The Business of Trust by Ken Bernhardt Regents' Professor Robinson College of Business, Georgia State University Atlanta Business Chronicle - July 22, 2005 The concept of trust in a brand has changed over time.  As the director of brand value company Charterbrands has pointed out, "whereas 20 years ago trust was more about quality and consistency, these days trust is about the relationship the brand has with the consumer."  A recent study by Jack Trout (coauthor with Al Ries of the classic book Positioning: The Battle for Your Mind) gave consumers 46 pairs of brands (with each pair being from the same category) and asked if the brands were becoming more or less distinctive.  In 40 of the 46 cases, consumers indicated they were becoming less distinct.  The same is certainly true in many business-to-business categories where perceived product/ service parity is the norm.  So if quality and consistency are no longer sufficient differentiators, what does it take to build loyalty?  The answer is trust.  A recent issue of BrandWeek magazine defined loyalty as "a result of a repeatedly positive brand experience that creates a relationship of trust between the consumer and a brand."  Brand defection occurs when this trust has been shattered.  Let me use the auto industry as an example.  Mercedes Benz used to be among the most trusted brands, but they have fallen from 1st to 28th in reliability according to a recent J.D. Power & Associates Reliability Survey.  General Motors' market share has fallen from 35 percent in 1991 to 26 percent so far this year, a dramatic drop. They recalled 10 million vehicles this past year.  Yet their sales increased 40 percent last month.  Why?  I think the biggest reason was for the first time in a long time consumers could trust their pricing.  The Employee Discount Program made available to everyone resulted in consumers being able to trust that they were getting a good deal and the same price that others received.  This gave them the confidence to buy now. Ford has been advertising "Ford Tough" and "Have You Driven a Ford Lately."  These ads are certainly memorable, but a recent study conducted for Ad Age magazine found that Ford was ranked third for having ads that were "most at odds with its image and reputation."  Trust in Ford took a hit during the 2001 Explorer-Firestone tire problem.  Wal-Mart was number 1 in "most believable ads" but also number 1 in ads most at odds with its image.  Issues surrounding Wal-Mart's treatment of its employees and building (and closing) of stores in smaller communities have clearly impacted consumers' trust of the company. Ken Mehlman, campaign manager for Bush-Cheney '04 told the Washington Post that "you have a world where a wealth of information creates a poverty of attention…. The way people get through is by turning to people they trust."  In the world of marketing, the way consumers get through the "cacophony of information" is by turning to brands they trust. Let's look at some companies that have been building trust with consumers.  According to one study, 28 percent of consumers say they would chose Nordstrom's as their bank if given the choice.  Given Nordstrom's lack of experience with financial services, that is certainly a demonstration of the power of trust in a brand.  Note that Nordstrom's only has 2 sales per year, so consumers can have confidence in their pricing, which is certainly not true for many department stores (explaining why consumers now wait for the frequent "One Day Sales"). NASCAR presents another example.  Fifty-seven percent of NASCAR fans say they have a higher trust in products offered by NASCAR sponsors.  This compares with 16 percent who say the same for Olympic sponsors.  Office Depot became a NASCAR sponsor after learning from a survey that 44 percent of Staple's customers would consider buying products from Office Depot if they became a NASCAR sponsor.  The phenomenal success of eBay can be attributed to the ratings of sellers done by fellow buyers.  This gives consumers the confidence to trust the seller who has a high percentage of positive ratings and to steer clear of those with negative ratings.  The classic case of trust of course is the story of how James Burke, CEO of Johnson & Johnson handled the Tylenol scare a number of years ago.   Another great example of a company focused on building trust to differentiate themselves is Hilton's Hampton Inn division.  They built trust through their unconditional service guarantee, but have continued to innovate to build trust.  Most recently, they tackled the problem of hotel alarm clocks - - Hilton's research showed that only 1 in 5 travelers trusted hotel alarm clocks to wake them up on time.  So Hampton Inn developed a truly revolutionary, easy to use hotel clock radio and installed them in all 150,000 of their rooms. Want to ensure your reputation with customers?  Then hire people with integrity.  Most hiring managers spend 90 percent of their time on capability questions and next to none on character-based questions.  Integrity Works by Dave Telford and Adrian Gostick list a series of questions that should be part of every job interview including:  Who are your role models and why; Tell me about the time you had to explain bad news to your manager; What would you do if your best friend did something illegal; What does integrity mean to you; What values did your parents teach you; Why should I trust you; What are your 3 core values; Tell me about a time when you were asked to compromise your integrity. For you business-to business marketers out there, how many of these types of questions do you ask when hiring new sale representatives?    All the CRM software in the world won't help build a strong relationship with your customers if you aren't honest and truthful in all your dealings with customers.  There have been too many examples recently of companies that, as it turns out, can't be trusted.  Warren Buffett, arguably the country's best investor, only buys companies that he has determined have senior executives who have a high degree of integrity.  Maybe he knows something that the rest of us should know.