Trust and respect are the two most elusive things for large corporations to amass from consumers. This article looks at how corporations can achieve better brand value through transparent communications, accountability and brand purpose.
What are the most elusive and difficult things for large corporations to amass from consumers in this day and age? Trust and respect.
As with personal relationships, these two virtues are incredibly difficult to merit from consumers in a world where transparency is splayed on social media and employees, CEOs and customers can take to Twitter to voice their unabashed and unfiltered opinions.
People more than ever are wary of what companies say about themselves. This can be insincere or just ‘marketing guff’, as a colleague of mine likes to say. This is where social media, word of mouth and customer interactions are important – they offer people the chance to weigh in on the reputation of the brand. Brands are now on the defensive, having to prove themselves to customers.
Those wanting to amass trust and respect must first master transparent communications and accountability. When a company hides behind ambiguous statements and long periods of silence, and leaders don’t take responsibility – trust plummets. It’s a balance between proving your value to society and good business practices, for example through employee engagement efforts or defining a social purpose to attract ‘Aspirationals’. These are shoppers who partake in responsible consumption and place their trust in brands to ‘act in the best interest of society’. Labelled as such because they want more than product benefits from brands – they want an inspiring ethos and for brands to make a positive impact. This is a big opportunity: Aspirationals make up 40% of the global public.
People are starting to place more trust in businesses and less in government and media. Large corporations such as Google and Amazon are trusted so much in fact, people are starting to look to them for innovation at a time when government lacks trust.
A reputation study conducted by the Reputation Institute uncovers the top corporations which have garnered an ‘emotional bond” with the public. The measurement concludes citizenship, workplace, and governance contribute most greatly to the reputation. The top ten are fairly consistent, perhaps due to the companies’ commitment to responsible operations in these four benchmarks. Lego well-known for its educational commitment, Google for its “don’t be evil” motto and Adidas for its sustainability efforts.
The private sector has increased its collaboration with non-profit and government in aiding social initiatives, however, its contributions to society’s overall wellbeing and development have been poorly documented.
Annual reports don’t adequately share the benefits or beneficiaries of business programmes and initiatives. In 2008, Ernst & Young announced only about 50% of companies reported the effects of their programmes; reports tend to lack specific detail pertaining to their activities and they don’t share specific goals or targets.
There’s a shift in the way to measure brand value – a shift from shareholder to world value, or social impact. This metric, called Brand World Value, shows how people value brands and their willingness to publicly ‘take action in support of brands’ purpose’. The index shows peoples’ perceptions of brands’ purposes and how motivating they are, resulting in how willing people are to publicly support them. This measurement differs from the B-Corporations movement in that B-Corps measure the strength of brands’ social impact activity rather than how well a brand aligns with what people care about.
While shareholder value has its merits, it’s a short-term and narrow assessment of how well your brand is doing. When brands resonate with people, they in turn support active engagement (social media) or word of mouth.
If you’d like to learn more about brand purpose and how to define and activate it, please get in touch.