Friday, August 05, 2016
On Mitigating Brand Risks with the Power of Brand Trust
The benefits of an information-connected world have been widely experienced by most of humankind. This unbound freedom of expression is giving rise to a new world with information democracy making a compelling impact on the fate of the big and powerful. Governments, institutions, brands, and the influential are all being subject to microscopic scrutiny by the masses, who are armed to unforgivingly ‘share’ unfiltered individual opinions. Every drop of individual reaction now has the potential to unnoticeably but swiftly swell into a tidal wave of mass opinion.
However it may be seen, Brand Trust is fragile, like a sparrow chick held in one’s hand – hold it too tight and you’ll suffocate it; hold it too lightly and it will escape. The grip has to be just right, and to keep the bird alive and thriving needs constant nurturing. The brand risks associated with loss of trust in our perplexing networked world makes predictable consequences difficult, but most of us intuitively understand that trust must be a constant endeavor for a better future.
The world’s biggest and oldest corporates are now faced with new brand risks that threaten the trust they have painstakingly built over decades. On the other hand is the world of start-ups, some of which have quickly acquired multi-billion-dollar valuations backed by the trust of their investors. In their hurry to grow, a few of these start-ups have lost trust of their consumers due to wrong action, communication, transgressions, or plain inanity.
However, no matter how different, that which went wrong in both the old and the new corporates were similar issues like security, privacy, caring, transparency, competence, sincerity, and social values, among others – attributes that make up Brand Trust. These brands did not lose trust because they had lesser revenues or lower profits, but they lost trust because they failed to prop up the essential intangibles of Brand Trust.
A brand must constantly analyze the brand risks it faces with regard to trust to create and implement strategies that will help mitigate these risks. There will be times in the lifecycle of a company when it may communicate wrongly or make mistakes. However, the risk is not in the fact that these incidents occurred, but instead is resident in how prepared was an organization to mitigate the risks faced and how it reacted to them. Learning from Brand-Trust-related risks is how organizations build greater long-term or Residual Trust.
Trust is like a river, in that its different layers of trust move at different speeds, akin to the cross-section of a river. The bottommost layer in the river is the slow-moving, more stable layer, which in Brand Trust is represented as Residual Trust – the trust accumulated over time and through repeated successes. However, this slower layer too is impermanent and is constantly moving, albeit at a lower speed. The top layer is the fastest and also the most fleeting. In trust terms, it represents anything new – new action, new brand, or new communication. Brands must see the top layer of new trust as the seed that grows into the bottom layer of Residual Trust and always act with a long-term, fundamentals-oriented view.
In almost all our consulting assignments on Brand Risk mitigation, the one aspect of diagnosis that carries the maximum risk is the stakeholders’ self-awareness of the potential of Brand Risk. In several cases, many of the stakeholders fail to recognize this basic problem, preferring to stick their heads in the sand. It is such brands that are most vulnerable to eroding their Brand Trust. There are enough cases that surface every week on some company or the other where Brand Trust is visibly eroded at the most unexpected times. As some farsighted organizations have already begun, perhaps the time has come for all organizations to create an internal Brand Trust team that constantly evaluates threats to the brand and manages its mitigation.