By Saul Klein

Traditionally, focusing on an organization’s higher purpose has been the purview of social enterprises and not-for-profit organizations, or seen as an element of corporate social responsibility with limited impact on business practices.

More recently, however, we have seen a paradigm shift in the way customers and employees assign their loyalties to organizations, putting organizational purpose front and centre as a business driver and placing attention on the notion of “brand trust”.

The days of trying to cajole consumers, or even mislead them, are long gone. In the context of an emerging values-based economy, consumers pay close attention to what a company stands for, and how it goes to market matters. Customers choose to place or abandon their trust in a brand based on the extent to which it acts responsibly and stays true to its values.

Social responsibility matters
Companies realize that nothing says longevity as much as trust. So, the question becomes, how do businesses build and retain trust in their brands?

At the Gustavson School of Business, we conduct an annual survey to assess consumer trust across more than 300 different brands and what leads consumers to recommend a brand to their friends and family. The team behind the study assesses “brand trust” overall as well as three core dimensions of trust: functional trust, relationship trust and values-based trust.

Analysis of the Gustavson Brand Trust Index (GBTI) 2019 results revealed that besides the functional performance of a brand (quality, reliability, value for money) and the way it relates to its customers, consumers also pay close attention to a brand’s values and its commitment to social responsibility.

Beyond the long-term positive impact of building trust, there can also be an immediate benefit for brands taking a strong stance on social issues. One example may be found in Gillette’s recent hard-hitting “The Best Men Can Be” ad campaign, which challenged overt masculinity, addressed bullying and sexism and responded to the #MeToo movement. On the back of that campaign, Gillette witnessed an increase in its values-based trust score and in the perception that it cares about the well-being
of society.

Authenticity counts
No organization is perfect. Mistakes happen. Those organizations that welcome feedback and use it to both fix an issue and empathize with the consumer and their experience engender greater consumer trust and loyalty.

This conclusion is evidenced by MEC leading this year’s GBTI ranking, despite taking consumer criticism over the lack of diversity in its advertisements. MEC’s adept response to the concerns allowed it to edge into the top spot in this year’s ranking as Canada’s most trusted brand.

The MEC experience demonstrates that it is critical to respond to consumers with honest and authentic communications, followed by a plan of action, when faced with criticism. Trust, when correctly placed, is what makes all the difference. It is no coincidence that the top three most trusted brands overall in 2019 also received the highest relationship trust scores: measuring how a brand interacts with its customers.

Quality is critical
For an organization to be trusted and seen as credible in playing a positive role in society, it must ensure the quality and competitiveness of its product and its customer experience.

As a case in point, Tesla Motors, carrying high hopes for a sustainable future, enjoyed a great deal of goodwill from consumers for several years, rating highly in the GBTI. But as reports surfaced of disappointing Model 3 production numbers, Elon Musk’s verbal miscues and teething troubles with driverless cars, the company dropped to 32nd overall on brand trust in 2018. While the electric automaker still ranked as the most innovative and the most eco-friendly brand in 2019, the downward trend continued this year and Tesla slipped to 12th in the automotive category and 136th overall.

Canadian consumers closely link brand trust with consumer advocacy. Tesla also lags badly in terms of word-of-mouth recommendations, falling to 163rd overall in 2019.

The time to define
If ever there was an opportunity for brands to define a real social purpose, it is now. Consumer concerns with corporate misbehaviour, worries about climate change and falling trust in key institutions make the time ripe for companies to stand out.

Every year, the GBTI provides new insights into consumer behaviour and interactions with brands. It measures how the corporate world is adapting to change and earning and keeping the trust of consumers.

One finding keeps coming back stronger each year and that is the importance of having a higher purpose that is infused into every level of an organization and communicated competently and authentically. Such values-driven organizations are attracting customers as well as investors and a broader pool of talent.

Saul Klein is the dean and professor of International Business in the Peter B. Gustavson School of Business at the University of Victoria (https://www.uvic.ca/gustavson/).

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