Why build trust?
Why trust? In our view, if you are building trust you are building reputation.
Careful management of one’s reputation is a key generator of value for companies. Value is unlocked both as stored reputation equity in times of crisis as well as in creating greater business efficiency for the company through:
- Regulators: giving you a seat at the table when stakeholders and legislators are making decisions about your organisation.
- NGOs: propensity to work with or against you.
- Consumers: greater marketing efficiency,
- consumers’ desire to buy your products and/ or services.
- Employees: the ability to attract the best employees, employee pride in working for you, employee likelihood to work well for the company.
- Media: disposition to report positively or negatively about you, willingness to hear/ present your side of the story.
- Investors: confidence to invest in you, willingness to ride out downturns.
About companies in the top trust tier
The top Trust Tier companies are nearly all global household names and have been able to transfer the best aspects of their country brand into the global marketplace. Interestingly, sectors most likely to be in the top Trust Tier are in technology, food and beverage, whereas the least trusted brands are in finance and oil /mining.
Trusted companies are more resilient and have a better financial performance
Companies with stronger reputations that had weathered recent crises were perceived to be recovering much more quickly than those with lower levels of trust.
Trusted companies also perform better financially. While the two middle and bottom tiers have remained essentially static from the beginning of 2015, the sharemarket index for the most trusted companies increased by 68-points, thus proving that being trusted benefits the bottom line!
What makes top trust tier companies different?
Top Trust Tier companies are strong across all aspects of business, from staff, product and service quality to innovation and social impact, and these strengths are closely connected and used together. All types of companies have the potential to become a top Trust Tier company, as long as they’re willing to put in a strong effort to manage their reputation.
Trust differences around the world
Trust in companies varies greatly around the world but some clear patterns emerge. With the exception of people in the United States, those in more established commercial economies such as Western Europe, Australia and (by extension) New Zealand tend to be the least trusting of business brands. In contrast, developing countries tend to have the most trusting people. This has implications for global brands who will get very different results from their activities in different countries. It also raises the question about why countries with the greatest exposure to modern marketing have become the least trusting.
The final word
Top Trust Tier companies are able to unlock the value of their reputation irrespective of economic conditions or consumer scepticism, allowing the most trusted companies to develop and maintain a positive feedback loop to financial success. Trust enables companies to operate more efficiently and with fewer headwinds – thus increasing their likelihood of financial success.
In addition, highly trusted companies are also more resilient in the face of crisis, allowing them to more quickly overcome crises and get back to running their business successfully.
The fact that the top Trust Tier companies tend to be major brands is not just about marketing budgets, as they all were once small companies, and those in some sectors still struggle to win trust despite size and longevity. This demonstrates that it is never too late to examine and manage one’s company performance through the lens of reputation.