Once lost, can businesses ever recover trust in their brands? The days when companies could control their products' and brands' messaging are long gone. Thanks to social media, the opposite is now often true, and in fact, consumers are exacting their feelings and attitudes about brands with a vengeance. These reactions are in part due to the corporate scandals of a decade ago followed by the economic crises of 2008-2009. Trust in brands is very low, and meanwhile, the correlation between trust and a brand's equity has grown the last few years.
So in markets across the world, more consumers have chosen to buy from and advocate for the companies they trust. But, it is not only consumers businesses must consider. According to the think tank Ethisphere, trust is important in attracting and retaining talent: studies have shown MBA grads are as willing to work for as much as 12 percent less at companies with strong ethics. Investors are starting to be more discerning as well; 19 percent of equity funds in the U.S. have some ties to responsible investing. Plus, trust can enhance a company's worth--in 1970, 95 percent of a company's value was tied up in physical assets; currently 75 percent of a company's value is in intangible assets such as brand equity.
So, ethical performance matters. How can the laggards learn from some leaders?
The company's advocacy for equal rights of same sex partners in the 1990s did not win fans everywhere; and a generation later, Ben & Jerry's is irritating other food companies with its insistence on transparency on genetically modified (GMO) food ingredients. Speaking of transparency, Ben & Jerry's also has been communicating its successes and shortcomings in an annual report since 1989. Its latest hurdle: the company's promise to source only fair trade ingredients is not moving as fast as it would like.
As Warby Parker's General Counsel and Head of Social Innovation, Anjali Kumar explained that it is absurd consumers are paying as much for a several hundred-year-old technology as they are for an iPhone. Meanwhile, Warby Parker undertakes a holistic social mission, promoting entrepreneurship in the eyewear industry abroad while purchasing carbon offsets so it is a 100 percent carbon-neutral company.
Jim Farley, who heads Ford's global marketing operations, explained that all the data stored within its cars' computer chips opens a can of privacy worms, so it is up to Ford to be careful stewards of all that information. With more people spending more time in their cars, Ford is in a position to monitor its customers' health as biometrics can help gauge their blood pressure and breathing--and therefore prevent accidents from fatigue. But then again, all that health information must be carefully guarded. As an aside, while it is true the U.S. government needs a solid energy policy and has to allow an infrastructure for next generation of cars such as plug-ins in order for them to succeed and proliferate, Ford must prove it is committed to improving such cars' performance and making them more accessible.
The stubborn truth for companies is that as in politics, the misstep is not so much the problem as the coverup or smarmy public relations blitz. Authenticity, not spin, is how companies must carry on their conversations with their stakeholders, including customers. Whether or not you agree with their social mission or like their products, we are better off if we have more companies such as Ben & Jerry's and Warby Parker. Multinationals and startups could look to both as they sort out how they can "do good."
Disclosure: Ford Motor Co. covered the cost for the author to attend the conference.
Statistics in the article provided by Ford Motor Co and Ethisphere.
Based in Fresno, California, Leon Kaye is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).
[image credit: Leon Kaye]
Leon Kaye, Executive Editor, has written for Triple Pundit since 2010. He is also the Director of Social Media and Engagement for 3BL Media, and the Editor in Chief of CR Magazine. His previous work can be found at The Guardian, Sustainable Brands and CleanTechnica. Kaye is based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas.