Trust, Brands and Transparency

How transparency can help engender brand trust.

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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It's All About Trust

Ever wonder why we trust people?

A few months ago I let Noah crash at my apartment. It was the second time we'd met in person and I allowed him to sleep on my couch for a week.

Strangely enough I wasn't bothered by this. Actually, I was more bothered by the fact that I wasn't bothered at all (sorry to get all meta ya'). I found it incredibly odd that I was totally cool with this stranger staying in my home. I kept asking myself why I trusted him.

The more I thought about it, the more his website came up. Noah's homepage has his cellphone number. He writes about his mom and dad. He exposes how many RSS readers he has to the world. That's some serious controlled exposure (or radical transparency if you prefer Chris Anderson's naming schema).

After cataloging all these things I realized that I was allowing him to use his reputation as a form of collateral in our trust exchange. By combining Okdork.com with the fact that we traveled in similar circles and have shared acquaintances, I was willing to give him my trust. I guess I felt like someone wouldn't risk an, albeit micro, empire to do something bad to me.

And I turned out completely correct.

So looking back, what were the big lessons of this experience? (And I'm sure my buddies at trustmojo would have much more to say.)

1. Reputation, reputation, reputation. As my friend Ryan Anderson said, "You only have one reputation, and it’s yours to ruin." While the value of reputation may be indirect, there's no question it's there (just ask the thousands of bloggers who are profiting off it) and if you lose it you're screwed. In some way, I felt like Noah was putting that reputation on the line by staying with me.
2. Transparency breeds trust. When someone puts themselves out there for the world to see they're vulnerable. They're saying I'm willing to leave myself open to wounds in order to reap the benefits. Vulnerability is another form of collateral. Putting your cell phone on your website is pretty damn transparent.
3. Go with your gut. Not to get all Gladwellian on your asses, but a big part of trust is built on instincts. When you first meet someone you probably either trust them or you don't. Now they can change that impression, but it's pretty damn difficult. Letting him stay at my apartment seemed like the right thing to do.

I'm sure there are more, but it's getting late and I'm tired. I also hoped to get to how this relates to brands, but I'm going to have to put that off to another day. Unless you all want to help . . .

Update (12/21/06): 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. Not that I wouldn't have accepted either of those.

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