Survey: Why trust is critical to business
By Sara Bedal | February 14, 2011
A new study shows that although informed citizens from the around the world continue to put trust in business, their trust has changed and shouldn't be taken for granted.
The 2011 Edelman Trust Baraometer, now in it's eleventh year, examined how "informed publics" (publics) - people in two age groups (24-34 and 35-64) who were all college-educated and whose income was in the upper quartile for their age in their country - viewed the trust and credibility of companies.
The results indicate that trust is now different; it is now conditional and premised on what a company does and how it communicates.
Publics in Canada are now more likely to trust non-governmental organizations (NGOs) much more than businesses (72 per cent vs. 50 per cent, respectively). This, the study authors believe, indicates that there is a strong need for businesses to create value in a way that aligns with society's interests, not just profits.
Lost trust makes a reputation difficult to rebuilt
Trust has a great impact on the credibility of what a company says. When a company is distrusted at the outset, publics are quick to believe negative information and are very unlikely to believe positive information about the company.
Sixty three per cent will believe negative information about a company they do not trust after hearing it just once or twice, while just seven per cent will believe positive information about the distrusted company after hearing it one or two times.
"Trust has transformed the license to operate for business," says Richard Edelman, president and CEO, Edelman. "Company actions must deliver on the expectations for a collaborative approach that benefits society — not just shareholders; transparency about how the company makes money; and communication in surround-sound through all forms of media — from mainstream to new to social to owned."
Impact on buying behaviour
When it comes to buying, trust played a critical role amongst those surveyed. Over ninety per cent said they had bought from a company they trusted and similarly, that they refused to buy from a company they did not trust.
What metrics are most important to gaining the publics' trust? In the latest study the most important corporate reputation factors in Canada are:
transparent and honest business practices;
A company's financial performance is at the bottom of 10 factors.
Who has our trust
Experts and academics lend are now the most credible spokesperson a company can have. Similarly, the survey found that CEOs now rank among the top credible spokespeople globally and in Canada — a striking rise from two years ago when they were in the bottom two globally.
Who do people not trust? A "person like me" was found to be the least credible spokesperson.
While Canadian publics turn to search engines first when researching a company, they will then look to online news sources and print media and ranked traditional news media (business magazines, newspapers, radio and television, respectively) as the most trusted source.
"People are behaving like smart consumers when it comes to news and information, turning first to search engines to see what is available on the topic they are interested in, and then seeking out traditional media to confirm or expand on what they learn," says Neal Flieger, chair, StrategyOne, Edelman's research firm, which conducted the Barometer. "Information ubiquity has changed the playbook for corporate communications. A company with a message can't simply be present, but rather omnipresent."
Technology companies tops for trust
Overall, trust in most industries is up globally. In Canada, the most trusted industries are:
technology — 68 per cent (most trusted for three consecutive years)
brewing and spirits — 58 per cent
food and beverage — 56 per cent
retail — 56 per cent
Interestingly, while financial services is the least trusted sector globally (50 per cent) and banks the second-least trusted (51 per cent), Canadian banks have enjoyed year-over-year stability, with virtually no change in trust from 2008 to 2011 (51 per cent vs. 52 per cent, respectively).
Crisis communications: Whom Canadians trust most
Given that trust is so important, what are Canadian publics looking for during a crisis? The answer depends on the situation.
Company crisis: Thirty five per cent of Canadian publics trust third-party experts most to deliver honest information.
Product recall: both the CEO and company technical expert are the preferred spokespeople, tied at thirty five per cent.
Community disasters: The preference shifts strongly to the CEO when the local community has been damaged, with fifty per cent of Canadian publics wanting to hear from the CEO, a full 35 percentage points above any other spokesperson option.
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