Public trust is in short supply in today’s fake-news era. So, trusted companies are lightyears ahead of the competition with better customer and employee loyalty as a result. To make it in the future, gaining trust needs to be a board-level priority.
The 2019 Edelman Trust Barometer shows how much public trust has changed in the past year. People are feeling less trusting, and shifting their priorities towards the relationships that they can control. For example, 75% of people currently trust their employers to do what is right and to guide them on societal issues. In comparison, NGOs scored 57% and the media came in at 47%. The report also found that consumers are particularly worried about the rise in fake news and how they can identify it.
Trust is earnt by employers
Employer trust isn’t freely given to all companies. It has to be earned by activities that go over-and-beyond the organisation’s business-as-usual. For instance, following well-publicised concerns about plastics and sustainability, toy manufacturer Lego began producing plastic bricks from sugar cane. The company prioritises its employee experience to ensure that its employees connect with the wider purpose of the brand - to enrich children’s lives. Creating a long-term sustainable way of producing its popular plastic bricks is one way that it is achieving this.
For employers that build trust with their workforce, the benefits can be great. Employees who trust their organisations are more likely to become advocates for it and are more engaged and loyal. This, in turn, helps to boost employee retention.
CEOs have a part to play
CEOs also have a crucial role to play in building trust. The public wants CEOs to stand up and lead society’s changes before a Government imposes it on them. 71% of employees want to see their CEOs responding to society’s challenges.
Pharmaceutical company Mylan (and its CEO Heather Bresch) has been ahead of its peers in tackling America’s opioid crisis head-on. It’s developing Meloxicam, a non-opioid pain medication touted as an alternative to current opioids. Opioid addiction is a national epidemic in the U.S. with many placing blame at the doorstep of pharmaceutical companies who heavily marketed and pushed opioid prescriptions in the 90s and early 00s. Mylan’s foresight is in stark contrast to its stance during an EpiPen price gouging scandal in 2016 - and perhaps a lesson learnt.
The EpiPen scandal cost Mylan dearly and was worsened by reporting of Bresch’s pay package at the same time. Shares in the company dropped over 20% after news of skyrocketing EpiPen costs and Bresch’s pay broke - and a subsequent social media firestorm.
Building consumer trust
In Mylan’s case, trust was broken between the company and its end-users. When this happens, regaining trust can be a long and costly process. Maintaining a positive relationship with customers is key in retaining existing ones and growing a customer base. But in today’s era, it is incredibly fragile. Anything from a late order or delivery mishap, to a data breach or CEO scandal, can cause consumers to lose faith in a company.
Terrible company news spreads like wildfire online, with 40% of consumers routinely amplifying the stories that they read. When Papa John’s founder John Schnatter was reported as using a racist word during a conference call, the fallout in the media and online was swift. Papa John’s and Schnatter were vilified on social media and he promptly had to resign from Chairman position. Shares are still trailing at a lower level than before the scandal in July 2018, highlighting how one incident has had a lasting impact on the bottom-line.
Futureproofing through trust
Public trust is a fickle thing for modern organisations. Increasingly, it is becoming a huge influence on the bottom-line. Yet, consumers will quickly lose trust in any business or CEO that they see as acting in an unethical or unsustainable way. For organisations to gain trust over a long time, they need to build strong relationships with their stakeholders (consumers and employees, for example).
This can be done in many ways, from creating communities and private networks, to publicising social and environmental initiatives. Following through on any promises or initiatives is key. As is being genuine and taking a stance on issues that align with an overall brand (such as TOMS and donating shoes to in-need communities).
Importantly, if an issue like a data breach does occur, organisations need to quickly rectify it and openly communicate with their customers and employees. The actions post-scandal can speak tremendous truths about a company and its priorities. Trust is usually lost when a company fails to do something, covers its tracks and is found out.
Building trust is vital for the future
Building trust is a vital step in preparing for the future. Markets are getting more competitive and volatile, thanks, in part, to trade tensions and increasing globalisation. At the same time, companies are struggling to recruit enough talented and skilled employees because of a widening digital skills gap.
A common denominator in both is trust. If consumers trust a company, they’ll be more likely to use it in the future, giving that business an advantage over its competitors. Those customers may also recommend the company to others - again, offering a competitive differentiator that can help buffer it against market fluctuations.
For employers, trust can be the difference between a skilled prospect choosing them over another company. Especially if that potential employee’s values and societal concerns closely aligns with the company’s CSR work and purpose.
Taking the lead with trust
Evidently, there is a great opportunity for companies to take the lead when building trust and invest in developing relationships with all their stakeholders, from employees to local communities and consumers. Those that don’t prioritise trust-building now are playing Russian Roulette with their futures. Since trust has a tangible impact on the bottom-line, no organisation can afford to ignore it.
Photo by Iben Kønig on Unsplash