Brand Trust - Leverage it or Lose it Diane Perlman, Independent Marketing Consultant A brand is more than a product, a logo or an identity—it’s a promise. No matter how global consumers become, they will always want to do business with brands they know and trust—brands that fulfil an actual or implicit promise made by the company. And key to this promise is the most powerful word in branding today: TRUST. Given the huge online marketplace with 400 million people accessing the Internet worldwide today, building and nurturing brand trust has never been more important. Add to that rising brand apathy, competing marketing messages, brand pollution and the consumer’s propensity to shop around for the best prices. As a result, trust, familiarity and brand awareness become ever more precious and critical to achieving sustainable business success. The Evolution of Brand Trust Just as commerce has evolved from the centuries-old concept of the village market or bazaar, so has the concept of brand trust. Commerce was once only conducted in-person, between buyers and sellers in the same or neighbouring villages who knew each other or had traded before. As time passed, products were increasingly sold in markets hundreds of kilometres away with no personal contact between buyers and sellers. Later still, manufacturers began to rely on external distributors to package and market their goods. It was at this time that companies first encountered the problem of trust. If the distributors did not maintain company standards for packaging, promotion, service and quality, the end result was customer dissatisfaction and ultimately distrust. Over the years, companies have developed various policies and mechanisms for maintaining brand consistency through their supply chains in the offline world. On the Internet, however, this challenge has emerged anew, creating unique brand trust issues impacting companies online and offline. Since the Internet began rising in popularity as a commercial vehicle, trust has been a key issue. Not just trust in the concept of e-Business itself, but also in transacting over the Internet. As some consumer fears have been allayed, the focus of trust has begun to shift from the process of transacting online to the actual brand itself, according to a recent report by NetAcademy (www.netacademy.org). This issue impacts newer online brands and existing offline brands alike. Interestingly, however, trusted brands built over time do appear have an advantage over their online counterparts, according to eCommerce Trust Study by Cheskin Research and Studio Archetype/Sapient. This study indicated that in many cases, well-known and trusted offline brands are considered more trust-worthy than well-known online brands in the same category. In either case, for customers who are often separated by great distances electronically from the brand they are buying, trust is key to reducing any perceived risk by the online consumer. As such, the Web adds a new layer of complexity to managing and engendering brand trust. In traditional branding, trust is closely tied to how well a brand delivers on a promise. On the Web, trust also encompasses privacy, security, responsiveness, speed and effective use of branding as a substitute for face-to-face interaction, among other elements. The Net Result: Brand Trust is Fleeting Critical brand trust is difficult to earn and even more difficult to maintain in the online world. Rising brand apathy, a barrage of competing marketing messages, the consumers’ propensity to shop around for the best value and the rise in ‘brand pollution’ online are chipping away at brand loyalty with every click of the mouse. Brand Apathy: On or offline, in fact, only three in 10 people are committed to specific brands today. According to Carlson Marketing Group’s annual survey, this figure is down from four in 10 in 2000, and is a strong sign of a rise in brand apathy. The Carlson study goes on to reveal that more than half of consumers will often rely on one brand or company but say they have no real preference, signalling a propensity or willingness to switch. Additionally only nine percent of those surveyed said they were loyal to just one brand—a five percent drop over 2000 figures. Competing Marketing Messages: Couple this with recent statistics showing that one fifth of respondents in a US Cyberdialogue study said they changed their opinions about brands based upon what they read online. One third of US adults surveyed have changed their minds about offline purchases based on online information. A recent Jupiter MMXI survey indicated that online consumers are able to maintain only a finite number of online relationships—fewer than 10, in fact, so new or competing online information may result in one trusted brand being displaced from the limited scope of online relationships and replaced by another. Consumer’s Propensity to Shop Around: According to Forrester Research, ‘Web-influenced’ sales expected to grow from $3.5 million this year to $11 million by 2005. Additionally, 36 percent of online consumers are ‘window shopping’ on the Internet, utilising the Web to research and compare prices, products and services, an additional 24 percent are actually shopping for and purchasing goods online, and the most Web-savvy online customers are visiting upwards of three to five sites in one surfing session (Jupiter MMXI). Add to that a recent Accenture study of online buying habits, which revealed that nearly 70 percent of online consumers prioritise price as the primary component of a buying decision. As such, the impact of online research on buying decisions—and thereby brand trust—is significant, especially among the most desirable and Web-savvy consumers. Brand Pollution Online brand pollution, or dilution of an organisation’s message through outdated or incorrect positioning, contributes to brand trust decay. Consider also the fact that 30 percent of information on the Web is more than one year old, according to Google.com—which means that negative news stories, bad product reviews or other outdated information lingering in cyberspace continue to impact consumer perception. Add mergers, acquisitions and the resulting name changes into the mix, and hard-won consumer recognition and trust is further muddied. The result is brand pollution, which may confuse consumers and impact brand trust, if not handled appropriately. For example, consider the potential consequences when a consumer clicks on a link found on a Web site, expecting it to take him to a trusted brand, but the link instead leads the consumer to an error page. Because the old branded links that have propagated across the Web haven’t been replaced with new ones, this customer may be lost forever. And the brand owner might never even realise it, because after a failed attempt to reach their brand of choice, the consumer then clicks on an active link belonging to a competitor and buys from them. The bottom line: consumers are increasingly using the Internet to make purchasing decisions. But all too often, the images and information they encounter are eroding the trust they hold in a particular brand or company. Make no mistake about it, opinions of and trust in those brands is at risk of being diminished every time consumers: ? find a trusted bank brand mentioned on an activist site protesting unethical investment; ? see conflicting pricing about their hotel of choice on an online comparison site; ? read negative customer experiences about motor car they’re researching online; or ? encounter other such online distractions that may colour or shape consumer opinion, thereby eroding brand trust. All these factors combined reinforce the urgent need for companies to understand what messages and images about their brands customers are seeing online every day. Doing so will enable them to better leverage the Web as a mechanism to help keep customers loyal and maintain and nurture brand trust. There is some good news for British brands, however, as Nielsen NetRatings recently reported that of the top 20 sites visited by British Internet users, 17 are linked to British brands, including telecoms, entertainment, shopping, banking and publishing brands. Nurturing Trust Online On the Internet, the brand is everything, virtually embodying a company in the consumer’s mind. As such, all the messages, images and information consumers read, whether on the authorised corporate Web site or somewhere else on the Internet, impact the perception of that brand. As such, in the ‘new economy’ companies must be committed to developing and maintaining brand trust in a world where consumer loyalty is more fleeting than ever. Three key components of building brand trust are: • Maximising ‘trust signals’ • Promoting multi-channel customer interaction • Promising only what one can deliver NetAcademy recommends maximising ‘trust-signals’ on the Web as a means to engendering brand trust online. These ‘trust signals’ include: 1. Experience: The sharing of positive experiences helps to reduce risk and engender trust. 2. Familiarity: Frequent exposure to a brand serves as a cue to building trust. 3. Affiliation and Belonging: People intrinsically need to belong; if they feel attached to a community, they tend to develop a communal sense of trust. 4. Transparency: Open and seemingly transparent communications, such as updating customers about the status of a transaction or order, increases trust. 5. Factual Signals and Heuristic Cues: Objective security guarantees, certificates or statements help enhance the overall feeling of security, thereby engendering trust. Not all guarantees are created equal, however, so it may be wise to rely on an established offline validation services, rather than a purely online one. Addressing these factors in combination is the strongest approach, as they rarely exist independently and the presence of one factor tends to bolster another. Additionally, in a multi-channel world, giving customers the ability to interact with your company through multiple channels is key. A recent Carlson study showed that customers who use three or more channels of communication with a company feel 66% more committed to the company than consumers with just one touch point. Most importantly, companies must deliver on their promises and promise only what they can deliver. Down at the corner shop of the new millennium, discussion of negative experiences spreads like wildfire and one bad experience can quickly multiply and influence future buying behaviour on a global scale. Summary Brand trust pays off. It costs seven to ten times as much to acquire a new customer as it does to keep a current one according to the Brand Keys 2001 Customer Loyalty study. Additionally, a five percent ‘loyalty increase’ can lead to a lifetime profit increase of 95 percent. In this world of digital Darwinism, only the strongest companies will survive and trust will be a key factor—if not THE key factor—in this survival long term. Consumer trust is vital to meeting shareholder expectations for growth and revenue generation and therefore vital to the future success of any company. Understanding how sites and commentary across the Internet are impacting hard-earned consumer trust, and maintaining overall brand trust in a multi-channel world are imperatives for business survival.   Diane Perlman, Independent Marketing Consultant  Diane Perlman is a seasoned marketing communications professional with over a decade of experience developing strategic and creative marketing, branding and public relations programs. An independent marketing consultant, Diane is providing a variety of marketing, PR and branding services to early stage technology and new media companies, communications consultancies and other businesses, in a freelance capacity. Formerly Marketing Director of Cyveillance, she created and established the Cyveillance brand in the US and the UK, with overall responsibility for the company's marketing, public relations and corporate communications activities.  Prior to Cyveillance, she spent nearly 10 years on the communications agency side, providing PR and marketing consulting to small and large companies, including Texaco, Sprint and The Washington Post. She is frequently quoted in the business press on branding issues as well as Internet intelligence, and has published articles on branding in the trade press. Diane earned her masters in business with a focus on management from Johns Hopkins University. For further information please contact Diane at: dianeperlman@yahoo.co.uk