Nobody trusts you anymore

Trust and loyalty are emerging as the biggest threats–and opportunities–for marketers in a post recessionary world.

Statistics from Sustainable Advantage, a research arm of Hayes Knight (now run by Nick Jones, former executive director of Nielsen Media Research), demonstrates this massive shift in consumer attitudes. Some 54 percent of respondents to their ‘Sustainability Priorities Survey’ said that in the last six months they have stopped buying products or services from businesses they have lost trust in.

In the same body of research, 44 percent of respondents agreed that businesses who communicate what they do for the environment and community will be perceived as more trustworthy.

So it looks like the way forward for businesses in 2010 is to communicate genuine social and environmental sustainability through trusted media channels, thus building trust, brand loyalty and sales.

Another big trend for 2010 is creating third-party endorsements for your brand (remember we don’t trust you). Shape NZ, a comprehensive research poll conducted by The New Zealand Business Council for Sustainable Development, firmly backs this point. 81 percent of respondents agreed third-party eco labels make them more likely to buy a product. The maximum margin of error for this research is +/- 1.8 percent, so it is worth taking seriously.

So who are the new breed of consumers and how do you reach them? They have many names including Cultural Creative’s, LOHAS (Lifestyles of Health and Sustainability), Consumers Who Care and Solution Seekers. Motivated by ethics, values and a desire for positive social and environmental change, this segment buys from companies that help them achieve these goals.

The Consumers Who Care research database, from Nielsen Media (available in Panorama), shows that one segment called Active Leaders are not only buying from ethical companies, they are also boycotting bad ones and getting their friends, families and companies to do the same. This segment is prominently female, well educated and represents around 8 percent of the population.

This group has the money and conscience to buy more expensive ethical products. They’re also big readers, investigating and trudging through a large amount of information online, to draw out all the important information on a company and its ethical practices (or lack thereof).

Finally when they have sampled the product and are happy with the quality and ethical ethos of the company, they will become a loyal brand advocate.

Another point to note about this group is that they are 65 percent less likely then the general population to be heavy TV users. This segment views TV as a destructive influence that stops them from achieving more important life goals.

The superficial green marketing fad has definitely come to an end. It has been replaced with more mature and less trusting LOHAS. This movement will bring new challenges that you need to be aware of.

First of all, there will be a demand for genuine social marketing. Secondly, an expectation for radical transparency from corporations and lastly, they’ll create the political will for brands to become responsible for the true value of their products. In other words, profit minus the social and environmental damage caused by the product. LOHAS are seeking products that enhance rather then detract from the communities and ecosystems that businesses operate within.

When you think about it, can there be any other logical way forward?

When we launched Good magazine 15 months ago, we believed that the LOHAS market was underserved in New Zealand media. New reader research suggests we’re onto a good thing, if you’ll excuse the pun. We have just released a comprehensive presentation based on the collaboration of four separate eco-consumer research surveys in New Zealand, along with our own Active Leaders readership results.

The results are surprisingly positive for the future mega-trend of ethics in business. An impressive 86 percent said they would spend more on a product if it was eco-sensitive.

Good has 37,500 readers. Included in this group are managers in charge of companies that represent 40 percent of the GDP. This is a small but very influential group of people who are both reshaping New Zealand’s business landscape and more importantly, your brands reputation.

You can read the research for free here: Good Guide to Kiwi LOHAS

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