it’s quite likely the potential customer will go to your competition instead.
Brand Trust Case Studies
In the paper, the authors looked at several case studies of companies that lost consumer trust, and how they took steps to repair the damage. We won’t be looking at all of these companies in depth in this post, as the authors have already done that. But we will extract some of the key lessons.
Here are the companies featured in the study:
- Siemens. Siemens, headquartered in Germany, is one of the largest manufacturing companies in Europe. The brand was hit with a massive bribery scandal in 2007. The firm overhauled its internal processes and reevaluated its leadership.
- Mattel. Mattel, headquartered in the U.S., is one of the largest toy manufacturers in the world. The brand lost prestige after it was hit by numerous recalls starting in 2007. They have garnered praise for their high transparency.
- Toyota. Toyota Motor Corporation, headquartered in Japan, is one of the largest companies in the world. The firm suffered recalls in 2009, and its initial response was dubious. Despite this, the company managed to right the ship with stringent, and public, reforms.
- The BBC. The British Broadcasting Corporation. In 2007 the BBC came under scrutiny when it was revealed that phone-in contests may have been staged. Their response involved an intense internal investigation and innovative reforms.
- BAE Systems. BEA Systems is a defense, security and aerospace firm headquartered in the United Kingdom. The company was hit with scandal after scandal concerning the nature of their arms deals. The firm hired an outside consultant—former judge Lord Woolf—to appraise their operation and make recommendations. The result was a highly public cultural overhaul.
- Savern Trent. Savern Trent is a utility headquartered in the UK. The utility was found guilty of obfuscating performance data and was fined £38-million. Within two years, the firm was voted ‘Utility of the Year.’
Below, we’ll look at one of these cases in greater detail.
A Closer Look at Siemens
In 2006, Siemens was accused of widespread corruption. It was revealed that hundreds of employees may have been diverting funds to ‘phony consultants’ and shell companies. A judge on the case described the situation as ‘systemic bribery.’
The scandal cost the company credibility with its shareholders and investors, caused its employees to come under threat from the public and eroded customer trust.
Like all the companies on this list, Siemens lost credibility on all three fronts: integrity, benevolence and competence.
The scandal erupted when it was revealed that German authorities had stormed Siemens headquarters. The firm’s initial response was to admit that while there may have been a problem, it was limited in scope. In fact, they insisted that it was ‘only a matter of a few million euros.’ By the end of the month, however, Siemens was forced to admit that over 400-million euros were unaccounted for. In addition, the CEO, Klaus Kleinfeld repeatedly denied any involvement or knowledge.
The paper characterizes the firm’s initial response as ‘defensive.’ Unfortunately, it’s also typical.
The first concrete step Siemens took to halt the erosion of their public image was to enact a program designed to prevent unethical and illegal conduct by its leaders. At the same time, they announced an internal investigation to determine who within the organization was aware of the problematic behavior.
It then made the results of this investigation highly public, demonstrating a willingness to be transparent.
Next, the company hired Michael Hershman, co-founder of Transparency International, to serve as an adviser. This step was also disclosed to the public. Under Hershman’s guidance, the company set up new, strict regulations designed to prevent, detect and respond to corruption.
Overall, the scandal cost the firm over 2.5-billion, 2-billion of which was fines.
The firm has since recovered, and it credits this rehabilitation to extensive changes to its company culture. Current company officials emphasize that eliminating internal corruption is a marathon, not a sprint, and that the work is never completely done. Note that this is a sentiment that’s likely to resonate well with the public.
In each of the case studies reviewed, we find a common thread. If you lose brand trust, you can repair the damage, at least to an extent. Let’s examine the process of trust repair as outlined in the paper.
A company can demonstrate competence through the efficiency of its operations and the quality of its product.
It can display benevolence in many ways, such as taking actions that benefit the environment or that make the consumer’s life easier. Recall in our last post how Coca-Cola sought to increase brand loyalty with their online magazine. By providing a place where consumers could come together and share their experience with the brand, they were also demonstrating benevolence.
Finally, a firm can demonstrate integrity through consistently positive and mutually beneficial dealings with suppliers, stakeholders and consumers.
When a brand trust crisis emerges, a company must take decisive action to address all three of these elements.
Typically, decisive action takes the form of interventions designed to:
- Solve the immediate problem
- Assess the damage
- Make concrete changes and disclose those changes to the public
Interventions can take the form of:
- New compliance procedures
- An assessment and overhaul of cultural norms within the company
- Revised incentives
- The removal of guilty parties, regardless of rank, position or privilege
Note that these are the minimum actions the public expects, and they may not be enough to restore consumer faith. Therefore, we must keep in mind the importance of demonstration. Demonstration takes the form of any statements or documents that provide concrete, compelling evidence that changes are being made to address the problem. These statements further demonstrate the company’s re-dedication to benevolence, integrity and ability.
These demonstrations can take the form of:
- Public apologies
- Paying penance, such as a dedication to public service or acknowledgment of fines
- Substantial investments in charity or non-profit organizations
- Public re-dedication to transparency efforts
Note that—while we hope you never need to do so—restoring brand trust is not something you can do overnight. There is a well-established time frame within which events unfold. It looks something like this:
- Your immediate response. This is the first 24 to 72 hours. This is where you admit fault with a minimum of defensiveness. Note that millennials are particularly adept at detecting PR speak.
- Appraisal of the situation. A complete internal diagnostic to find out exactly what happened and how you can prevent it going forward—the quicker the better. Your press will be negative during this period. The sooner you have something to show, the better off you’ll be.
- Your interventions. A targeted series of interventions as described above. This portion of the process may last months.
- Evaluations. This is an ongoing process in which you share with the public how the changes you’ve made to your organization have improved the situation.
For a detailed breakdown of how each company in the above list went through this process, see the link to the paper above.
4 Sure Fire Ways to Build Brand Trust
The companies featured in that paper engaged the services of pricey consultants to come up with complex trust restoration strategies. But we can break these strategies down into their basic components. You can use these tips to build brand trust or rebuild lost trust. Apply them consistently, and you’ll find that customers prefer your offering over those of your competitors.
#1 Be Authentic
Building trust starts with authenticity. If customers don’t know who you really are, and what you stand for, they can’t trust you. Millennials, in particular, are not interested in your sales pitch. They don’t care about why you think your product is the best. They don’t care about the main ‘benefits’ of your product, either, nor do they need your advertisements to tell them what they want to buy.
If they want to find a widget, they know how to find that widget.
What they do want is to know who you are. They want to know who your brand is, and what it stands for. Assuming an authentic posture comes down to evaluating:
- Your values
- Your goals
- Your culture
Note that values and goals are tightly correlated here. In both instances, you should be thinking of what your company cares about outside of profit. In other words, what are your goals unrelated to profit? What are your values when money is not a factor? What do you stand for?
Don’t worry, no one expects you, as a for-profit, to become a charity. But today more than ever, consumers expect companies to show they care about something.
For an example of a company that has completely nailed this, take a look at Always, with their #LikeAGirl campaign. See the paper, Always #LikeAGirl: Turning an Insult into a Confidence Movement for more on that.
Another way to be authentic is to tell stories that show the more human side of your operation. YouTube and Instagram are great platforms for this. Of the two, YouTube is the more resource intensive, as the focus is on video. So it may be better to ease into the process by sharing photos of your employees at work and play on Instagram.
Marriot’s #AtTheMoxy campaign is a stellar example of brand storytelling. Moxy is a division of the company that caters to upwardly mobile millennial patrons. The company’s video series, Do Not Disturb, strikes the perfect balance between entertainment, humanity and marketing, and it’s a big hit.
You can always look to Nike to provide an example of how to be authentic. Much of their marketing focuses on stories, such as their spot featuring Rory McIlroy idealizing Tiger Woods as a child. The company’s trademark swoosh doesn’t appear until the end of the commercial. The firm doesn’t have to shove their products in our collective faces because they understand their place in our culture, a position that’s rooted in authenticity.
There are two additional aspects of authenticity that are critically important, and they go hand in hand: transparency and social proof.
58 percent of consumers don’t trust a brand until they see rock solid evidence that the company keeps its promises.
Meanwhile, according to Nielson, 83 percent of consumers trust recommendations made by friends and family members.
You can build social proof through content marketing, strategic partnerships, publishing case studies and through guest posting on established blogs in your space.
You can increase transparency by publishing third-party research centered on your product or service, demystifying your ingredient list—did you know there are over 60 words for ‘sugar?’—or by being active on social media.
Additionally, be open about being open. If you’re okay with sharing more information than your competitors do, don’t make that a secret. Patagonia, an outdoor clothing company, does this wonderfully. They maintain a blog called The Footprint Chronicles that helps them stick to their public goal of being more sustainable and accountable.
Finally, when you make a mistake, own up to it. Nothing erodes trust quite like getting defensive when you’re called out.
Before you take steps to increase transparency, though, you should use a tool like Google Alerts or Mention to gauge how transparent your customers think you are. Only then can you estimate how much work you’ll need to do. Look for concerns or questions about your products that come up repeatedly.
Trust Building Tip
Invite customers to talk to each other about their experience with your brand. Use social media platforms like Facebook, Twitter and Instagram to make this happen. Create a hashtag around your brand name and use it consistently so that fans will do the same.
#2 Define Your Unique Brand Trust Goals
Every company is different, and your situation is unique. What’s more, your competitors may be better established, and they may enjoy greater consumer trust. While you could sit back and hope they become complacent, a better approach is to define a set of brand trust goals. How do you want brand trust to manifest for you? You could seek:
- Frequent, consistent praise on social media and numerous @ mentions
- A steady influx of positive reviews
- A high number of referrals from existing clients
- Loyal customers who come back again and again
- Free advertising from passionate brand ambassadors
- Ever-increasing orders coming in from affiliates
Thinking about brand trust in terms of what you want to get out of it will help you define a positioning strategy. As long as brand trust remains a nebulous concept of dubious value, you’re unlikely to proactively seek it out.
Once you’ve decided exactly what it is you want, there are several tools you can use to track your progress. As mentioned, with Google Alerts, you can set up simple alerts for your brand name and related terms. This way, you can more easily keep tabs on what people are saying about you. Mention is more robust, but it’s not free.
Platforms like Reputology and Podium can help you keep track of reviews from sites like Google My Business, Yelp and Trustpilot all from one interface. Of course, if you have the funds, you can hire a firm to keep tabs on all of this for you, or you can pay a qualified employee to do it.
You can use Buffer or Hootsuite to keep track of @ mention replies and to schedule tweets and posts.
The bottom line is that once you define your brand trust goals, you’ll need tools to help ensure you meet those goals.
Know Your NPS Score
To further track your progress, you can conduct online surveys to gauge customer satisfaction. Note that often, you’ll have to give customers some kind of incentive to generate participation. Typically, entry into a contest of some sort is enough to generate responses. A service like Survey Monkey or Google Forms makes creating surveys easy.
Of interest to us here is a tried-and-true metric, the Net Promoter Score. You can use NPS as a broad indicator of your overall brand trust health. To calculate NPS, you’ll need to add some variation of this question to your surveys:
On a scale of 1-10, how likely are you to recommend [brand] to a friend or colleague?
This question will break respondents down into three categories:
- Promoters. These are your most passionate, loyal customers. They indicated 9- 10 in their response.
- Passives. These folks are rather indifferent. These are the people who indicated 7-8.
- Detractors. These people don’t like you. They indicated 0-6.
To determine your NPS score, you’ll need to determine the percentage of each. Then simply subtract detractors from promoters. So, for instance, if 50 percent of respondents were promoters and only 10 percent were detractors, your NPS is 40. NPS range is -100 to 100, so a score above 0 is considered ‘good.’
Knowing your NPS score gives you a good idea of how you’re doing in terms of customer experience, and providing stellar customer experience is one way to build brand trust.
#3 Optimize Customer Experience
Rather predictably, then, the next item on this list is customer experience optimization. To build brand trust, you must consistently demonstrate competence, or ability. The thing is, customer service in and of itself is transactional. You’re either answering a question or solving a problem. This is all well and good, but it’s difficult to build widespread brand trust this way.
One way to optimize customer experience is to look at the customer’s journey at each touch point. The goal is to provide a customized, personalized experience that demonstrates to the customer that you understand them and their needs.
You’ve probably seen the many polls demonstrating that consumers consider customer experience more important than ever. But an even better takeaway from these polls is that consumers feel that most companies do not deliver.
Trust Building Tip
Hold ongoing reviews of your customer journey, documenting the touch points along the way. Are there any points where you can offer more personalization or where you can demonstrate that you understand the customer and their needs?
For instance, if you have a social media presence—you do, don’t you?—do your @ mentions often go unanswered? Making sure you respond to a good chunk of these will help your customers feel heard. Delegate this to a trusted employee if you need to.
Do you use geolocation data to create targeted marketing offers?
Do you gather customer feedback across a wide variety of channels, or do you rely on only a few?
Do you use big data solutions to determine a customer’s preferred contact channels, or do you rely on the same old email marketing techniques?
#4 Consider Delegating
You may want to delegate part or all of this to your team. By appointing a brand trust leader, you put brand trust in the hands of an employee or partner who can give the endeavor the time and attention it deserves.
You have a million and one things to tackle.
Your brand trust leader should be responsible for ensuring that your brand vision and goals are adhered to.
Don’t worry, you can put a limit on just how much leeway this person has, requiring them to pass any major actions by you first. But by putting the grunt work in the hands of someone else, you’re free to take a broad view of the overall operation. This person can also be responsible for using tools like Google Alerts, Mention, Hootsuite, etc., to monitor your online reputation. They can also coordinate with consultants on how best to evaluate and improve perceived trust and build social proof.
Brand trust is a major component of success in the modern marketplace, and that’s unlikely to change going forward. The existence of the Internet and the emergence of social media means that customers can scrutinize your actions with a microscope, and they can—and do—discuss you in real time on sites like Reddit.
You should think of brand trust as an asset—something that can be gained or lost.
Remember that, ultimately, your brand trust depends in part on what you say to customers, how you say these things, and how often. Don’t forget the lessons from Siemens, Mattel, Toyota, the BBC, BAE Systems and Savern Trent. How you respond to any brand trust crisis will determine how long it takes you to reestablish trust.