Insurance Marketing Magazine,
Feburary/March 2003.

Trust as a Differentiator?

by Robert Duboff and Scott Berman

"In a time of universal deceit, telling the truth is a revolutionary act" - George Orwell

Recognition of the importance of trustworthiness dates back at least to Aristotle's discussion of Ethos (ethical appeals) as one of the three fundamental tenets of persuasion in communication. But branding experts have always been quick to point out that "trust" is not an effective way to differentiate a brand. In fact, trust has always been the epitome of what we often refer to as a "cost of entry" or "table stake" - an attribute that is necessary in order to compete, but neither sufficient nor distinctive as a core brand attribute because key competitors also have been considered trustworthy.

Things are different now. The recent spate of accounting, investment, and corporate scandals, and the unprecedented media coverage that they have engendered, has suddenly changed the landscape in a dramatic way. Today, the most recognized companies are among the most suspect. Presumptions of corporate trustworthiness have been replaced by presumptions of corporate guilt. Worse yet, more than 80 percent of Americans believe that the events at companies like Enron and Worldcom are just the "tip of the iceberg."1

Unfortunately, for years large companies took their "trustworthiness" for granted and did not proactively take steps to protect their reputations (perhaps this is precisely because they have been counseled not to focus on trust). For example, the same accounting firms that find themselves in the middle of the current tempest have remained primarily reactive for years despite a seemingly endless barrage of publicized lawsuits. In fact, Arthur Andersen spent millions of dollars on lobbyists to woo politicians who quickly deserted them in the face of public pressure. The firm spent virtually nothing on engendering a positive reputation among the general public, making it that much easier for the politicians to turn on them.

As a result of the current pervasive mistrust, a unique opportunity has arisen for corporate brands to differentiate themselves on the basis of trust. What was once an attribute that was both non-differentiating and easy to attain, has become a characteristic that is not only distinctive, but also extremely difficult to build and maintain given the current level of cynicism among consumers.

So, in light of the current environment, what can companies do to build trust?

1) Be publicly honest and candid. Trust is very difficult to assert. It is human nature that skepticism sets in the moment someone says "trust me." Therefore, organizations must rededicate themselves to telling the truth, and nothing but the truth, in all of their public communications. In addition, it's not just being truthful with explicit statements, sometimes it's also what a company doesn't say that can be misleading. Corporate spokespeople have become experts at using "sleight of mouth" and tactical omissions to avoid negative publicity. However, nowadays the public is rarely that naïve and "no comment" can be tantamount to an admission of guilt. While companies can't slavishly provide the whole brutal truth in all cases, they do have to be comprehensive, since trying to hide a relevant detail is likely to come back to haunt them.

2) Ensure greater consistency of messages across different channels and audiences. There is far more spillover of advertising and communications geared toward "different" audiences than ever before. Conflicting messages across different channels not only can be confusing, but also erode trust. Much like the Major League Baseball owners lose credibility by crying poverty at the same time they hand out hundred million dollar player contracts, companies that are advertising improved customer service while simultaneously announcing dramatic staff reductions strain the limits of credibility. At a certain point, customers no longer know what to believe - though unfortunately they are likely to believe the worst.

3) Develop "contingency marketing" strategies. It's hard to trust a company that keeps changing its story. So while some CEOs think that frequent changes in business strategy are an indication of an "agile" or flexible organization, and changes in advertising strategy keep the brand "fresh," to consumers these are often signals that a brand cannot be counted on. Developing a more comprehensive strategy, that plans in advance how to act in response to a variety of hypothetical scenarios, allows the company to respond quickly and consistently to almost any shift in market dynamics, whether due to a catastrophic event (e.g., September 11) or simply a change in the competitive structure of the market (e.g., a merger of two key competitors).

4) Employ Product or Service Guarantees. Guarantees not only are a way for brands to help customers get over anxiety (by mitigating risk), but also the mere act of offering a guarantee becomes a statement about a company's confidence in its products and services (and it's willingness to stand behind them). In other words, guarantees are a way for companies to publicly state, "trust us, and if we let you down it will hurt us more than it hurts you." In general, customers like the idea that a company "has skin in the game" - a real incentive to deliver on its promises. Plus, these guarantees signal to employees the importance of consistent quality products and services.

5) Measure. Companies should continuously evaluate public and customer perceptions of their trustworthiness through formal market research. Much like a golfer who doesn't keep score, it's impossible for companies to know if they are improving if they don't know where they started and how far they have come. These efforts also allow companies to identify problems before they become severe, and to identify the most important factors for increasing levels of corporate trustworthiness.

In sum, the precipitous decline in trust of corporate brands should not be viewed as a problem, but rather as an opportunity to differentiate. While trust will be far more difficult to achieve than ever before, it is precisely this challenge that will make being "trustworthy" not only differentiating, but also defensible as never before.

1 DecisionQuest, 2002

Robert Duboff is CEO and Scott Berman is president of HawkPartners, a strategic-marketing consultancy in Cambridge.

 

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