LONDON: Trust has always been hard to earn and easy to lose. However, in the current climate, where the pillars of British society have been turned on their heads, brands need to do more to build confidence among increasingly suspicious consumers.
The notion that trust is a key element of brand value to be protected and nurtured is nothing new. Put simply, if consumers do not trust a brand they will not buy it, particularly when many are carefully watching every penny they spend. One of the notable trends of the recession has been shoppers' embrace of comfort brands - from Bird's Custard to Spam. In times of turmoil, then, trust is even more crucial.
A study from Lightspeed Research, conducted exclusively for Marketing, shows that trust is now a bigger issue for brands than it was 12 months ago with 14% of consumers less trusting of advertising than they were last year. No brand is safe from the erosion of confidence that has swept society. Even The Daily Telegraph, the newspaper that published the exclusive information on MPs' expenses, is now trusted less than it was a year ago by 14% of consumers.
With lax banking practices pushing the economy into recession and the cloud of scandal hanging over the Houses of Parliament, confidence in Britain's leading institutions is at a low ebb, which has a knock-on impact on consumers' relation-ships with brands. Questions remain over how this erosion of trust is affecting consumer attitudes and what marketers should be doing to combat dwindling confidence.
'Factors such as fair pricing, consistently delivering a good-quality product or service and being open and honest about environmental and ethical policies all help build brand trust,' says David Day, president and group chief executive of Lightspeed.
'As the voice of the consumer grows in power and influence, through the internet in particular, it is those brands that can deliver on their promises and maintain trust that will succeed.'Trust in the banking sector is particularly low. For the Royal Bank of Scotland - one of the banks that had to be bailed out by the government - 63% of respondents to Lightspeed's survey said that they trusted it less than they did 12 months ago. Even Barclays, which has crowed about the fact that it took no Treasury handout, has suffered a drop in trust among almost half of respondents. The research therefore confirms the widespread suspicion that consumers have simply lost confidence in the banking sector as a whole.
When it comes to purchases, one in five respondents said they had not changed the frequency with which they buy new products. However, the same proportion also said they were less likely to make such purchases now than 12 months ago. The 18- to 34-year-old age group was more likely to buy new products than any other, while the over-55s reported unchanged shopping behaviour most often.
While the recession means that brands are placing greater emphasis on a price message, an overwhelming proportion (91%) of respondents said they would be willing - some of the time, at least - to pay more for a brand they trusted.
The research suggested that brands and supermarkets that have been driving down prices are doing themselves a disservice if they discount their products too heavily.Indeed, brands may even be undermining trust in their products and services simply by being seen as too cheap.
Moral issues
According to Alistair Leathwood, managing director of research group FreshMinds, brands need to be aware of the difference between the trust that consumers have in a brand to fulfil its function effectively, as opposed to trust in
the morality of a company. 'If goods cost more, you may actually perceive it to be better value and have more trust in its perform-ance,' he says. 'For example, you pay more for a Mercedes than you would a Citroen, as you assume the Mercedes is better-made and more competent.'
There were also big differences between product categories. However, there was no straightforward correlation between the importance of price and the perceived value of a product. Low-interest categories, such as insurance, languished at the bottom of the scale - with just 27% of respondents willing to pay more for a brand they trust. In contrast, food and grocery items were at the top of the list with 59%, followed by shoes (43%) and clothes (42%). Compared with older age groups, 18- to 35-year-olds were much more likely to be willing to pay extra for trusted clothes and shoes brands while the over-55s were most willing to pay extra for a trusted insurance brand.
In terms of industry sectors, the media was viewed as least trustworthy (37%). It was followed by banking (33%), gas and energy suppliers (28%) and insurance companies (23%). On the other hand, just 3% of respondents cited food producers and 4% supermarkets as completely untrustworthy.
Women were more likely than men to view the media as untrustworthy, while men were more likely to report a lack of trust in the banking sector. It is clear that brands are facing up to a serious collapse in consumer confidence, which is having an effect on the trust that people place in brands. While price has been the cornerstone of many marketing strategies since the economic downturn took hold, maintaining trust is also vital. Brands that fail to earn or maintain that trust will inevitably find themselves out of favour.
Methodology
Marketing supplied online panel provider Lightspeed Research with questions to ask a sample of 1000 UK consumers. The survey was run online between 2 and 6 July 2009. The list of brands given to respondents to rate was compiled by Marketing.