How Brands Build Trust in a Digital World.
Best practices for being transparent and boosting reputation.
If trust is a critical strategic asset, as the Harvard Business Review argues, then marketers today need to understand how to build trust in a decentralized media environment in which consumer choice is almost infinite. In an era where privacy issues have the potential to derail consumer trust and dismantle the goodwill a brand has spent decades building, it is important to understand consumers' perception of privacy. Additionally, the tactics used by digital native brands in building and maintaining trust offer models for other companies attempting to connect with consumers in new channels and in unique ways.
To better understand this shift, Huge conducted a survey of US consumers in the first quarter of 2014.
- In a connected world where both capital and users are increasingly distributed and decentralized, how can a brand build trust?
- What is the relationship for users between privacy and trust?
- What tactics are available today to help organizations to develop a “trust infrastructure?”
A brand is defined by the place it holds in the heart, mind, and wallet of its customers. It is built over time, on a foundation of trust that results from the fulfillment of promises made by the brand to the customer. However, this trust is fickle. If a promise is not fulfilled in other interactions (e.g. at point-of-sale, in the product itself, word of mouth, etc), it will not grow.
This is a time of dramatic, constant change, with huge consequences for how and where brands can make, fulfill, and even break these promises. Today, what a brand says, does, and the capabilities it enables digitally are essential in creating trust with consumers. Collaborative consumption is on the rise. Individuals who do not know each other are sharing access to products and services rather than owning them (a trend that is redefining the notion of trust as a currency rather than a concept). Reviews, word of mouth recommendations, superior customer service, and transparent pricing are engines of trust-building. While not new concepts, digitally native brands are redefining these tried and true models to build trusted reputations in new ways. Companies such as Airbnb, Uber, Everlane, eBay, and Zappos have employed one or more of these strategies to build trust in a digital economy, providing a guide for how brands that were not nurtured in digital first can build trust.
How brands built trust before digital.
Early brands emerged as a response to concerns about substandard products.
Prior to the Industrial Revolution, goods and services were associated with people, not organizations. People knew their shopkeepers, so they knew what kind of quality to expect from individual purveyors. Later, industrialization added an element of uncertainty as merchandise became mass manufactured.
The emergence of brands assuaged a new uncertainty among consumers: were the products they were buying substandard or tainted? The brand, typically represented by a recognizable label or logo, was attached to a simple promise of a functional benefit that became a proxy for the trust they had previously garned from personal recommendations. As BrandChannel explains in a 2005 article:
By replacing trust at the relatively inefficient personal level (between shopkeeper and customer) with a more efficient economic trust (between brand and consumer), brands effectively underwrote a new economic relationship.
Brands evolved into a complex set of ideas and associations.
As the number of brands increased, so did competition, and as a result marketers started to actively build brands that were more complex and nuanced. No longer was it enough to make promises based on functional benefits or points of differentiation from the competition. More complex ideas needed to be introduced and promises needed to be made that gave consumers not just a reason to buy, but a reason to choose one over another.
These ideas and associations took many forms. Coca-Cola, with its ubiquitous presence around the world, ensured its brand promise was always top of mind--known and understood by everyone. Gillette focused on a key attribute of its razors, emphasizing the number and quality of blades. Verizon--"Can you hear me now?"--stressed the rational (and even emotional) benefit of its cell service by reminding people how frustrating the alternative is. Pedigree, meanwhile, pushed the value of loving dogs shared with its customers. Gatorade owned the role it played in its consumers' lives: fuel for the elite athlete and weekend warrior alike. Finally, Disney celebrated a sense of place, or territory, its Magic Kingdom, with all of its enticing qualities. While using different approaches, all of these brands worked to motivate customers to choose their offerings by introducing and then reaffirming resonant ideas.
Broadcast played a pivotal role.
In this complex new world, TV was the primary platform for companies to reach the widest possible audience with a brand's promise. Ubiquity and reception of catchy jingles, memorable slogans, and famous spokespeople were the tools of choice. Mass communication was mostly unidirectional - advertisers told consumers about their product and consumers were relatively passive - sitting, waiting to consume what thye were told. However, this model was only as effective as the fulfillment of the promise being made. If the subsequent brand interactions (at point-of-sale, word of mouth, use of the product itself, etc) did not live up to the promises, the trust that had been built - often at great expense - would be broken.
In the past decade, the proliferation of consumer data has led to some fairly serious breaches in user privacy. Government and corporations have both violated consumer trust, leading to greater skepticism. This distrust is most acute among Millennials, who exhibit less trust of religious, government, and business institutions than previous generations (though their trust in social media is high, making it even harder for brands today to build the trust that is so valuable.
Digital technologies evolve how trust can be built.
Privacy is intrinsically linked to trust.
In the era of Big Data, companies are rushing to monetize user data. However, they risk diminishing the trust people have invested in their brand when they perpetually pursue new revenue streams instead of their customers’ confidence. While most consumers are relatively complacent in their behavior when it comes to protecting their own privacy, a breach in their personal data can harm the customer relationship irreparably. In a 2014 Huge survey, nearly two in five respondents reported that they’ve taken steps to avoid being observed online.
The vast majority (77 percent) of those respondents have cleared their cookies or browser history to avoid being observed. Hiding personal information or behavior isn’t just tied to the desktop. Almost half (46 percent) have turned off the location services on their phone. Taking more active measures such as encrypting communication or setting up a fake profile are far less popular, due to the complexity and inconvenience of these methods.
Fear of misuse of personal info prevents users from sharing.
Respondents’ greatest fear with respect to giving out personal information isn’t that their data would be stolen or used without their permission (though those concerns did rank fairly highly). The greater concern is misuse of their information for spam or junk mail. Email marketing already bombards consumers, and the fear of adding to an already overloaded inbox keeps people from sharing personal information. Brand recognition and trust are also important factors, with more than two out of five respondents citing a lack of familiarity with the brand as a disincentive to share information.
A majority of users is unsurprised by personalized digital experiences, but many notice ad retargeting.
When asked the question, “during your Internet use in the past six months, have you ever been surprised by what a site knows about you?” nearly two in five respondents have said yes. While most users are now accustomed to a personalized digital experience--or perhaps the experience is seamless enough that it now goes unnoticed--there were moments when users felt that the “Creep Line” had been crossed. For nearly a quarter of respondents, that moment was when they were offered an ad for a specific product they had looked at online. That level of specificity is perceived as being far more intrusive than a site knowing a user’s location (15 percent), or name (13 percent), or offering a more general ad for a site the user had been browsing (12 percent).
Bridging the gap between product and promise.
The techniques used by brands to build trust in the pre-digital age are far less salient to contemporary users, who are savvier, more skeptical, and more cynical about marketing messages. Today, consumers require more than slogans and a persuasive pitch. Delivering on the promise a brand makes has always been essential, but in today's consumer culture fueled by social media, a discrepancy between promise and product can be instantly fatal to a brand. The emergence of digital platforms has expanded the opportunity for brands to build trust equity.
Several tactics have emerged:
- Welcoming community feedback, reviews, and ratings.
- Offering “social proof” for a product.
- Building superior user experiences.
- Providing extreme transparency.
Most importantly, companies that have shifted from providing passive platforms to becoming active participants in transactions have built a new infrastructure for trust.
Case study: Amazon has reduced offline spending while increasing trust.
Some of the most trusted brands don’t broadcast.
According to research firm Harris Interactive, the brand with the highest reputation among US consumers is Amazon, beating out traditional brands like Coca-Cola, Procter & Gamble, and Nike. Even as Amazon has risen to become the most reputable company in the country, it has greatly reduced its spending on television. According to CMR, Amazon spent $80 million in the last quarter of 1999 on television ads. By the same period in 2000 that number was down to $50 million. In all of 2008, Amazon spent $36 million and in 2009 it was down to just $10 million in measured media on TV. While Amazon has been savvy at building awareness and setting its core promise via broadcast advertising (as it is now doing for its Kindle Fire product line), its growing consumer trust comes not from the advertising but from the experience of purchasing with Amazon, essentially delivering on the promise it had made on TV, while reducing the spend in that medium.
Instead, Amazon has nurtured consumer trust through its superior user experience. Innovations like one-click ordering and next day delivery (with an eye on same-day delivery) create a best-in-class commerce experience. Email marketing messages are highly relevant and personalized.
Great customer experiences build trust.
It seems obvious now, but great user experiences build trust in a brand. Apple understood this early on, fulfilling their promise of creativity and building brand equity and trust through great design, stylish packaging, and a unique physical retail experience. Zappos understands that as well: it offers free shipping and returns (often next day), 24/7 customer service support, and live chat help. In fact, its tagline is “powered by service,” and tales of its customer service reps going far beyond the call of duty have become legendary.
Conversely, a suboptimal experience can severely damage a brand’s trust, as the problematic launch of the Affordable Care Act exchange site illustrates. As Slate’s Matthew Yglesias puts it:
The public has long been skeptical of the political system’s practical ability to do the things progressives say they want to do. A health care website that comes in months late, over budget, and still lacking full functionality confirms all those fears when it was initially meant to debunk them. And that’s true whether or not it in some sense “works.”
While signups have bounced back from that disastrous launch and now number over 8 million, the damage to the administration’s reputation is harder to quantify. Certainly, it would be understandable if citizens were skeptical the next time the government launches a similarly ambitious project.
eBay pioneered the trust infrastructure.
eBay, which started as a peer-to-peer marketplace, faced a much greater challenge than Amazon (which only needed to shift offline purchasing to online). eBay had to create an entirely new category of shopping behavior online. While the company today is well established and highly reputable, nearly twenty years ago the challenge of building a community that trusted not only a new brand, but the promise it was making must have seemed insurmountable. Yet, eBay provides the prototype for building a trust infrastructure. It has accomplished this by:
- Investing in a team to build a formal trust infrastructure.
- Monitoring activity across its marketplace.
- Flagging potentially problematic buyers & sellers.
- Providing its own payment option by acquiring PayPal.
- Guaranteeing every purchase.
- Evolving from a passive host to an active participant in transactions.
As Wired explains: “like the explosion of institutional banking and insurance in the early 20th century, this new system acted as a trust proxy; it didn’t require people to trust one another, because they could rely on a centralized system to protect their interests.”
Other companies have followed eBay’s lead.
As the sharing economy has taken hold and grown, other companies have learned from the methods that eBay has forged. For instance, Airbnb originally modeled itself on Craigslist, expecting its users to be self-service-oriented while the company simply provided a platform to match travelers and homeowners. Over time, Airbnb has progressed beyond being a passive platform, taking on a much more substantive role in transactions. For instance, Airbnb now handles payments between parties, hosts reviews and neighborhood guides, hires professional photographers to shoot properties, and acts as the middleman for communication between owners and guests. While Airbnb’s trust epiphany came after 2011’s unfortunate “ransackgate,” the company has succeeded in building a formal trust and safety division. It has also created a 24/7 customer service hotline and $1 million host guarantee--provisions that institutionalize trust in its brand.
The advent of collaborative consumption poses a threat to traditional business models. The ascendency of brands such as Airbnb, Uber, and Lyft provides a blueprint not just for other startups, but also for traditional corporations across a range of industries seeking to validate their users’ trust. The successes of these marketplaces have several attributes in common, all of which reinforce and reward trust between parties:
- Ratings systems: Most online marketplaces have built star ratings into the process for buyers as well as sellers. For instance, Uber not only asks customers to rate their drivers; it asks drivers to rate riders as well. This data becomes more valuable as it improves service by weeding out poor drivers and customers.
- Curated content: Airbnb has begun to hire professional photographers to shoot available properties. Additionally, Airbnb has greatly expanded its content marketing efforts with dedicated neighborhood guides, tips, and information.
- People-powered: While technology has enabled these platforms to exist and thrive, successful brands haven’t forgotten the human element. Lyft is an example of a brand that has tried to humanize the experience. The signature fist bump and pink mustache, if a little hokey, are fundamental to the brand’s carefully crafted personality.
- Focus on supply: For these marketplaces to succeed, brands need to build communities of buyers and sellers. Buyers’ online behavior remains mostly consistent, whether they’re booking a hotel or someone’s loft in SoHo. However, most sellers aren’t used to shipping products or providing customer service or operating a taxi. For this reason, brands need to provide sellers with as seamless an experience as possible. Some have set up forums for service providers to share tips. Etsy has gone a step further, partnering with the City of New York to provide workshops to train sellers.
- Mobile Investment: Some of the most successful brands have realized that mobile adds a tremendous amount of value to the user experience. Rather than treating it as an afterthought, these brands position mobile at the core of the experience. Uber and GrubHub are two examples of brands that have exploited the power of location-based services, tracking drivers and delivery vehicles on their way to customers.
- Frictionless payments: Years ago, Amazon introduced one-click purchasing, not only reducing the friction in each payment transaction, but also proving that customers trust the brand enough to store their credit card information. Uber and TaskRabbit, among others, have pushed that innovation into mobile, making transactions completely seamless and practically invisible.
It's not just digitally native brands and sharing marketplaces that have embraced these tactics. Traditional brands have found success by adopting the ones that can best advance their brand promise. Best Buy and Sephora, for example, have user ratings both in-store and online. Lego now crowdsources its design work--a big step for a brand built on creative--and also offers several mobile apps that feature building tips, games and catalogs. North Face has similarly turned to mobile, with an app that doesn't just help customers find retailers but also directs them to hiking locations, lets them rate trails and provides assistance to get through their treks. Burberry has transformed itself into a full-fledged media company, using mobile and social to give people a peek behind the runway during fashion shows, among other great content. Finally, and perhaps most radically, Lays now crowdsources the choice of new flavors for its chips.
Extreme transparency breeds brand trust.
The gap between a brand promise and delivery is always getting smaller. Social media allows brands to talk authentically and directly about their products, but a few brands have gone beyond that kind of tactical transparency to embrace transparency as a business philosophy. Clothing retailer Everlane is pioneering this approach. The cult company built a customer base by showing the manufacturing process in detail, including costs for materials, labor, transportation, and even the markup. It took the concept a step further last fall by launching a section of its site to introduce the factories that produce its products.
Conversely, auto manufacturer GM is learning a painful lesson on how attempts to hide information can lead to expensive recalls, a damaged reputation, potential federal fines, and even charges of bankruptcy fraud. Embracing greater transparency earlier on could have prevented these costly mistakes, and may possibly even have saved lives from faulty ignition systems that the company knew about for five years before it acknowledged them publicly.
Word-of-mouth influence competes with professional ratings.
While professional reviews and ratings still play a role, word-of-mouth has become increasingly influential in purchase decisions. Personal recommendations have always inflected consumer opinions, but social media has magnified and intensified their power. According to the Word of Mouth Marketing Association, seven out of ten consumers refer to reviews before taking the conversation to online platforms and 81 percent of US consumers are influenced by their friends’ social media posts, compared to 78 percent by brands’ posts. Amazon, Yelp, and Sephora all have harnessed the power of consumer reviews on their sites to help guide purchasing decisions. For these sites, the power of consumer reviews and positive word-of-mouth doesn’t just build brand trust; it also helps maintain it over time.
“Social proof” amplifies trust.
Today, providing social proof is a powerful way for a brand to build trust. Airbnb uses Facebook accounts to show how many connections a user and host may have in common, or who among a user’s friends may have stayed at a particular property. More and more, brands are using Facebook , Twitter, or Google+ accounts to ease sign in, thus acknowledging and connecting with a real person behind the online identity. For these brands, social capital takes precedence over financial capital. Buyers and sellers are interacting as real people rather than as the cabbie, concierge, or cook from a large corporate enterprise.
Building trust in a brand has become a far more challenging endeavor than it was a generation ago. Even as consumers say they are increasingly distrustful of institutional structures, they are engaged in transactions that require a high level of trust equity.
Traditional trust-building mechanisms, such as marketing on high frequency and reach vehicles (such as TV) and third party endorsements, hold less sway with savvier consumers who are skeptical of the claims brands make.
As a salve against user distrust, brands such as Airbnb, Everlane, and Zappos have employed newer methods to build trust infrastructures. Embracing consumer reviews, providing radical transparency, and creating an optimal user experience are all tactics these companies have used to build and maintain trust. However, these methods are not only relegated to new online retailers. Traditional organizations can also emulate these tactics to enhance consumer trust.
Together, these tactics point to a very clear pathway for companies to harness their brand capabilities and build trust in a digital ecosystem. They must shift from being passive platforms or players and - carefully defining what they stand for through what they say, do, and enable - become more active participants in the behaviors and conversations that generate trust.