A Crisis of Trust: Effective Marketing Starts with Effective Branding - Essay Example

? A Crisis of Trust In a world of extreme corporate development, consumer trust can be the definition of a brand. For a brand, building and maintaining the trust of consumers means everything; and at the same time losing the trust of the consumers can make all the difference in the business world. After the recession hit, trust has been the key in holding on to one’s place in the market. The post-recession world is one where trust delivered by the company has been ensuring brand loyalty by the consumers. But from time to time, high profile companies and organizations such as Google, Barclays, and Starbucks are surrounded by controversies not only damaging their image but also their relationship with their consumers. Controversies only find their way to the organization when the company fails to provide excellent customer service and starts rating their profits above their customers. Businesses and markets rely on the fundamental entity of trust to demonstrate stability and long term profitability. Barclays Plc. and LIBOR Recently one such example of rigged trust was seen with Barclays LIBOR scandal. Barclays is the 2nd largest bank in the United Kingdom and the 15th largest in the world. Barclays has established a strong reputation for itself over the years. But recently it became part of a controversy that has resulted not only in the resignation of its chief executive (Zhong, 2012) but also a fine of ?290 million (Bolger, 2012). Barclays plc suffered a serious blow to its reputation when it was found involved in lying about its LIBOR (London Inter Bank Offered Rates) rates. This resulted in Barclays illegally and unethically ending up with their consumer’s money in their pockets. The LIBOR rates that were submitted by the bank were purposefully kept low to portray the strong position of the bank during the financial crisis, which resulted in bringing in more money for the bank (Zhong, 2012). The LIBOR scandal damaged Barclays’ image severely, which may last well into the future. YouGov’s Brand Index score shows that after the LIBOR fixing scandal, Barclays’ reputation fell from +5 to -40, by reputation the index implies the extent to which people might feel embarrassment or pride in working for an organization (Rowe, 2012). As Nick Cooper of Millward Brown believes, ‘The situation for Barclays is incredibly serious; it has turned Barclays from being the hunter into potentially being the prey. That is a huge and very rapid turnaround. It would be a crying shame if Barclays disappeared but a lot of consumer trust in the brand has been lost’, (2012). In YouGov’s August 2012 poll, 17% of Barclay’s customers are considering switching their service (Rowe, 2012). Google Privacy Issues and Shattered Trust Ever since Google has been the leading search engine of the world, it has also been closely followed by issues in its privacy policy and how it handles its customer’s information and data. It is surrounded by privacy concerns in most of its products and services that it offers. A survey was recently conducted, which interviewed 1,317 people. 57% of the people were of the view that the Google Street View service was an intrusion in the private lives of the laymen (Do you know who’s watching you?, 2012). Consumers in this time of awareness are quite accustomed to their data being collected and used, but if the company does not follow adequate rules and regulations with regard to privacy management, the consumer is more than likely to show lack of trust and leave the use of that service altogether. Google has been encountering a number of privacy scandals for some time. According to the 2012 YouGov Brand Index, Google has been replaced by Amazon as the top Internet brand in Britain, due to its privacy controversies (‘Google’s “on Wane”’, 2012). Google, due to its flawed privacy policy, may be subjected to fine by the European Union as it has not fixed its privacy policy as per the CNIL request, and the EU has considered Google’s response to the request as ‘unsatisfactory’ (Bodoni and Smith, 2012). Unsatisfactory protection of data by the organization has led many to switch the service completely and choose other search engines on the Web. Starbucks and a Chain of Controversies Starbucks has been surrounded by a number of controversies during 2012, leading to a breakdown of public trust and thus damaging its reputation. Earlier this year Starbucks was involved in the ‘insect dye’ controversy. Starbucks has been using the extract of dried cochineal bugs to colour its strawberry frappuccinos pink, which has been a source of worry for a wide range of Starbucks’ customers such as vegans (Nader, 2012), Muslims, and Jews. Although Starbucks has defended its choice of using the insect food color, due to intense criticism it has also pointed to the possible use of alternatives (Kelly, 2012). YouGov found out that after the carmine controversy the brand index score for coffee drinkers fell from 42 to 31 and among general public it fell from 18 to 10, and though improved has not reached the previous score yet (Marzilli, 2012). According to the article ‘Starbucks Near Buddhist Temple Triggers Debate’ (2012), Starbucks has also been under the heat due to the Starbucks outlet in China being closed to a Buddhist temple. In early November the Starbucks chain was again surrounded by protests when it was revealed that the chain had paid no corporat tax for the past three years in the United Kingdom, and for which the company’s chief financial officer had been summoned in front of a committee to explain its actions (Neville and Malik, 2012). After the tax avoidance controversy, the Starbucks brand index buzz score hit -28.6 and it does not seem to be recovering as normally such scores recover with brands (Murphy, 2012). Excellence in Service Strategies and Maintaining Trust Whenever an organization or company is engulfed in a controversy, it seldom recovers completely from it, for customers can be forgiving about anything but not a broken trust. The thing that ensures brand loyalty the most is trust. If a company is not providing a customer with excellent services and products, they are very likely to switch to the one who is offering better, even though they might be expensive. Providing excellent service by the companies can lead to maintaining the trust of the customer, and trust guarantees customer satisfaction. ‘Underpinning Theory’ (2012) purports a strong base for the organization not only in the way the organization is led but also how it handles its customers and employees. When changes occur at the base of the organization and a strong base and core are formed, then naturally customer trust will start resulting from the excellence that will be observed in the service strategies that will be adopted. When the company adopts good practices, they will be reflected in their dealings very clearly. Strong management, quality products, and flawless quality control at the production units can ensure excellent customer services. In the competitive world of today, there are numerous versions of a product that are available, and it takes a whole lot of time and hard work to develop a trust relation with the consumer. Consumers have many options available regarding their choice of products, and if a company or product fails to come up to their standards, they will let go it. There are specific strategies that can be employed by organizations and companies that will lead them to develop and maintain a trusting relation with their customers. 1. Customer Focused Policy Being customer focused for an organization can be very critical in the producer-consumer trust relationship. When an organization is customer focused, it bases all its services, products, and promotions around the demands of its customers. The organization conducts extensive research and tries to meet all the needs and demands of the customer. Even the policies of such organizations have their base in customer focus. Having customer focus for an organization can determine high class service by the organization. Such organizations keep customers at the core of their every decision (Douglas, 2008). Being customer focused also provides a goal and direction for the organization, its management and its employees, thus giving them a purpose to deliver. Having customer focus in an organization leads to building trust of the customers. The customers can look up to the company for having their need delivered not only in terms of quality of the products but also the service that is provided. Once trust has been gained by the organization, such customers turn out to be extremely brand loyal. USPS is an example of a customer focused company which delivers as per the customer needs. USPS has a huge consumer base. Customers prefer the USPS service to other postal services because they trust their packages to be delivered on time and unharmed. Such organizations depend a lot on customer feedback. Whenever a product or service is launched, the organization immediately seeks what kind of response the product or service is getting from the customers. If the service fails to impress the customer, necessary changes and modifications are made to it. 2. Managing Expectations Management of expectations is another major aspect in gaining trust of the customer. Expectations arise from previous experience when the organization or the company delivers according to what the customer has come to expect of them, this can increase the trust that the customer has towards the organization. Humans have their habits based on patterns and do not like to change loyalty unless they really have to (Starak, 2011). Customers in the modern world have come to expect very highly of the services and products they receive and want, and can be disappointed easily in the face of non-compliance with their expectations. Like in the example stated above, customers trust Google Inc. to protect their personal information and use it in a proper and purposeful manner, but the advent of the new privacy policy in March 2012 lead to the customers being disappointed with Google, resulting in the brand being replaced by others such as Bing and Amazon in no time. Even the loss of the topmost spot to the second highest can be very damaging for the reputation of worldwide businesses such as Google Inc. Starbucks faced such a crisis when it experienced outrage by its vegan, Muslim and Jewish customers in relation to its using cochineal dye in its products. The company is supposed to keep track of its customer’s expectations, preferences and needs while providing for them. Starbucks customers were so disappointed in them that according to the YouGov Brand index buzz score, their ranking of -16.4 has still not recovered to its previous high. When the expectation management is strong at the core, the resultant trust will increase the reputation of the brand as well as profits. Managing expectations is not only about avoiding a bad name and losses but also about availing the opportunity that the market offers, and can be utilized to the full by exceeding expectations of the customers (Starak, 2011). When an organization succeeds in exceeding expectations of the customers, they become highly motivated to keep up the relation with the company. But at the same time it puts a huge responsibility on the shoulders of the company to keep up with its track record of managing and exceeding expectations. 3. Relationship Marketing As the word implies, relationship marketing means getting to know your customer and then developing and maintaining a relationship on the basis of that knowledge. It means turning the customer-producer contact into a relationship by caring for the customer and appreciating their customership (‘Relationship marketing & customer loyalty’, 2012). Companies can keep a database of their most regular customers and conduct surveys to know about their likes, dislikes, and preferences. When customers realize that the company they are buying from is taking them seriously and cares for them, they will not only display high levels of trust but also loyalty towards the company. Relationship marketing proves to be highly beneficial and trust building. Relationship marketing really helps in the retention of customers so much that many prefer to call it as customer relationship management (‘Relationship marketing & customer loyalty’, 2012). Relationship marketing leads to direct marketing by the customer. When a customer encounters a gesture by the company that is beyond the realm of normal customer-retailer relationship, it is referred to as relationship marketing. When a company remembers a customer’s birthday, or provides free products after a certain number of purchases, it becomes an example of relationship marketing. For example, Starbucks offers its regular customers a free coffee after every 15 purchases of coffee, and also provides special packages for customer birthdays (Ruiz, 2012). 4. Effective Brand Marketing Effective brand marketing leads to ensuring the trust of the customer. When the brand is effectively marketed to the customer, the customer has no delusions about what he will be buying and receiving, thus building trust with the company. But brand marketing should be very delicately monitored, for just to increase the popularity of the brand, exaggerating can set the hopes of the customer really high and thus lead to a breakdown of trust, which can prove really detrimental for the image of the company. For effective brand marketing, the marketing message needs to be worded clearly, emotionally connecting, motivating, targeting customer loyalty, and showing the credibility of the business (DiFrisco, 2012). Emotionally connecting messages are easy to remember and leave a lasting impression of the product. Marketing that targets customer loyalty and business credibility is motivating to the customer, and the customer feels proud to be a part of such producer-consumer relationship. Using different media such as print, Internet, and television for the purpose of marketing can also help reach maximum audience and relay the message. When the message is constructed so that it conveys the meaning clearly and with no ambiguity, then it does not create any kind of confusion or misunderstanding with the customer, otherwise it can be considered as lying and cheating by the customer. As for example, when Starbucks started using cochineal extract dye in its frappuccinos, it should have conveyed this while marketing the brand. Not only would it have been ethical but also would have preserved the trust and values of its customers who refrain from the usage of such things in their diet, thus leading to a higher brand loyalty from its customers. Customers are becoming more intelligent day by day. They are aware of what demands they have from the companies that they are buying from. In the long journey of producer-consumer relationship, trust means the making or breaking of a business. In a world where everyone is more focused on making more and more money, very few organizations and corporations seem focused on catering to the trust factor. Building and maintaining the trust of the customer are not only beneficial for the customer but also benefit the organization more. The trust of a consumer means a long term relationship with the company and marketing by word of mouth. Man by nature likes to trust and be trusted. Amid this crisis of trust, organizations that value trust and respect from their customers ensue profitability well into the future. References Bodoni, S. and Smith, H., 2012. Google may face fines in EU unless it fixes privacy issues. Bloomberg. Available at: http://www.bloomberg.com/news/2012-10-16/google-may-face-fines-in-eu-unless-it-fixes-privacy-issues-1-.html (Accessed December 29, 2012). Bolger, M., 2012. Bank brands bust up. The Marketer. Available at: http://www.themarketer.co.uk/trends/bank-brands-bust-up/ (Accessed December 29, 2012). 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