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TRUST | Noah Brier

Trust, Brands and Transparency

How transparency can help engender brand trust.

December 28, 2006 | RSS | EMAIL | PRINT | 6 COMMENTS

In my last entry about trust, I promised to talk a little more about the role of trust, and specifically what I called the trust exchange, in marketing. As an addition to the post, I wrote, "Thinking about it again this morning, the most interesting part of this for me is the trust process. Transparency helps build reputation which can be used as colatteral in a trust exchange. This is possible because reputation has real value and can be used in lieu of things like diamonds or money."

So why does this matter to brands?

Simple. Brands are reputations: They only live in people's minds. A company uses its brand as collateral when it tries to get you to buy its products. Think about it. I own a PowerBook. I like my PowerBook. It's well designed and works great. I have a very favorable perception of Apple's brand as a result of the experience with my PowerBook. When Apple comes out with a new product they put their name on it knowing that I will associate it with their brand and the perceptions I have will carry over.

I don't think any of this is terribly new, actually. Branding and marketing developed as a way to help consumers know what was reliable. What's new is:

  1. There's less differentiation than ever before. As a result of cheaper technology and (most likely) stricter quality control laws, the difference between one product and another is tiny.
  2. The store has taken on much of the trust burden. When you walk into a grocery store you probably don't think any toothpaste they carry will make you sick. Same thing when you walk into Best Buy: Sure there might be a quality difference between the brand name and the no-name plasma television, but there's an assumption that nothing they carry could be that bad.
  3. We, as customers, are far more savvy about marketing than we once were. People don't take something said in a commercial at face value any more. I think the two reasons for this are that we've been duped one too many times and everybody is saying the exact same thing, so how can they all be right?
  4. Price comparison tools have shifted the power. I don't think people talk about this enough. The ease of price comparison and research online has done more than force stores to compete more, it has changed customer mindsets. The person willing to walk away is always in control of a negotiation and its easier than ever to walk away and get what you want from someone else.

In a way, what I'm saying is that brand is both more and less important than it ever was. More important because there's less differentiation and one great way to put your company ahead of the rest is by establishing your brand in people's minds. Less important because people are more savvy and know that chances are there's not that huge a difference between your tube of toothpaste and your competitors.

So what is a brand to do?

Well for one companies can make people feel like they're in control. Max makes a great point in his latest Online Spin article. In it he says despite the popularity of the statement, consumers are not really in total control. "Consumers now have a voice," he says, "they have more choice and can hold marketers accountable as never before. Consumers can quickly organize, mobilize, reward and punish . . . They are more empowered, but there are two sides to this relationship." Max follows with a slew of ways marketers can respect their partnership with customers.

The bottom line for me, though, is make it personal. Brand relationships traditionally exist at the 100 or 1,000 foot level. Personal relationships exist at the one or ten foot level. That's because personal connections build reputation: There's more on the line when you know someone's name, number and their kid's birthday. Transparency helps bring brand relationships to this level.

Robert Scoble is the perfect example of this. Here's a guy who worked at Microsoft and was willing to put his cell phone number on his website. He must believe in what he does to do that. If I ever really needed something I felt like I could call him up and tell him. While I don't think he would have been able to do anything, necessarily, having an ear within the organization completely changed the kind of relationship I had with Microsoft.

That's about all for now, I think there's a lot more to talk about here, but I'll save it for another time. Thanks to Adrian for getting me thinking some more about this.


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COMMENTS

1Johanna

I was actually thinking about this trust issue you brought up last night, when I ordered a 2007 calendar to be made from some of my Flickr photos. I had never heard much of the web site (QOOP), but since it was on Flickr's front page as a "cool thing to do" with my photos, I trusted it. I guess Flickr puts their reputation on the line when they link to MOO, QOOP and all the rest of them. Pretty cool, it's almost like they are at the personal level in this case, because I take the link to QOOP the same as I would a recommendation from a friend.

December 28, 2006

2Noah Brier

That's a great point I didn't really think about when I was writing. This times article about how Starbucks has expanded its offerings past coffee is the perfect example. In the article Howard Schultz makes the connection himself: "With the assets Starbucks has in terms of number of stores, and the trust we have with the brand, and the profile of our customers, we’re in a unique position to partner with creators of unique content to create an entertainment platform and an audience that’s unparalleled."

Thanks for comment.

December 29, 2006

3El Gaffney

to keep the store trust idea alive: one year ago, my mother bought me a casio digital camera for christmas... from bloomingdale's! no deference to the "experts" - salespeople at a best buy or radio shack or the tech-savvy neighbor, etc. rather who did she trust to buy from, her "friends" at bloomies. cause hey, if they are featuring one digicam, she knew they'd pick a popular, reliable one (read as: one that works) --- and more importantly, the company/store is reliable (in case i didn't like it or one day down the road, it stopped working).

justification, increased trust, loyalty, strengthened reputation: that day came... i dropped it last month and the screen went blank. she took it back to bloomingdale's and gave her a credit to the store - no passing off blame to casio and arguing over warranties. having been there, done that with a samsung dlp tv from circuit city - neither company would take responsibility for fixing within 3 months of purchase and with the extended warranty - i can see the value in finding a trustworthy brand and then allowing it to play a more active role in my life, through more purchases and info exchange. after all, she got me a few great shirts with the credit this christmas. (and if bloomingdale's was selling a digital camera this year, i'd strongly consider buying it.)

trust is personal and, as you've talked about before, transferable.

December 29, 2006

4Noah Brier

El Gaffney, great point. It's interesting to think about how trust gets transferred and where loyalties lie. In this case it's not the camera brand, but rather the store. This to me seems like a huge opportunity for retailers to cash in by offering a superior customer service experience. As a side note, I think we need to talk some more about loyalty and where that falls in the trust exchange . . . it's missing but should certainly be there.

Finally, two related links. First, a recent Times article about department stores being on the upswing and second, Grant McCracken's always brilliant analysis of the article. Enjoy.

December 30, 2006

5Adrian Lai

Thanks for the link back and helping to formalize the meme. It makes great sense...i.e. The opposite end of Consumer Privacy is Corporate Transparency.

I enjoyed your thoughts on how transparency and reputation, but have also been thinking about how in certain cases non-transparency can also build reputation. i.e. Uber-exclusive fashion brands. One might comment that the down-fall of Bape was that it became too transparent...and accessible.

Anyway, I just got off 15hr plane ride, so my thoughts are a little scattered, but what do you think?

December 30, 2006

6Noah Brier

Adrian, very interesting point, however I have to disagree on one major point. I don't believe transparency and accessability are synonomous. Exclusivity is still a major driver of luxury brands and, you're right, many of them do thrive on being seemingly opaque. However, that opacity is a bit of an illusion since for those in the know, the company is anything but. In a way a successful luxury brand is like a great two-way mirror: from the outside it is impossible to see in, however, from the other side the view is great. The aura/brand is what separates the haves and have nots.

When a luxury or trend brand overextends itself that aura melts away and all of a sudden what was a two-way mirror becomes a regular piece of glass. In this case the problem is not just transparency, but rather too much of the wrong kind of transparency.

December 30, 2006