Now is a pivotal point in history for your brand. You have the opportunity, today, this week, this year…to soar high above the competition with the building of one simple, yet invaluable, notion: TRUST. It seems that brand names have forgotten about the importance of trust. They have taken the way of lies and deceit, valuing profit over value and brand equity. This might be bad news for the state of many industries; it is, however, great news for your genuine brand.
Every brand makes a promise, whether or not that promise is stated outright or implied. The Edelman Trust Barometer has found that consumer trust in brand names has plummeted—and that’s no exaggeration: Canada’s trust rate in brand names dropped 15%, and that’s just in one year’s time. This is similar to the rate drop during the economic recession of 2007/2008.
How and Why Brand Names are Breaking Consumer Trust
So what is causing this massive downturn in customer confidence in brand names?
The most obvious (and probably correct) answer would be brand names’ tendency, of late, to lie, cheat “the system,” and put profit above all else.
Volkswagen created software to falsify new-car emissions testing. The Takata air bag recall, and the deaths that prompted it, resulted from the cutting of corners in their quality control department. Starbucks was discovered to be dumping their recyclables in landfills.
What some brand managers may not realise—or hope no one else realises—is that in many respects, the market for intangible assets has far more value than tangible assets, in many cases. In 1975, 17% of the S&P500 was intangible assets, like intellectual property and brand equity, for instance. That number is currently resting right around 84%. And what is at the core of this intangible asset market empire? Trust. Not only is trust necessary for building these assets, it has become more important in the building of brands…about 500% more important in just 40 years.
- Competitive Panic: The number of brand names appearing in the marketplace is staggering, and it increases every year. Markets are flooded. Brand names are finding it more and more difficult to stand out from the crowd, feeling that they’re running out of ways to be unique. In the scramble to be seen, brand names are often tempted to make false claims to grasp consumer attention. This may benefit them in the short-term; however, in the long-term, they sacrifice trust and therefore, brand value.
- Hierarchy Advancements: Too often, brand names get caught up in staying ahead of the competition, with their industry jargon and technology, and forget that the consumer sees no value for himself in these advancements. In many cases, brand names have forgotten to ask the consumer what the consumer wants, and instead markets aspects that should remain behind-the-scenes. This confuses the consumers. It makes him feel disconnected from the brand. It results in an erosion of trust; a feeling that the brand is only concerned with advancing itself, regardless of consumers’ needs.
- The Need for PR: As consumers lose more and more trust in corporate brands, they turn to their peers for recommendations. Brand names are aware of this trend, and are feeling desperate to colour consumer opinions in their favour. They are going to great lengths to fashion facades that fit consumer needs…only to be found out after consumers have already placed trust in a strawman. This can be detrimental to a brand’s reputation, longevity, or equity.
- Neglect of the Personal Brand: When brand names focus solely on building their corporate brands, and ignore the need to build the personal brands behind the logos, consumer distrust is magnified. Why? Because the consuming public already has some serious misgivings about what they might call “money hungry” conglomerates. A great way to solidify that belief is to conceal the people behind the brand, as if they have something to hide. In short, consumers are far beyond trusting corporations; only people can win their trust.
Now that you’ve read some of the reasons brand names are losing trust, can you come up with some things your brand can do to counteract the status quo? Can you think of ways you can stand out from distrusted brand names, to be the brand people feel they can rely on?
This is a spectacular opportunity for brands that are willing to cultivate human relationships, be transparent, be accountable, and fulfil the promises made to their audiences. Will your brand be one of the good guys…or should I say one of the trusted, equitable, and profitable ones?
If you’re ready to learn more about how you can bolster your brand’s equity, I would highly recommend enrolling in our next B.R.A.N.D. Building Bootcamp. In one day’s time, you will learn to build trust in your brand, advance your brand’s reputation, and make it more visible, credible, and profitable. Register here.