THE POWER OF TRUST

Pinocio

There are few brands that can exist without trust and in a competitive environment, trust can be the difference between making a sale or not.

So why do some brands seem to throw it all away so easily by lying, exploiting people or just cheating the tax system.

Who is to blame? It’s not the marketing departments, so should you blame the CFO? Certainly the number one reason behind brands cheating the customer is greed – cutting corners to make a short term gain.

VW’s fall from grace.

There has been a lot written about the recent VW scandal and I shall not write much about it as almost everything that can be written has, but it has been described as “the most catastrophic loss of trust of any brand in 100 year.”

They didn’t just lie to the public but cheated on something that is all about ethics, and in a devious way.

Overnight they have reframed the brand from reliable to untrustworthy.

An amusing thread on Facebook:

JON: “Blimey, if you can’t trust VW, what brands can you trust?”

PETE: “Banks, you can trust banks John.”

JON: “Are you joking?!! You can’t trust banks or anyone in the financial sector, they are all crooks.”

PETE: “Exactly Jon, you can always trust them to be dishonest and unethical.”

TRUST

Brand bashing

There are obviously brands we deal with that we essentially don’t trust, and others we just like to bash. When McDonalds bought into Pret A Manger and Coca-Cola bought into Innocent there was outrage that trust brands Pret and Innocent had “sold to the devil”. The same was said of Body Shop when it sold to L’Oreal, mainly because of Nestlé’s holding in L’Oreal.

Yet Nestlé, Coke and McDonalds are three of the biggest brands on the planet, because we all buy from them. So why are we so hypocritical? If we don’t trust them then why do we spend billions with them?

Oil companies also get a lot of bashing, and there’s no lack of mocking graphical abuse of their logos. But as one oil company CEO said, if you don’t like us and we all decided to stop producing oil tomorrow there’d be a bigger outrage that American’s couldn’t drive their cars.

It’s easy to be a brand basher, but much harder to live a big brand free life.

Ask anyone who shops as discounted clothes shops if they think sweat shops are bad – most will agree they are. It’s easy to ignore brands that have dubious ethics when the price is cheap or the brand is trendy or posh. Some call these ‘conflicted consumers’ I just call them ‘hypocritical consumers’, they say one thing and do another.

The negative image of many big brands can be unfair, McDonalds has many positive ethical values and I’ve defended them several times against unjust claims.

Many of the big “bad brands’ actually do more good than bad. Starbucks buys more Fairtrade coffee than anyone; they employ local people at decent wages and also use local companies when building new shops. They also put a lot of money back into communities. By contrast that local café you so treasure pays its staff badly, abuses their rights and that Fairtrade coffee may be anything but fairly traded.

Building trust.

  1. The fundamental starting point of building trust is to respect the customer.
  1. The second is how you behave – what you do defines your brand. Not any slick slogan, token ethical or charitable scheme that is all PR or an expensive TV ad.
  1. The third is don’t lie (or spin to appoint it’s deceptive). Be honest.

When Pampers changed the formulae of its nappies water absorbing substance they told people in America but didn’t in the UK. When mothers started to see rashes they panicked and thought they were ‘chemical burns’ (they weren’t). Pampers response was defensive and arrogant, the result – they lost a massive amount of trust from mums that has still not been regained.

Mothers are one group of consumers where trust is essential and no mother will take a risk when it comes to their baby.

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When Shell ran an ad DON’T THROW ANYTHING AWAY AS THERE IS NO AWAY, claiming they were using waste CO2 to cultivate flowers, it was true, but by missing out a simple fact (very little CO2 was actually being recycled) it implied they were recycling all of it, which is a lie. It is nominated as one for the biggest green wash ads of all time.

We have come to distrust banks, and in fact the whole financial world, because they continually behave dishonestly and unethically. But if a bank could win the trust and confidence of the consumer it’d clean up.

But we all trust John Lewis and Waitrose because they treat the customer better than any other retailer, and when things do go wrong they respond in favour of the customer, not defensively.

What amazes me is that John Lewis doesn’t leverage the brand to push into areas where trust is key.

Another brand that use to be highly trusted was Virgin. A lot of that was built upon Richard Branson’s trustworthy personality. People behind brands you trust are very powerful, just take the founder of Body Shop, the late Anita Roddick, her values became the values of the brand.

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It’s not just about sweat shops and customers…

One area that has undermined the trust of a number of well know brands is their failure to pay UK taxes – over 100 firms on the FTSE 350 index have now been accused of tax evasion, with many leading firms hiding profits offshore to avoid paying UK tax. It’s led to boycotts and a lot of bad PR for brands like Amazon, Google, Starbucks and Vodafone and the creation of a new term ‘tax shaming’, which is now included as one element that defines the ethics of a business.

The true value of trust

There is an economic argument to why companies should be honest and ethical – it actually makes you a more desirable brand.

The problem is that too many CFOs only see profit and feed the shareholders as the most important factor in their business, so they think short term. And I have yet to meet a CFO who actually understood consumers; they tend to think of them as targets. The old slogan, “They know the cost of everything but the value of nothing” comes to mind.

If big brands were run by HR they’d all be a lot more ethical and honest and probably more successful long term.

Trust is an essential factor in the economic value of a brand and the fact VW lied has not only wiped millions off it’s share value (it fell by 20% overnight) but also off it’s brand value. Longer term I doubt it will ever be able to rebuild the trust lost and return to the pre scandal levels of trust it had. And the word ‘ reliable’ will be I doubt we’ll see again under the logo.

Online, negative sentiment around the VW brand increased by 1,998%.

Can you buy trust?

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One of the reasons Coke bought into Innocent was the fact people trusted it and to sell an orange juice that would take on Pepsi-Co’s Tropicana brand they needed a brand people trusted. It worked. Ironic they didn’t do the same with Zico their coconut water. It’s well known on the circuit as the least desirable because it’s made from concentrate and almost all the other aren’t – that’s the power of a connected consumer, the truth soon goes around.

Being economic with the truth is still being deceptive.

I think consumers have got smart to any product claiming to have less of something, knowing it probably has more of something else bad. Thanks to numerous TV shows and media coverage, we have discovered the truth about many products, about sugar, salt, artificial flavourings, E numbers and the many things we didn’t know we were eating.

The horse meat scandal didn’t just reveal that supermarkets could not be trusted to check the source of the food they sold but it revealed a lot about the process food industry that was less than tasteful.

With the fad of ‘Gluten Free’, brands are now being exposed for replacing gluten with unhealthy alternatives.

Once lost, can you rebuild trust?

The other catastrophic loss of trust of a brand was Sunny Delight (aka Sunny D). When mothers discovered it wasn’t what it implied (note lied is the last 4 letters of implied), it wasn’t a fresh orange juice product but artificially coloured sugar water, the brand sales crashed. The real question was why did the company lie and deliberately go out to deceive the consumer when they could have actually sold them orange juice?

In today’s socially media connected society it’s a guarantee that if you lie (or imply) you will be exposed. It is a very dumb company that thinks it can con the consumer for long.

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When Sunny D attempted to rebuild the brand I was one that advised them it was as dead as the parrot in the Monty Python sketch and trying to make the brand fly again was a joke.

It’s all about emotions.

Brands are like people, we want to trust them but trust can easily be broken. And once it is, it’s hard to win back. You can’t argue your case because it’s not about logic but about how people feel about you, and as we all know, consumers buy 80% on emotions.

Chris Arnold is founder of Creative Orchestra Advertising and Comobi2.

  • well said Chris the best thing one can do to run a business is to earn the trust of their customers no matter if it is a man and van in clapham or a big company in London or any place in the world the best thing that can run a business is trust

  • John Black

    Buisness is buisness…all small factors should be taken seriously…big or small like Man and van twickenham all these aspects need to be fallowed. Buisness growth depends on these factors.