As public relations professionals, we frequently find ourselves in the position of assisting our clients in understanding the importance of reputational management and of actualizing and articulating these core values in ways that can positively impact their businesses.
What truly great businesses realize is that without well-developed and constantly nurtured trust among their key constituents, stakeholders and customers, their businesses simply cannot thrive long-term. Even if they are amazingly innovative in their product development or highly creative and attention-grabbing in their marketing outreach, if they are not viewed as inherently trustworthy, they will lose the public’s goodwill over time and will ultimately fail.
Businesses hit a low in terms of being viewed as untrustworthy a few years ago. The Great Recession did more than cause business growth and profits to decline; it also caused immense skepticism among consumers and unprecedented departures from previous brand loyalty. Since then, research tells us that businesses have been doing a better job of regaining good will and trust and that customer loyalty to companies which display transparency and honesty has been increasing.
That is, until recently when consumer trust levels again took a noticeable dive. These studies show that trust in government, media and business have all dropped well below 50% in the past couple of years.
Analysts cite several reasons for this:
- The pace of technology innovation may be outstripping people’s ability to believe that new products can actually deliver upon their claims.
- Continuing CEO turnover has left some larger companies “faceless” in terms of customers not knowing who is in charge these days.
- World crises are brought to us non-stop by our media organizations, and even smaller missteps are magnified.
The tangible impact of mistrust is that two-thirds of consumers refuse to buy products and services from companies they do not trust, and conversely, 80 percent will choose to do business with companies and brands that they do trust. So, there’s a lot at stake with this trust thing!
When asked what causes people to trust organizations, the following corporate actions are frequently cited:
- Fair and equitable treatment of employees
- Ensuring that products meet accepted social and environmental standards
- Open communication of both positive and negative facts
- Demonstrated commitment to responsible business practices
- Philanthropic donations and activities
- Ongoing partnerships with non-profit organizations which are viewed in a positive light
The CEO of an organization has to also be the “Chief Trust Officer,” engaging in honest and frequent communication that fosters open, ongoing discussion on topics that really matter to the organization, as well as to its external stakeholders and customers. CEO’s cannot dodge bad news or hide behind others in their organizations when bad things happen. They have to face negative situations head-on, with all the honesty and candor they can muster.
Trust is very difficult to build, and conversely, is exceedingly easy to destroy. These recent surveys tell us that business leaders must make every important decision within the context of what it will do to the public trust level that is so critical to their ongoing ability to thrive in an increasingly transparent and skeptical world.