Tuesday, November 29, 2011

How to Solve The Trust Deficit

On the first of November, by a vote of 396-9, the House of Representatives reaffirmed our nation's motto: “In God We Trust.”  At the same time, Congress' super committee failed to come up with an answer to the nation's growing budget deficit. These two votes speak volumes about one of the biggest problems facing America today: no, not the growing budget deficit, but the ever widening trust deficit.

After thinking about the trust deficit, I decided to revisit an earlier post, "Trust in a Time of Distrust," to think about how the trust deficit is affecting brands and how we can help bridge that gap.  Following are my thoughts on this growing problem.


“You must trust and believe in people or life
becomes impossible.”
Anton Chekhov

“(T)rust is the number one driver of any
brand at the most fundamental level. We
buy what we trust and keep buying;
familiarity and trust are big, big drivers of
loyalty and brand value."
Andy Bateman
CEO of Interbrand

“You can have all the facts and figures, all
the supporting evidence, all the
endorsement that you want, but if at the
end of the day you don’t command trust,
you won’t get anywhere.”
Niall Fitzgerald (2001)
Former Chairman and CEO of Unilever
Deputy Chairman of Thomson Reuters

Disappearing Trust
Institutions we once looked to for support, have continually let us down, leaving a trust gap that brands have an opportunity to fill.


Distrust of corporations remains high among American consumers three-plus years after the nation’s financial crisis, with a majority (64%) saying it’s harder for US companies to gain their trust today than it was a few years ago.  Further, consumers expect this lack of confidence will continue, with more than half (55%) saying it will be harder for corporations to gain their trust in the future.  (GfK Custom Research North America 2011 Corporate Trust Survey)

The economic crisis has completely eroded our trust in Wall Street while a decade of corporate scandals has battered our trust in business. (The data for Europe shows similar trends; see "Trust & Purpose Survey," Burson-Marsteller, 2011.)

Confidence in Congress hit a new low in September, with only 31% of Americans saying they have a great deal or fair amount of confidence in the legislative branch.

The data on media is particularly troubling: in an ever-changing world, Americans are not looking to traditional media as a trusted source of information. In fact, a 2011 survey by The Pew Research Center for the People & the Press found that only “25% of Americans say that news organizations generally get the facts straight, while 66% say that news stories are often inaccurate.” That’s the lowest level that Pew has seen in two decades of surveys.


Who are we turning to? In an infamous survey after the passing of legendary newscaster Walter Cronkite, TIME magazine conducted a poll asking who's the most trusted newscaster in America with the Daily Show's Jon Stewart taking first place with 44% of the vote.

How about other key institutions in American society? Again, the news isn’t good. Across a 20-year period, confidence in organized religion, the US Supreme Court, public schools, Congress and organized labor is down drastically.

When Harris Interactive asked which of a list of 17 industries are generally honest and trustworthy, almost half (48%) of all adults say "none of these" which is the highest number giving this negative response since they first asked this question in 2003. In fact, across the board, trust in every
industry fell from 2003 to 2010.
The results of the Interaction Associates 2011 Building Trust in Business Survey show that: "Employee trust in leaders is lagging and has not rebounded over the past year. Even as employees express trust in peers by saying they share and collaborate more easily with colleagues, employees remain wary and distrustful of their leaders." Similarly, a 2011 poll by Maritz Research found that "only 10 percent of employees trust management to make the right decision in times of uncertainty." Ouch.

Dennis Reina and Michelle Reina, co-authors of "Rebuilding Trust in the Workplace" (2010), and "Trust and Betrayal in the Workplace" (1999) contend "Major betrayals in the workplace -- from corporations grossly mismanaging worker layoffs to CEOs committing crimes and misdemeanors can make headlines -- [but other betrayals such as] finger-pointing or taking credit for others' work, erode trust over time." What's more, they argue, according to their research, 90% of employees report that they feel the effects of eroded trust daily.

So, Americans don't trust anyone in positions of power (people or institutions), what about everyone else? Well, according to Pew, we are not very trusting of others: in 2011, 54% said, "you can't be too careful in dealing with people"; only 41% said, "most people can be trusted."
Yet study after study indicates that “trust” drives business:
  • According to Millward Brown, highly trusted and recommended brands are seven times more likely to be bought ("Beyond Trust: Engaging Consumers in the Post-Recession World," 2010).
  • A 2009 study by Concerto Marketing found that when people trust a brand, 83% will recommend it to other people; 78% will give its new products and services a chance; and 50% will pay more for its products and services.
  • A 2011 study from Pitney Bowes Business Insight, “The Role of Trust in Consumer Relationships,” found that trust can drive up to 44% of customer loyalty in a brand.
  • Trust drives purchase according to the 2009 Edelman Trust Barometer: 91% of 25-to-64-year-olds around the world indicated they bought a product or service from a company they trusted, and 77% refused to buy a product or service from a distrusted company.
Thus, the big question is, “What drives trust?”

According to Jusin Basini, author of Why Should Anyone Buy From You? (2011), the trouble with trust is that whilst we know what it is like to feel trust, the concept is many layered and complex. Trust is a response, not a stimulus. And there’s a difference between functional trust (that ATM machines won’t short-change us) and affective trust (that an organization has our best interest at heart). Basini also talks about “Bonded Trust,” the sort of deep trust created by brands that we truly identify with.
  • Functional trust – this is how well a brand delivers against its primary purpose
  • Affective trust – this is how well a brand creates a relationship
  • Bonded trust – is reserved for those brands that create a deep, loyal connection. It is bestowed not demanded.
"Bonded Trust" reminds me of Kevin Robert’s Lovemarks idea, where the brand that has high love and high respect is denoted as a "Lovemark" brand.


According to Elena Delgado-Ballester and her colleagues, trust is “a feeling of security held by the consumer in his/her interaction with the brand, that it is based on the perceptions that the brand, as a personified entity, is reliable and responsible for the interests and welfare of the consumer”. (“Development and Validation of a Brand Trust Scale,” International Journal of Market Research, 2003)

Similarly, in their book, “The Trusted Advisor” (2000), David Maister, Charles Green, and Robert Galford create a “trust equation”:



where T = Trust, C = Credibility, R = Reliability,
I = Intimacy, S = Self-orientation



Put another way, trust requires that I find your words credible, your actions reliable, that I believe you'll really listen and attend to my most intimate emotions, and that you are not a selfish, egocentric, greedy, opportunistic bastard motivated by self-interest, instead you're selfless and caring.  "Selfless marketing," according to August Turak, "means forgetting about the bottom line, our products, and personal ambitions by fanatically serving our customer's needs."

Restoring Trust
In their book “Authenticity: What Consumers Really Want” (2007), James Gilmore and Joseph Pine argue that authenticity drives the bond between consumers and brands. They write, “In a world increasingly filled with deliberately and sensationally staged experiences… consumers choose to buy or not buy based on how real they perceive an offering to be.” 

However, putting Gilmore and Pine’s hypothesis into practice has proven to be very difficult. However, recently a number of brands have figured out how to build authenticity and thus how to build brand trust.

In my mind, these brands have solved the trust deficit by focusing on 4 elements: Cultural Relevance, Simplicity, Energized Differentiation, and Transparency.



Cultural Relevance
Gareth Kay once wrote, "great brands are realizing that people don’t see categories and don’t obsess about them. What actually matters is having a point of view on the world, a cultural mission to ask people to rally around." 

According to Grant McCracken, the author of Chief Culture Officer (2009), when businesses were making hammers, being in tune with culture made little if any difference—a hammer’s a hammer, a useful thing that needs no back story. But that has changed, and we are now in a period when many non-hammer-making companies are in the business of creating “experiences” and “meanings.” This is where culture comes into play, and business needs to know more about it.

In his book, How Brands Become Icons: The Principles of Cultural Branding (2004), Douglas Holt proposes a Big Idea. Simply put, according to Holt, the brands that attain the status of icons in consumer society operate at the cultural level. And more than merely reflecting people and the times in which they live, iconic brands offer myths that help resolve the contradictions of society; they’re channels for expressing desire and relieving anxiety.

What Holt finds is that those brands that offer solutions to the crises of American society gain market share. And when those brands are out of sync, they sink regardless of how much money is spent promoting them. Iconic brands create what Holt terms “myth markets,” the opportunities for which arise when national ideology conflicts with social reality. Myth markets are based in populist worlds, the bedrock of culture. Some of the enduring myths in American culture are those of self-reliance, manifest destiny and America as the land of opportunity. Populist worlds include sports, the Wild West and the immigrant experience.

In his more recent book Cultural Strategy: Using Innovative Ideologies to Build Breakthrough Brands (2010), Holt and his partner, Douglas Cameron, analyzed more than two dozen brands that differentiated based on cultural innovation. He concludes that hot brands are the first to express a new ideology or to express an existing one in a way that shakes up the conventions of the category and prods consumers to seek out new alternatives. It’s about catching the cultural wave, specific to a historical moment and particular group of people. Far from being a haphazard or serendipitous event, cultural innovation can be strategically planned and implemented. One particularly encouraging aspect of this approach to differentiation is that it is additive – even brands with better mousetraps can take advantage of cultural innovation to establish enduring differentiation. Would Nike be as powerful as it is today if it had simply rested on better performance? Or Ben and Jerry’s on quirky flavors and its regional heritage?

One particular cultural wave is "corporate social responsibility" (CSR). Companies are realizing that their brands can enable and motivate people to change, and by doing so, create new ways of engaging people in communication that makes the world a little bit better.  According to Richard Kohn, "Increasingly, a differentiator for the most successful global brands is that they are eager to translate their commercial success into something of social or societal significance. They have realized that having a global purpose offers competitive advantage over local or smaller, faster-moving competition." In fact, the Penn Schoen Berland 2010 Corporate Social Responsibility Perceptions Survey found that 75% of consumers say that it is important for companies to be socially responsible and 72% say they will make some sacrifices in their spending or in their salary to support social responsibility.
 
Energized Differentiation
According to John Gerzema and Ed Lebar, authors of The Brand Bubble: the Looming Crisis in Brand Value and How to Avoid It (2008), “the most successful brands today resonate with consumers in a special way: They communicate excitement, dynamism, and creativity in ways that the vast majority of brands do not.” They call this quality “energized differentiation.” “Energy,” they write, “is where the action is. It reflects the consumer’s perception of motion and direction. It sustains the brand’s advantages. High-energy brands create a constant sense of interest and excitement. Consumers sense that these brands move faster, see farther, and are more experiential and more responsive to their needs.” (For more insights about "energy" see my earlier post, "Adding Energy to Brands.")

According to Gerzema and Lebar, the three keys to a high energy brand are:
  1. Vision – how the company presents leadership, convictions, and reputation. Brands with vision embody a clear direction and point of view on the world. They convey what they’re on this planet to achieve. Some brands promise to change the way people think; others seek to shift expectations about the way things are done. Vision-driven brands see farther; they galvanize and inspire consumers to join in, allowing the brand to travel into new categories and create new meaning.
  2. Invention – how consumers perceive innovation in the design or content of the product or service. Brands that score high in invention change how people feel and the way they behave. As the most functional element of energy, invention is built on the tactile and sensory associations that come from product and service experiences and other physical brand interactions. Invention can be built through innovation, brand iconography, packaging design, applied technology, retail environments, and customer service. A brand’s invention can never be static. It requires a commitment to continuous innovation, service excellence, and new forms of brand experience.
  3. Dynamism – how the brand creates a persona, emotion, advocacy, and evangelism. Brands with dynamism create excitement in the marketplace through the way they present themselves to consumers. Dynamism is the most emotional and immediately visible of the three components. It reflects the brand’s ability to inspire consumer affinity. Traditionally the outcome of a big ad campaign, guerrilla marketing event, or highly visible marketplace event, dynamism engenders a persona, community, and evangelism among a brand’s users. Dynamic brands penetrate popular culture. They give consumers something to talk about, facilitating enthusiastic word-of-mouth discussion across consumer social networks and brand ecosystems.
Simplicity
If you went to your local grocer and counted all the hundreds of different varieties of ice cream, dozens of coffee creamers and all the other products on the shelves, you’d probably come up with a figure close to 38,718. According to the Food Market Institute, that’s the average number of different items stocked in a typical US supermarket today, which dwarfs the "meager" variety of 15,000 items or so found in most supermarkets in 1991.  Whether it’s the bountiful selection of goods on supermarket shelves, or the 87,000 different varieties of beverages Starbucks claims to have offered, we live in a world of seemingly unlimited choices. Americans have access to some 9.79 billion web pages, hundreds of cable TV channels and 18 million iTunes songs, 500,000 approved iPhone apps. (See my earlier post, "The War for Attention," for insights about information overload.)

Americans have come to expect a wide array of choices, but more choices do not always equal happier consumers. Some studies show that having to make too many decisions can leave people tired, mentally drained and more dissatisfied with their purchases. It also leads people to make poorer choices and sometimes, no choice at all. (See "Do You Suffer From Decision Fatigue," NYT, August 17, 2011)

According to Barry Schwartz, a professor of psychology at Swarthmore College and author of the 2004 book, "The Paradox of Choice: Why More Is Less," one of three things is likely to occur when people have too many decisions to make -- they end up making poor decisions, they are more dissatisfied with their choices or become paralyzed and don't choose at all. And as the complexity of a decision increases, a person is more likely to look for ways -- often erroneous -- to simplify the choosing process. If there are 100 kinds of cereal, instead of looking at all of the characteristics, people will evaluate a product based on something familiar, such as brand name, or based on something easy to evaluate, such as price. Even when we choose well, we are often less satisfied because, with so many choices, consumers are certain that somewhere out there was something better. "They think about attractive things they've passed up and missed opportunities," Schwartz says.

A 2000 study by Sheena Iyengar, a professor at the Columbia University Graduate School of Business in a California grocery found that consumers were 10 times more likely to purchase any jam when offered six kinds instead of 24. In other words, faced with too many choices, some threw up their hands and opted to buy no jam.

The folks at The Futures Company suggest three actions marketers can take to combat decision fatigue:  
  1. Know your customers inside and out: Its never been more important to understand the journey your customers embark upon and the barriers they encounter each step along the way. Find out what decisions they see as unnecessarily complex or cumbersome and eliminate or automate them whenever possible. 
  2. Guide the decision: Emulate the Amazon model of providing recommendations andsignposts based on the characteristics of your target consumer and those similar to them (Customers who bought this item also bought…”). 
  3. Focus on your core differentiating traits: In a decision fatigue world, consumers take shortcuts and often make one-dimensional decisions (such as on just quality or just price) to simplify the process. Highlight the areas you stand out compared to your competition.

 As I've written about earlier, I believe that one of the tenets of great design is Simplicity. "Although simplicity is an overused buzzword, good messaging, branding and design should contain nothing that doesn’t serve a specific purpose. If you strip away all the visual clutter and extraneous elements, you can communicate what truly makes a brand special much more effectively."


Transparency
If there is one thing that we have learned from WikiLeaks to the recent uprisings across the Middle East it is that information is relentlessly public. Whether that information is about a government or a brand, consumers are able to see and learn more than ever. They know more about your company, products, and services than ever before. They sometimes even know things about your company before you do.

And, more importantly, they are able and willing to easily share that information with others. (Witness the Comcast repairman video on YouTube, which has garnered over 1.6MM views.)

Companies that recognize this new reality have opened rather than closed their borders.

Some companies have gone beyond simply opening the borders and giving up control. They’ve seen that consumers want more than just the results of your transparency efforts, they want to see the journey. They want to know: How your mission connects to their values; How long you’ve been committed; Who are the people behind the brand; How your products and services are made; and they want to know that you are human and have made mistakes along the way.

Case: Timberland’s Green Index

In 2007, Timberland rolled out “Green Index,” a consumer-facing label that outlines the environmental footprint of the company's footwear. The Green Index measures three areas of product footprints:
  • Climate impact: The greenhouse gas emissions from the raw materials and manufacturing of products;
  • Chemicals used: The use of toxic chemicals in manufacturing of products and materials; and
  • Materials used: The use of organic, recycled or renewable materials used in products.
The data are compiled to give a product an Index score from 10 to 0, with 10 being a high impact and zero being no impact at all.

Consumers are able to use the Index to examine Timberland’s shoes (every line by 2012) and decide what to purchase based on what really goes into making each one.

Case: Dole Organic’s Farm Program

When consumers enter the three-digit code from a sticker on Dole organic bananas into Dole Organic's website, they gain access to the farm' where those bananas are grown. Each farm's section on the website includes background info (country, location, certifications), shows photos of the crops and workers and tells consumers more about the origin of Dole's organic products.

Other brands that give consumers access to information on the origins of their products' ingredients (thus building trust) include:

One last bit of wisdom for marketers: brands are important, but at the end of the day, they don't require perfect trust. As Mark Twain once remarked about our nation's motto: "There never was a nation that put its whole trust in God. I think it would better read, 'within certain judicious limitations, we put our trust in God'."  Similarly, it could be said, "Within certain limitations, we put our trust in brands."




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