Without Trust a Business is doomed for failure

There is both a business and moral requirement embedded in being effective and efficient. It ensures that a company’s stakeholders and customers are served well and that their needs are provided for. Trust is inextricably linked to the delivery of a promise. If a company promises one thing and delivers another it is doomed to failure.

Trust is also about building relationships. Can a company be insightful by seeing people as just data, segmented into crude groupings with superimposed attitudes and behaviour? Is this the way to build relevant and rewarding relationships? Many companies do and build successful brands. However, is loyalty compromised through this objective relationship and how much more successful can they be by building an emotional relationship between the company, the brand, and the customer?

Understanding customer needs is Central to a Brand’s survival

People are emotionally connected, responding to transparency and honesty. These qualities build trust and engender loyalty. Take the case of Unify, published in a Forbes magazine article. The software company based in Sacramento, California, was a hair’s breadth away from bankruptcy in 2000. A former CFO, Todd Wille, was called back into the company and had 90 days to fix the problem before the money ran out.

Wille put the focus not on budget slashing, though that had to be done, but on building staff and customer confidence through a dialogue that was built upon integrity and honesty. He appointed the head of customer service to the position of Sales VP because customers knew him and trusted him. He encouraged the sales team to call customers every week to hear their concerns and to ask for patience and to reassure them. In addition he asked his development team to produce new products based on customer needs gained from those sales conversations. Wille knew that understanding customer needs was central to the company’s survival. He turned the company around by listening to staff and customer needs and forming solutions tailored to satisfying them.

The resulting actions built a company that is now three times larger and has been rated as one of the world’s most admired companies.

Creating Dialogue through Social Media

At the centre of Wille’s strategy was an understanding of the power of dialogue, of getting people on side through engagement. He empowered people, staff and customers alike, and created an environment of trust.

I have no doubt that today Wille would have employed social media techniques to help him in his dramatic turnaround. He would have benefited from listening to the Internet traffic on Twitter and sent reassuring Tweets. He almost certainly would have posted a video to his customers creating a direct personal link, building integrity and authenticity, like Arnold Schwarzenegger did when Governor of California, in a shirt sleeved, unscripted video, to thank his followers for sending tweets on how to reduce government waste. This is the power of body language.

Building Brand Trust through Social Media

In a Mashable blog by Greg Ferenstein, he recounts how he sat down with the psychologist Professor Judy Olson to discuss the essentials of building trust with digital communications. Olson found, through her extensive research, that responsiveness is the key. In email, Linkedin, and Facebook messages much of the markers of trust, such as voice intonation and body language, are hidden. Olson found that when only text is used, participants judge trustworthiness based on how quickly others respond. For example, acknowledging a Facebook message quickly is better than waiting to respond more fully later; wait too long and you will be deemed to be unhelpful.

Social Media = Trust. Trust = Loyalty. Loyalty = Greater spend

When expectations are not met, it has a direct effect on customer spending and a powerful impact on trust. The need for transparency, honesty, and trust is essential if brands are to retain customer loyalty.

We know through experience and hard data that during times of economic hardship customers are less brand loyal. They will seek out lower priced brands with a return to their original brand choice uncertain, once economic conditions become more favourable. With a loss of loyalty comes the loss of referral.

In the 2011 Temkin Trust Rating, 6,000 US consumers were asked how much they trusted different companies. From the data 143 companies across 12 industries were rated. After the publication of the rating Temkin decided to “run the numbers” and analyse how trust relates to one element of loyalty: the likelihood to recommend. He found that consumers who trust companies are likely to recommend those companies, but they won’t recommend those that have not earned their trust. (See chart below from temkinratings.com).

Customer Trust by Industry Sector 2011 USA

In the Social Media era building trust is a multilayered process and depends upon the mindset of the company, its desire to anticipate need and with that its focus on customer satisfaction. The foundation for lasting success of any company is building trust between its customers and its brands and services. Dialogue is central to this, as Todd Wille demonstrated at Unify, as is the important adjunct to dialogue, responsiveness, as uncovered by Judy Olson.

These are the qualities that make social media a tool for our times, a democratic channel for a relevant and insightful dialogue. For many companies, it may be that dialogue is the only trustworthy currency in this turbulent economic climate.

These marketers defined it as “ …seeking to influence social behaviours not to benefit the marketer but to benefit the target audience and the general society.” It in short, created a dialogue between consumers and the brand and leveraging the value that was created in that process.

Social media is primarily Internet based: whilst your website provides company and product information and Internet tools such as search, pay-per-click, and webinars enable customers to reach further, social media is all about leveraging the connecting of people through dialogue and the formation of networks.

Social media is one part of the marketers’ multi-channel marketing tool kit. Its importance is in its ability to get under the skin of the consumer and gain invaluable insights into attitudes and behaviour of the consumer.

Social media sites represent a major entry into the internet. As current data from Alexa demonstrates, users spend more time on social networks in an average day than do most major portals like Google and Yahoo (as we point out here in Where do we spend most our time online).

So how do we measure social media?

We are in an age of metrics. There is a constant pressure to measure the effects of every activity and to refine and reassess every aspect of the marketing budget. Marketers are asked to be effective (do the right thing) and be efficient (do the thing right).

So we use return on investment (ROI) as a measurement of output (return) from input (investment).

One of the dangers of measuring everything that is done within the marketing context, is moving to the default tactic of using communication tools that are more easily and accurately measurable. The problem with this is that the most effective channels of communication are not always easily measurable. This is especially true in social media marketing where qualitative measurement is needed rather than quantitative.

Marketing Sherpas carried out a Social Media Marketing and PR Benchmark Study in 2008. (See the chart below).

How accurately can you gauge the ROI of Social Media tactics?

What this study demonstrates is that the respondents feel that advertising on blogs or social networks are the most easily and accurately measured. The cost of “advertising on blogs or social networks” is usually based on pay-per-click and conversion metrics, so advertisers are more motivated to use these tools and are more easily able to measure these tactics.

Near the bottom of the chart is “blogging on a company blog.” With this there are fewer direct costs other than staff time. This means that there is little inclination to measure the return on investment.

However, there can be considerable return if you measure this on a qualitative basis. Here we need to measure the quality of the comments on the blog rather than the quantity. You can have many comments but if the majority are negative then I would suggest that this particular metric is unhelpful. It underpins the need for quality measurement to be able to gain a deeper and richer insight and to see if the blog is, in Kotler and Zaltman’s metric, “ …seeking to influence social behaviours not to benefit the marketer but to benefit the target audience and the general society.” Quite simply, if a blog is seen to be placing a blatant brand message it has a far lesser impact than if it is seen as authentic, balanced and objective. The latter is far more effective for brand development.

The ability to measure qualitative values in these blog interactions is more challenging but not overtly difficult. If we don’t include qualitative factors in the measurement of effectiveness and efficiency, then we will find ourselves utilising marketing tools that are more easily measured, rather than those that more fully meet the brand’s development objectives.

So, even if social media is producing a good return in terms of a quantitative metric, if it isn’t increasing the business outcome it will be necessary to review the content of your social media programme and investigate and refine how you are measuring its contribution to your business objectives.

To Find out more about Social Media and how you can get a decent return on your investment give IP-SEO a call.

Contributor – Garry Titterton, CEO IP-SEO and Author of Brand Storming.