If you work in the automotive sector then you’ll be heartened to read the 2011 Edelman Trust Barometer, the company’s 11th annual research study into the trust and credibility of businesses around the world. For 2011 Automotive climbs to become the 2nd most trusted industry sector, just behind Technology which retained the No.1 spot for a second year in a row.
Much has happened in this sector during the past 12 months, which has been through one of its darkest periods as the global financial meltdown more than halved sales for some manufacturers and in some cases even more.
General Motors who until 2008 (and the previous 77 years) was the largest car maker in the world, reached out for bankruptcy protection and was bailed out together with Chrysler by the US government. Ford fared slightly better, but still turned to an emergency line of credit to stay afloat. However in November, GM posted the largest initial public offering (IPO) in history, at $23.1 billion and according to the Edelman barometer, “earned back half of the trust it had lost in 2009.”
But what does this all mean, and how can these positive vibes be sustained?
Trust is not the same thing as truth
The simple reality of doing business makes telling the truth an unrealistic proposition, in a competitive marketplace information may correlate directly with competitive advantage and therefore some companies feel they need to control the conversation across their organisation and ensure it’s as generic as possible. Communication is sometimes seen as a necessary evil rather than a tool to be wielded effectively.
However trust is born from a sense of congruity – put simply, ‘saying what you will do and then doing what you say’. Transparency is another term that’s sometimes overused, but again it doesn’t mean opening the doors and revealing every secret.
In reality though, many organisations are realising that it’s impossible to control the conversations of every employee, instead it’s far more realistic to foster and maintain a consistent spirit and tone, rather than the actual words that are written or spoken.
Managing this conversation is increasingly reliant on spokespersons, experts and leaders sifting through the media jumble and synthesising a truth that people can then take and further validate. It is interesting to note from Edelman’s report that “multiple voices” are now seen as the best way of communicating as CEOs, 3rd parties, company executives, and industry experts all have a role to play.
Trust comes from corroboration
A company which hides behind the veil of the one-dimensional spokesperson will lose its personality and it’s this personality that customers relate to. As a Consultancy Director with Pricewaterhouse Coopers back in the mid-’90s we developed a process which examined every aspect which drives a company’s shareholder value, and the most significant factor was that of revealing sufficient information to enable customers and investors to validate what a company is saying.
Edelman’s research shows that a company’s reputation with its customers depends on 3-5 sources of information corroborating each story, but the most interesting finding was that trust in Western countries was declining relative to that in Developing countries – one of the characteristics which differentiate the two markets is the far greater choice available to us here in the USA and Europe, but there’s also an over-abundance of information which can quickly confuse and fatigue an audience.
Social media provides the means to convey a personality
The automotive sector has really embraced social media as a means of sustaining a relationship with its car buyers – Ford, who had been one of the biggest spenders on advertising turned away from above-the-line tactics and embraced social media, bringing on board Scott Monty who has transformed Ford’s dialogue with its customers and engaged many thousands in the most interactive campaigns of 2010.
Other brands worthy of note include Volkswagen and MINI, both of whom are using social media as a means to build greater trust, loyalty and credibility with their customers.
Hybrid motoring – the opposite of corporate greed?
We are in the midst of the most profligate period in recent history, the banking industry has been responsible for almost bankrupting every major government, yet Goldman Sachs will be paying out an average bonus of £269,000 for each employee and cities in Greece, Tunisia and now Egypt have been gripped by riots as ordinary citizens rebel against what they see as wealthy companies and governments getting richer.
A further key reason behind automotive’s rise in the trust index can be explained by the increasing move towards green, environmentally conscious and hybrid motoring. Car makers have cleverly positioned hybrid cars as being a proactive response to society, building something sustainable for future generations and its Toyota/Lexus who have been at the forefront of this momentum.
This has never been more evident than with last year’s widely criticised “unintended acceleration” problem, which led to the recall of nearly 4 million vehicles worldwide amidst a media frenzy that seemed to have little purpose other than to destroy Toyota’s reputation. Despite the efforts of some news agencies, a poll of American consumers thereafter (by Rasmussen) found that 59% of consumers viewed Toyota positively, whilst 22% viewed Toyota very favourably.
This can partly be explained by the very public apology of Toyota’s President, Akio Toyoda, who said at the time, “When consumers purchase a Toyota, they are not simply purchasing a car, truck or van. They are placing their trust in our company. The past few weeks, however, have made clear that Toyota has not lived up to the high standards we set for ourselves. More important, we have not lived up to the high standards you have come to expect from us. I am deeply disappointed by that and apologize. As the president of Toyota, I take personal responsibility. That is why I am personally leading the effort to restore trust in our word and in our products. ”
Stirring stuff, but perhaps the other reason for consumers remaining positive and trusting Toyota is because of their dominant position as the leading global provider of hybrid cars and thererfore its identity as a symbol of environmental and social consciousness.
Edelman go on to describe this phenomenon by their ‘trust triangle’ which is based on the expectation that trust is built when companies act collaboratively to benefit society, not just its shareholders. 15 years ago when we were building reputation->value models, transparency was at the top of the list whilst society and the environment were in the lower quartile. Now it seems businesses must build strategies which bring value to both investors and society.
The automotive sector is in a position to reap more benefit from this transformation in trust than any other sector – it has been forced into greater transparency by the recent financial crisis, has embraced social media as a more effective medium for sustained customer relationships and offers the greatest potential for every person to contribute to the environment and society by embracing cleaner and more efficient methods of transport.
Clearly reaching No.2 in Edelman’s trusted industry sector league is just the beginning, and automotive should be aiming for the top spot over the next couple of years.
Source: all data and illustrations obtained from 2011 Edelman Trust Barometer Executive Summary, which you can obtain by visiting their dedicated site.