What makes a trusted brand?

Sandy Macdonald, Head of Sustainability, Standard Life gives his expert viewpoint on how companies need to act if they want customers to trust their brands. Follow Sandy on Twitter - @sl_sandymac

As someone who’s come into sustainability from a marketing background, and who is working in financial services, I’m well aware there are those out there who believe people like me may well be part of the problem.

My perception is different, of course.  I believe that good Marketing and Corporate Responsibility professionals actually don’t usually focus on spin, green-washing, or putting up barriers to senior leaders so they can spend their time on other priorities. Rather, they’re about building and acting on insight, provoking change and facilitating two-way communication so that customer and stakeholder views are amplified to senior management and influence the way business is done.

I don’t pretend to have all the answers, or that there isn’t always room for improvement, but I’ve made various observations on what businesses can and should do to build trust in their brand which might be worth considering when looking at marketing and sustainability strategies:

1. All consumers expect certain minimum standards.

Don't expect credit for not cutting down trees, not committing fraud, or not exploiting cheap labour.  Tell the customer, “Ah, but our products aren’t causing deforestation any more, and we don’t use slave labour,” and they’ll think “Well of course you shouldn’t, that's just as I'd expect!”

As well as the environment, human rights and ethical conduct, I’d include treating employees, suppliers and customers fairly, paying a living wage, and paying a fair tax contribution in this bracket.  Getting these fundamental aspects of good business in place creates the foundation for everything else.

These minimum standards inevitably change over time. The best companies recognise this and act on trends. And if you look at issues like diversity and inclusion, fair work, or environmental standards, there’s only ever been one long-term direction of travel. The trend over time is almost never to roll back or reduce standards for responsibility and ethical conduct. Leading companies that generate higher levels of trust and monitor societal trends stay ahead of this curve on minimum standards.

2. Think about the role your business plays in society

To me, this is one area where the leading sustainable businesses often have an edge on others. It’s where strategy takes on wider responsibility and the particular impact a business can have. It’s about knowing your full range of stakeholders and what they expect of you.

One company that’s done interesting work in this area is Heathrow airport.  It looked at what their community expected of them, then built an action plan based on noise reduction, improved traffic management and parking in local towns, and opening up more employment opportunities in the local area, alongside the things you’d expect of them as an airport1.

At Standard Life we focus on our impact as a large employer, through the role we play in helping people save and manage their money, and through the impact we have in investing the assets we have under management.  All of these are especially relevant for us and the purpose our business plays in society, so have the potential to have a significant positive impact if we consider them appropriately. 

I think the days of considering marketing strategies purely in terms of the seven Ps (product, price, place, promotion, people, process and physical evidence) are gone2. These factors can drive commercial success, which is of course a vital part of being sustainable, but to be considered responsible and trusted, you need to think about wider society and the environment, and the purpose of your business within that big picture context. Maybe we should add an eighth P - for Principles, or perhaps Purpose?

3. Values and leadership behaviours build business culture

Most evidence shows that the companies people trust make decisions that demonstrate their values in action. So, when there’s a crisis, what drives decision-making? Does your business put itself in its customer’s shoes, understand their expectations and always aim to deliver on them? Do you and your business think about what ‘the right thing to do’ is? Or do you consider the financial impact first?

Most big companies have a set of corporate values, and maybe even a code of conduct, on their website. But the thing that actually  makes the difference is when senior leaders bring those values to life and lead by example in the way they act and the decisions they make. Whether a person or business, the best way to build trust is usually through the things you do and the way you act, not what you say.

Us marketing and corporate responsibility professionals need to work with leaders across their businesses to ensure they have the right stakeholder insight to help make difficult decisions. And we need to ensure we don’t present information from an idealistic, ‘ivory tower’ position that can too easily be ignored by other business leaders. If the information we provide is relevant, and presented in a way that shows we understand what others are trying to achieve, then sustainability offers a route to both mitigate risk and create value.

We should also make sure we appreciate the good things leaders in our businesses do, and reward and recognise positive behaviours to reinforce them. Often I’ve discovered people are doing things that make our business more sustainable but they’re not badging them that way, It helps when we make the link. All of this helps build a strong culture giving leaders the confidence to live by their values to deliver customer, societal, environmental and long-term commercial benefit.

4. Commitment and transparency build trust

Leading, sustainable businesses live by the courage of their convictions.

  • They integrate key environmental, social and governance considerations in to their business and their plans for the future.

  • They’re willing to share the processes they use to make decisions, communicate effectively and with empathy, taking time to ensure customers understand their products and services.

  • They set and publish targets for the impact they’re going to have.

  • They engage their employees in a vision for the future and the difference their company is going to make in the world.

O2’s Think Big blueprint, or Unilever’s Sustainable Living Plan are well-known examples for good reason.

There’s always a risk when committing to public targets that they can drive the wrong kind of behaviour, or leave you hostage to fortune.But when underpinned with the other points made here, and a culture of honesty about progress, it can make the difference between being in the peloton and leading the race.

Maybe you’re still wondering how much building trust in your business matters. If so, consider the following. According to the World Economic Forum’s Leadership Trust and Performance Project, trust drives 22% to 44% of overall customer loyalty, and companies who are most trusted by their employees experience up to 50% less staff turnover than their competitors3.  And according to Millward Brown’s extremely comprehensive BrandZ annual study of global brands, trust in your brand has a clear correlation with company value and growth4.

The modern, connected world offers huge opportunity to engage and build relationships, both inside and outside your business. But it also presents huge risks to your reputation when things go wrong and then that goes viral.

Investing in building a trusted business is valuable not only because it helps protect you against the likelihood of negative incidents and because it helps deliver competitive advantage on a number of levels from employee engagement to sustainable innovation. It’s also valuable because, if things do go wrong despite all your best efforts, then having a trusted brand is also much more likely to give you the benefit of the doubt and help your brand bounce back quicker.

At Business in the Community, we're asking companies to put purpose at the heart of the products and services they produce.  Find out more about the benefits of being a purpose-driven brand in the Purpose Toolkit - free to download now.  #PurposeDrivenBrands 


References

1 Heathrow Airport: http://www.heathrow.com/file_source/Company/Static/PDF/Communityandenvir...

2 The seven Ps: http://marketingmix.co.uk/

3 The World Economic Forum’s Leadership Trust and Performance Project report: http://www3.weforum.org/docs/WEF_EvolutionTrustBusinessDeliveryValues_report_2015.pdf

4 BrandZ report: https://www.millwardbrown.com/BrandZ/2015/Global/2015_BrandZ_Top100_Repo...