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What does it mean to be a “trusted brand”? For years, advertising agencies and businesses large and small have understood that word of mouth is the most powerful marketing campaign of all.  When someone recommends a product or service, they are not just saying they liked it; they are putting their own reputation and credibility on the line. If the other person does not like the product or service, it not only affects their future buying decision – it also affects the trust they have for the person making the recommendation. For years, hospitals have used patient satisfaction surveys to gauge their performance on customer service. The key question used as the gold standard of how they are doing is, “How likely are you to recommend the hospital to a friend or family member?” If former patients are willing to put their own reputation and trustworthiness on the line to recommend a hospital, it must really be an outstanding place. Thus reputation and trust drive business credibility and profits.  

We need only look back a short period of time to see how the erosion of trust has destroyed well-established organizations, as well as the effect it has had on public perception of corporate culture. From the Enron scandal to the sub-prime banking fiasco, mistrust of corporations large and small is rampant, and for good reason.  The more recent issue with Volkswagen’s misguided fuel economy numbers is yet to be played out, but VW has estimated it will cost the company $7.3 billion in the long run. In the short run, VW stock plummeted more than 35% and the company reported a whopping $1.9 billion loss in the third quarter, down from almost a $3 billion profit a year ago. These examples have led the public to see corporations largely as having a sole purpose – to make money – without a higher obligation to society. Moreover, it appears that those companies with higher levels of trust and a stronger reputation can weather challenges better, as the recent Chevrolet ignition issue exemplifies.

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Stuart Levine

Credit Union Times

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