Brand trust, the essential, survival skill

May 3, 2018 - In 1969, a controversial poster depicted the soon-to-be-notorious US President Nixon with the caption, “Would you buy a used car from this man?” It captured something about the times: with the assassination of luminaries like Martin Luther King and Robert F. Kennedy a year earlier, and politicians doubling down on an unpopular war, it seemed that nobody could trust anyone any more. In the popular imagination, used-car salesmen and politicians rivaled each other in untrustworthiness.

Looking back from our turbulent world of 2018, those seem like innocent times. But trust never was a given, in cars or in politics, then or now. You have to earn it. And when you’ve earned it, you have to work hard to keep it. That’s as true for brands as it is for politicians, lawyers, bankers or your neighbour who keeps borrowing your tools. And for brands, it affects the bottom line.

Brands exist because they provide a way for consumers to trust the products they buy. If your last car was a Ford, and you liked it, you trust the brand and feel safe in buying another one. If you lose that trust, the brand’s very raison d’être is undermined.

At the Gustavson School of Business, we have been measuring trust in brands for the past four years. The Gustavson Brand Trust Index measures trust in just under 300 national brands, through a sample of over 6,000 consumers, across the country.

We’ve seen brands rise and fall in consumer trust. We’ve seen brands affected by things out of their control, and then make them worse by responding badly. We’ve seen deeply mistrusted brands recover.

We think about Brand Trust in three ways. Does the brand do what it claims to do? (We call this Functional Trust). Does it treat its customers well? (Relationship Trust). And does it show a commitment to the environment, workers and communities?  (Values-Based Trust). Although we are an academic institution, this isn’t a theoretical exercise. Brand Trust affects consumers’ willingness to recommend the brand to others, and this, in turn, affects profitability. If you lose consumers’ trust, you stand to lose big, because trust, once lost, is hard to regain.

This year, the most trusted brand in Canada is the Canadian Automobile Association, which edged out last year’s winner, Mountain Equipment Co-op, for the top spot. Both brands scored high on all three kinds of trust. Third, fourth and fifth place were unchanged, with Costco, Fairmont and IKEA retaining these rankings.

Some brands showed real improvement over previous years. In an era of suspicion over “fake news”, CBC climbed from 77th overall three years ago, to 16th last year, to 6th this year; CBC ranked second (after MEC) on Values-Based Trust. For the second year running, WestJet stood out as the only airline to crack the top ten national brands.

For others, the news was not as good. On the heels of scandals about its treatment of employees, Tim Hortons – an iconic Canadian brand if ever there was one – collapsed from #27 last year to #203 out of almost 300 brands surveyed. And Loblaws’ ranking collapsed from #41 to #204 in the wake of its involvement in price-fixing on bread.

Yet the results show that you can recover brand trust: remember Samsung’s exploding-phone issue last year? Samsung came in at #220 in 2017 – but, after publicly acknowledging responsibility and recalling the Galaxy Note 7, it recovered to #53 this year.

Toyota too continued its steady recovery from past scandals, coming in at #11 overall – top brand in the Automotive category. The 2015 emissions scandal, on the other hand, did lasting damage to Volkswagen, which sputtered in second-last at #307.

For cars – used or new – for politicians, and for brands everywhere, trust matters. Our study shows that if people trust you, they recommend you. And if people recommend you, you can stay profitable and grow. Brand trust is not a luxury; it’s the essential survival skill.

David Dunne, Ph.D.
Professor and Director, Full- and Part-Time MBA Programs