A significant number of research papers and articles of recent times reveals how people across the world find it difficult to trust businesses. For more than a decade and half the Edelman Trust Barometer interviewed people across different countries to ascertain the degree of trust they have on Enterprises, Governments, NGOs and Medias, and what it discovered was an unequivocal acceptance of eroding trust, especially on businesses, let alone brands. A staggering percentage of Gen Z (The youngest adults and teenagers) considers that the current leadership is incapable and incompetent to handle challenges.
This doesn’t surprise me as, we have been witnessing the deluge of short termism and myopic approach in managing businesses. Obsessive pursuit of market share coupled with meteoric rise in surveillance based capitalism is leading to depreciation of trust across the world, on enterprises and brands. Privacy, safety and fair competition have become major concerns of regulators and customers. We are becoming more skeptical and conservative in sharing our information with marketers, which is turning into a major deterrent in the process of understanding and predicting consumer behavior.
The obituary of customer loyalty is literally being written and enterprises and brands have moved to relevance based competition. Most of the conventional businesses are pivoting into platform-based business to remain relevant and build more stickiness in their products and offerings. There is a desperate attempt to retain customers on the basis of, what we know as, mousetrap innovation, by competing mostly on features and synthetic variations, and sometimes, trapping customers into an ecosystem, by cross-selling and up-selling.
In either of the situation, the customer ends up feeling more like a hostage rather than a celebrated king. Reliability issues are cascading into credibility issues and eventually, into a state of complete brand despair.
I have a strong feeling that in the process of migrating and transforming into a 21st Century business which assumes that loyalty has been replaced by relevance and hence, we live in a predominantly product-driven brand world with algorithmic strategy, there is a growing perception that investing into building trust is not exactly worthy and doesn’t have a visible and measurable ROI. This is pretty much evident from the fact that customer engagement has, more or less, become a buzzword relative to customer relationship, which is considered to be a term more appropriate for B2B businesses today. And even in B2B businesses, relationships are built on the basis of what we know as ‘Servitization’, a contractual form of relationship, fundamentally an element of the subscription economy.
Willingness to invest in core elements of trust in building sustainable relationships have somehow been pushed back in the priority list, and hence, I feel that there is a pressing need to revisit the elements of trust and consider them as imperative rather than choices in the context of investment and returns.
The first element of trust is ‘Authenticity’ or ‘Originality’, which is basically about being distinctive in identity and value, and to keep you on the same page, I must bring this clarity that the focus here is not to create a revolutionary product or radically different value proposition by remaining uncritical to R&D investment but, to thoughtfully dedicate time and resources to create brand democracy, an unequivocal belief about the brand created and established through collaborative efforts of all the stakeholders and not mere the enterprise and its branding team.
Being authentic or original is less about manifesting efforts to create new to the world products, rather, more about appreciating worthy competitors or rivals maybe even emulating them in some aspects, yet retaining an identity that has high proximity to consumers’ minds and hearts.
A pertinent anecdote of a successful attempt to build authenticity and regain the lost glory dates back to 2006 when Alen Mulally assumed the position of CEO in Ford Motors, which was on the verge of bankruptcy due to fifteen years of inappropriate and unworthy leadership. The company lost 25% of its market share while desperately attempting to acquire more of it, through the acquisition of brands such as Jaguar, Volvo, and Land Rover, concurrently introducing a number of models of its own. The obsession with size had taken over rational and thoughtful decision making. In the process of being everyone’s choice, it was turning into a brand of no one’s choice. The worthy practice of Ford motors to buy newly launched models of other carmakers, dismantling and studying them and incorporating the worthy components in their own models, appeared irrelevant to Mulally, when he discovered to his surprise that the engineers and managers of Ford did not have any idea about the experience of driving the same cars, which they dismantled and studied so diligently.
Employees were working under a constant threat of losing their jobs and hence, refrained from sharing any authentic information related to the poor performance of their respective divisions. The channel partners’ non-contentment was palpable and investors’ loath was clearly indicative of the impending collapse of the company. Mulally was highly cognizant of the fact that he had a duel role to play, of which, the first one was to be a savior of Ford’s original culture, a culture of belief in coexistence with other competitors and being appreciative of worthy rivals and the second was to establish brand democracy through collaborative efforts. Eventually, it was because of his religious effort of investing time and resources on building authenticity that Ford could survive through the recession of 2008.
The second element, which is equally powerful in instilling and inducing a feeling of trust about a brand or an enterprise, is ‘Purpose’. It is not merely a buzzword used for the sake of quasi marketing but, a stand that a brand or a company maintains in an uncompromising way. It is not surprising to discover some companies or brands sacrificing substantial revenues and profits to stick to their purpose.
One such company is CVS Health, one of the largest pharmaceutical retailing companies in the United States of America with more than 2800 outlets spread across the Country. The Company in 2014, suddenly declared to discontinue selling cigarettes across all its outlets, which was fetching an average revenue of $2 billion annually. The decision was an outcome of an annual board meeting, in which an external member questioned the moral stand of the company, the mission statement of which was “Helping customers on their path to better health”. Though the decision to discontinue selling cigarettes was taken in an unappreciated manner by the wall-street pundits, speculating a massive dent in the Company’s revenue and profits leading to a significant fall in share value, the market reaction turned out to be just the opposite. The company not only registered a phenomenal rise in the share price but, also could compensate for the lost revenue for not selling cigarettes, by selling products of some premium health supplement brands, which were previously unwilling to sell their products through CVS outlets because of its association with addictive cigarettes.
If, the first and second element of trust sounds to be more discrete in nature and thereby, establishes their relationships with the customers more through peripheral path, the third element, ‘Logic’, takes a central path.
The role of ‘Logic’ can no way be underrated, as it feeds directly to the left brain of the stakeholders. An interesting anecdote, in this case as well, dates back to 1979, when Apple was about to launch Apple III PC, after the grand success of Apple I and II. It was rather, the serendipity that Steve Jobs and his core technical team went to visit Xerox development center in California, where they discovered that Xerox was working on an amazing technology called Graphical User Interface. The interface could enable even an individual with no knowledge of computer language, to operate the computer with the help of a cursor by clicking on different icons on the desktop. However, Apple had already worked in another direction, completely different from Xerox, and had invested millions of dollars in building that. So, the core technical team as well as some key customers expressed their disagreement to start working in an entirely different direction which would lead to sunk cost. Steve Jobs, however, convinced everyone by elaborating on the potential power of GUI, which eventually led to the creation of history in personal computing.
Though, there is a relatively insufficient volume of research that talks about a structured framework or approach to creating an orchestrated effect of these three elements of trust. Nevertheless, the impact of these elements to create an unshakable trust in a brand or an enterprise is unquestionable.
What are your thoughts on building trust in business and brands?
About Dr. Mrinmoy Bhattacharjee
Dr. Mrinmoy Bhattacharjee has nearly two decades of experience spanning across industry and academia. He has been associated with the Indian telecom industry for nearly half-decade, majorly with Reliance Infocom since early 2000. He is working as an Associate Professor in the area of Marketing with Alliance School of Business under Alliance University, Bangalore, which is consistently ranked among top tier B-School in the Country.
Dr. Bhattacharjee religiously believes in being a beta version, a lifelong learner, and advocates that B-School Faculties need to be assessed on the basis of their contribution beyond journal and impact factors. He is an active contributor to national and international research journals. His research interest is in areas such as Disruptive Innovation, Marketing, and moral leadership, Lead markets, emerging markets, Social Marketing, and businesses and their sustainability. He has conducted and chaired national-level conferences and is a member of the board of studies in many Indian Universities.