Why Trust Matters More Than Ever for Brands
Image Source: Factors influencing consumer perceptions of brand trust online http://www.emeraldinsight.com/journals.htm?articleid=857857&show=html
I am spending a lot of time working on issues of trust and how it can be identified from behaviour (looking at your data) and what are the difference between generations… read this article on HBR http://blogs.hbr.org/cs/2011/12/why_trust_matters_more_than_ev.htm This is not a new topic and has been a subject of research for a long time. The difference now is that we have BIG DATA sets.
Here is my summary and views
We've all been taught that trust and reputation are important elements of branding.
The drivers of brand value have changed over time, and there are 3 forces at play
1. Company valuations, look at intangibles on the BS. In The Brand Bubble, John Gerzema and Edward Lebar highlight the fact that in the 1950s, about 30% of firm value was intangible (at the high end); today it is closer to 62% globally.
Sources of Intangible Value
- Brand: Brands, trademarks, customer goodwill, company reputation (Market Trust)
- Market Position: Contracts, licenses, legal monopolies, customer lists (Market Trust)
- Business System: Organizational models, software investment, proprietary process, franchise rights (Internal Trust)
- Knowledge: R&D, patents, human capital, IP (Internal Trust)
“So creating value today is not only about the quality of the product or service we deliver. It's very much about the quality of a firm's conduct, both internally and externally. With more consumers, more "noise" from brand messaging, and more people invested in the stock market, there is greater transparency to these elements. It is easy to see how a trust deficit will ultimately slow long-term growth prospects, regardless of favorable macro indicators.”
2. Brand leaders today — Apple, Nike, P&G — are also design leaders. Trust to try the latest innovation first (external) and trust to innovate (internal)
3. technology = sensitive personal data entrusted to certain companies QED Interbrand's 2011 global survey, six of the world's top ten brands (IBM, Microsoft, Google, Intel, Apple, HP) today are technology companies. Forging deep emotional connections with consumers. This aligns with Michael Porters work and rethinking that PURPOSE is a prime power rather than PROFIT.
… It's Apple saying that it will not accept apps for pornography. It's SC Johnson going beyond the industry standard to be more transparent about the ingredients in its products. It's the Tata group retaining every single employee and hotel contractor after the 2008 Mumbai attacks while the Taj Mahal Palace hotel was being rebuilt.
TRUST is the challenger and we don’t quite have the model for it yet or the correlation between Trust and your actions (data)