Why customers lose faith in brand

Why customers lose faith in brand

When a brand is hit by crisis, and trust collapses, marketers must help with the recovery.

Oil giant Shell is the most hated brand in Britain, according to a recent poll by consultancy Sigwatch. Another oil company, BP, is ranked second, with mining corporation Rio Tinto third. Car manufacturer Volkswagen appears in seventh place, while three banks, Standard Chartered, Barclays and HSBC, also make the top 10.

What links all these brands is that in recent years the industries they are part of have been hit by scandal. Some of the companies have been directly implicated, others have been the cause of the controversy. When scandal consumes a brand or wider industry sector, customer trust collapses. The result: a brand in crisis.

Brand is in crisis across sectors. Hypocrisy (for example, the UK Parliamentary expenses scandal or energy companies hiking prices while pocketing huge pay cheques), exploitation (retailers’ use of zero-hour contracts in the UK, or workers’ rights further down the supply chain at Asian factories) and lack of transparency (standards of privacy and use of information on social media sites, or Tesco’s horsemeat scandal) all figure large in low levels of trust.

Can public trust in brand ever recover? Rather than trying to convince customers that any scandal was a blip, marketers would be better off asking what the public needs and expects from brands in the 21st century, and build from there. Indeed, understanding how customers feel when a brand reaches crisis point can signal how to kick-start a period of recovery.

“People today are mistrustful of all kinds of institutions,” says John Shaw, worldwide head of strategy and planning at Brand Union. “Millennials and Generation Z consumers are even more concerned about transparency. They also have a high expectation that brands will act on their feedback.”

For brands, any attempt to go back to some notional ‘good old days’ when public trust in brand was untainted, is doomed to failure. “Problems arise when you apply old models of branding in the modern world,” says Shaw. “If it’s just a veneer it won’t work.”

According to Shaw, consumers are fed up with the manifestation of purpose in ads, fed up with being preached at, and fed up with brands boasting about what they can do.

The low levels of trust in brands illustrates a basic human dislike of feeling let down or cheated:

“We don’t like hypocrisy,” says Shaw, “which means we don’t like it when a company trades on moral standards and is then revealed as trading in a less than moral way. We hate it when moralisers are found to be corrupt. So if you put yourself on a pedestal, be sure of what you’re doing.”

Lessons from crisis

  1. Brand is not a veneer: a modern brand’s values must run deep.
  2. Don’t preach: today’s customers don’t like being told what to feel, think or do.
  3. Always deliver on promise: set a good example, but don’t make promises you can’t keep.
  4. Be transparent: when trust is low, it’s imperative that customers can see that brands are not withholding any bitter truth.
  5. Act on feedback: failure to produce ongoing responsive engagement with customers increases levels of distrust.
Martin Bewick Content Lead CPL
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