Catalyst

When buying is a matter of trust

Amrita Nair Ghaswalla | Updated on March 10, 2018 Published on April 21, 2017

Building trust, building brand equity   -  Paperboat/shutterstock.com

Trust sways purchase decisions more than ever and brands have to convince consumers they are worthy of it

Consumers these days are overwhelmed by sales pitches and advertisements and desire a more emotional connect with companies. Trust is becoming an important and universal theme, especially as corporate behaviour is under scrutiny like never before.

Marketers aver that the definition of trust has not changed over time, but influencing factors such as speed of building trust and mistrust, especially when the larger brand identity has been ignored, have materially changed and continue to do so.

“In today’s world, trust is perhaps more important than ever, but also more elusive and fleeting,” says N Chandramouli, Chief Executive Officer of TRA Research, a brand data insights company. “It refers to aspects that are far more intangible, like is the brand caring (of its customers and its shareholders), is it competent, is it empathetic. These days, these are the intangibles that are bringing in business and sales,” he adds.

“Trust is an integral aspect when one has a relationship, whether it is with a brand or people or company. Which is why many companies spend time, effort and money building the reputation of the company,” says Nandini Dias, CEO, Lodestar UM India.

She adds that before the internet and social media “the avenues to communicate were limited, both for the brand and consumer. By and large companies managed the information and reputation.”

However, things have changed. “Now that every person is a publisher and can voice their opinion freely, especially on social media, the effort to build trust, manage reputation, demonstrate ethics, show accountability and maintain the relationship is far more. And ongoing,” Dias adds.

Long-term brand health

As brands proliferate, trust is gaining importance in influencing equity, sales and market share.

To be ‘trusted’, everything a brand does matters. Marketers insist the net effect is perception, and perceptions do change, which sometimes leads to brand erosion.

However, trust is a matter of constant progression. Ambi Parameswaran, brand strategist and Founder, Brand-Building.com, says one has to look at the long term. “If the brand value has eroded, for whatever reason, it is just indicative of a malaise. One has to see it in the context of a long-term perspective, for brands are not built in one day,” he says.

He insists trust is traded off against value. “It is always a trade-off, for a consumer looks for various attributes to the brand. Trust is over-arching and is important, and has to have certain parameters.”

TRA’s Brand Trust Report found that while trust continues to sway purchases, it does not necessarily mean it is well understood or effectively managed by companies.

Brand trust

Take Infosys, which has appointed a co-chairman to the board of the Nasdaq-listed company. Marketers see the decision as a bid to placate its founders including NR Narayana Murthy, who have been questioning certain decisions of the Board and that of CEO Vishal Sikka.

“While Infosys’ founders have gone public, alleging lapses in governance, so also has the Tata group, where the Tata Sons board turned against the CEO,” says Chandramouli. However, the Chairmanship fracas does not seem to have hurt the brand’s trust in any way, states Chandramouli, asserting the brand’s standing in the Indian market and mindshare.

Chandramouli says that both last year and this, Tata was ranked fifth in India’s Top 20 Most Trusted Brands.

“To ensure that consumers continue to trust the brand, it is imperative companies plan their succession strategies well in advance. However, sometimes it can go awry. Look what happened to the succession strategy of the Tatas, for instance. Though it was planned, we had a crash and burn. Brand Godrej, on the other hand, is not a crash-and-burn, but the brand value seems to have eroded. They (Godrej) haven’t had consistent communication for some time now,” says Chandramouli. Explaining, he says that Tata Sampann food grains brand has a clear-cut marketing strategy in using celebrity chef Sanjeev Kapoor as a brand ambassador, whereas Godrej Interio suffers from being a mix of interior solutions and steel products.

TRA’s Brand Trust Report has ranked Godrej five this year in the Diversified Super category, as against three last year. Tata group was ranked number one. Interestingly, another report has noted that a company’s consistent dedication to a specific brand attitude (such as going green or ethical sourcing) is positively related to brand strength.

White Page International, which recently released India’s Most Admired Brands and Leaders list, has highlighted how Godrej Appliances has been creating milestones in the country’s appliances landscape. It has had a number of firsts to its credit: the first green refrigerator in India in 2002, the first inverter AC in India (2005), and others.

The report also mentions how Godrej Appliances has focused on differentiating itself in its advertising, and has identified digital marketing as a focus area to build its brand presence. “Today, Godrej Appliances is among the buzziest brands in the industry with over 2.4 million fans on Facebook and over 27,000 followers on Twitter and with engagement scores that are amongst the highest in this space.”

TRA’s Chandramouli adds that though the best of brands can erode, any turnaround depends on how soon the company reacts.

“Brands need to adapt to change quickly. Like the Tatas, where professionals are now running the show. The key quotient here is the trust quotient. Companies need to act on why their trust value is getting eroded,” he adds.

As has happened for brand Samsung. The Brand Trust Report ranked Samsung numero uno , as India’s most trusted brand of 2017 in the consumer electronics category. The brand has climbed 17 ranks from 2016. Samsung’s innovative products coupled with its marketing initiatives seem to have contributed to its success. However, Samsung Mobiles, last year’s leader in the Personal Gadgetry-Mobile Phones category in the report, has had a precipitous freefall to all-India 156th rank.

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Published on April 21, 2017
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