In business and in our daily lives, trust is powerful, but fragile

May 4, 2018 - When things break, our instinct is to want to fix or replace them.

But can we fix trust? Last year’s fiasco involving Canada’s staple food – bread – and the alleged price-fixing by grocery brands had measurable impact, as mistrust sneaked into the bread aisles of Canada’s go-to grocers. 

The annual Gustavson Brand Trust Index comes in with answers to help us better understand the rise and fall of consumer trust. Each year we collect data from more than 6,000 consumers in Canada on the extent to which they trust about 300 different brands. We measure beliefs that the brands deliver on basic promises of reliability, quality and good value, that they communicate with us fairly and treat us well as customers, and that they play a positive role in society.

What we are seeing year in and year out is that trust plays a vital role in our community, economy, and collective mindset. It is also an important driver of consumer purchasing decisions. The release of our new set of brand trust results highlights the continued success of some of Canada’s best-known brands, which shows a resilience that is essential for sustaining our trust, as well as the consequences of corporate mis-steps.

While Loblaws fell from 41st to 204th place in 2018 on the back of the bread price-fixing issue, this year’s poster child for a successful rebound is Samsung Electronics. In the aftermath of its combustible phone scandal, Samsung’s trust ranking plummeted last year, from 14th place in 2016 to 220nd. But in an amazing recovery, the tech giant turned a crisis into an opportunity and is back up to 53rd in 2018. After the Galaxy Note 7 recall, Samsung was able to regain its footing by taking responsibility for its fault, launching new products and leveraging its strong history.

Not so successful was Volkswagen which remains mired at the bottom of our rankings, unable to recover from its emissions cheating scandal. Part of the lesson we take away from this sorry state is that consumers are les forgiving if high level malfeasance is involved and the brand is slow to admit its errors or to provide appropriate remedies.

The 2018 results also show that Tesla Motors, carrying high hopes for a sustainable future, downshifted in terms of trust this past year. An inability to meet production targets and mis-steps on the road to driverless cars, saw Tesla slipping from 1st place in the automotive category down to 6th.

Some categories have chronically low brand trust, such as airlines, most of which remain at the bottom of the heap – except WestJet, which comes in tenth on the list of Canada’s Top 10 Most Trusted Brands, demonstrating the value of standing out from the crowd. 

Each year, the results are riveting. Seeing the gains and the falls, the resilience and the outliers gives us a pretty clear vision on how customers respond to news of corporate wrongdoings, misuse of personal data and flops in product safety and quality. Losing trust has deeply negative consequences, while gaining it pays off abundantly in the long run.

The index results also serve to highlight the impact of failing to meet consumer expectations and the rebound of brands who have faltered on consumer trust in the past – showing that trust indeed can be fixed. Doing so, however, requires a strong and real commitment to doing the right thing, a fast and powerful response when things go wrong and a past history of responsible behaviour to fall back upon. And that is great news for businesses, as they need customer support to survive and flourish. Nothing says longevity as much as trust.

Quoting Warren Buffett, the sage of Omaha: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Saul Klein, PhD
Dean of the Gustavson School of Business