Brands With Purpose Are Trusted More: Here’s Why
In light of the impacts of COVID-19 and the economic crisis, Edelman released it annual Trust Barometer 2021 last month, which highlighted just how much the pandemic has put consumers’ trust to the test. With a perceived rise in misinformation, crisis in leadership (especially the failures of governments), business was reported to be the only trusted institution across the globe.
In fact, 76% of respondents advised they trust their employer more than any other institutions (government, media, NGO’s), and sees them as both ethical and competent.
At the same time, there is also a growing fear that the pandemic is deepening inequities across the world - (healthcare, education, climate change, racial equality) and there is an increasing urgency for these issues to be addressed. Businesses are expected to fill the void left by the government.
This has resulted in the role of the CEO being asked to take the lead in fixing societal issues rather than waiting for the government. A whopping 86% of respondents advised that CEOs should speak publicly about issues affecting our society.
WHAT IMPACT DO THESE SHIFTS IN TRUST HAVE ON YOUR BRAND?
Edelman also recently released The 2021 Edelman Trust Barometer Special Report Trust: The New Brand Equity, which reveals consumers expect more from brands than ever before.
"The definition of brand relevance goes far beyond reflecting culture now," said Edelman CEO Richard Edelman. "It's now a demand: change the culture, and if you do that, I will reward you."
When brands don't meet expectations of their stakeholders, consumers said they have the power to force change, with 63% saying they can compel a brand to change almost anything about itself.
The study also found 78% of respondents believe their influence extends beyond the consumer experience to business operations - including 39% saying they can ensure materials are environmentally friendly, 27% that they can get a CEO to speak out on an important issue and 25% saying they can get rid of a CEO if they disapprove of their actions.
The progression to such consumer-demanded brand activism began around 2017, when politics, populism and nationalism started coming to the fore and brands were thrust into debates about trade issues and societal values, according to Edelman. Belief driven buying then evolved the following year to brand democracy where consumers voted with their wallet.
Then the pandemic hit.
Now, consumers are more closely aligning with brands by reviewing the companies that own them. The study found that 40% of middle-income consumers and 50% of high-income consumers said they would no longer buy from a brand because they do not trust the company that owns it.
Therefore, trust drives growth. Trusted brands are rewarded with purchase, loyalty, and advocacy.
WHAT’S PURPOSE GOT TO DO WITH IT?
Consumers have moved away from brands for image or trendiness, and now want brands that provide more valued based propositions.
In essence, brand relevance was formerly limited to its connection to culture, but since the pandemic, the definition has now been broadened to include culture, purpose, and society - a brand must now connect to all three.
In summary, brands must now must work to change the world, and business integrity is foundational to brand trust.
OTHER KEY FINDINGS FROM THE STUDY:
86% or respondents advise that they expect brands to take one or more actions beyond their product and business
More than two-thirds of respondents (63%) are more attracted to brands focused on making the world a better place;
Changing societal issues improves a brand’s performance across all trust-building dimensions when compared to brands that focus only on product functionality, with purpose ranking the highest trust builder (62%).
40% of consumers said they will give up a brand if they don’t trust the company. In contrast, 61% advise they will advocate for a brand if they trust it.
Brands must balance peer and expert voices, with 57% of consumers viewing academic experts as most credible when discussing the quality or value of the brand and 57% viewing a person like themselves most credible when discussing the lifestyle or fit of the brand.
The Trust Barometer surveyed 14,000 people in 14 markets: Brazil, Canada, China, France, Germany, India, Japan, Mexico, Saudi Arabia, South Africa, South Korea, the U.A.E., the U.K. and the U.S.
