As technology becomes more and more entrenched in our lives, the data that feeds this technology is growing rapidly. In the first part of this article, we found that only one in four (27%) consumers understand how companies use their personal information, and 61% feel they’ve lost control over their personal information (up from 46% last year). Meanwhile more than half of those surveyed are concerned about AI’s potential bias.
Therefore, it should come as no surprise that trust matters now more than ever. In fact, trustworthiness is the number one area where customers see a major need for improvement.
Exhibit 1: Customers seek brand renovation
Customers most strongly associate honesty, security and reliability with trust. These are the baseline indicators of trustworthiness, but there are other factors to consider as well, such as transparency, ethics and authenticity. However, 61% of respondents said it’s harder than ever for a company to earn their trust (up from 54% last year). What we read in the news and social media tends to exert significant influence on our perception of a company’s trustworthiness. There’s no shortage of stories about data privacy breaches, corporate corruption, false advertising, anti-trust, misuse and abuse of technology to manipulate consumer behaviour. And let’s face it, with the proliferation of fake news, how do we even discern what to believe?
Companies doing it right
Companies are responding to the crisis in different ways. Ninety percent of customers say how a company acts during a crisis reveals its trustworthiness, and 51% say that they trust a company more because of how it’s responded to this year’s crises.
Exhibit 2: Trust is being forged – or not – with new vigour
Companies like L’Oréal quickly pivoted to produce free hand sanitizers for distribution to hospitals and pharmacies. The global mining company Anglo American provided water and food to South African villages, as well as PPEs to local clinics. Coca Cola Philippines reallocated $3 million in advertising budget to provide assistance to front liners. Grab drivers in Singapore volunteered to transport healthcare workers to and from hospitals. In Salesforce and Microsoft, hourly workers continue to receive pay while offices are closed.
Interestingly, we saw select companies who had to manage a crisis within a crisis, and for these companies, the priority was restoring trust. Take Zoom, for example. Zoom has undeniably benefitted from the sudden and massive shift to remote work. However, its meteoric rise in popularity also exposed several security flaws – making it vulnerable to malicious attacks and an unprecedented level of scrutiny. Zoombombing is one of the things that come to mind when we look back to the defining moments of 2020. That being said, Zoom impressively handled this PR and security nightmare. It swiftly acknowledged the issues, took accountability and provided transparency on what the company was doing to fix them. Zoom has demonstrated that it can be trusted to act quickly and do the right thing when the situation demands. Being put to the test and responding as it did resulted in higher levels of consumer trust compared to before these incidents, if its Q3 financial results are anything to go by.
What is critical to understand is that ‘stakeholder capitalism’ is gaining momentum and critical ground in 2020, and that COVID-19 was the catalyst that placed it at the top of corporate agenda.
Finally, a company’s trustworthiness impacts its bottom line. A large majority of customers (89%) are more loyal to companies that they trust, whereas 65% have stopped buying from companies that did something they consider distrustful.
Ethics is immensely valued
As with trustworthiness, company ethics has grown in importance as well. Majority of customers refuse to buy or have stopped buying from companies whose values don’t align with theirs, and one aspect they look at is how companies use or misuse technology. Many companies use machine learning algorithms, for instance. Are they using it to improve lives or is it being used to exploit customers or as a weapon to spread disinformation?
There is also the matter of equality. Is a company providing everybody with equal rights and access to technology-driven opportunities? As uncertainty around technology replacing humans grows, how is a company preparing and reskilling its workforce to take on the jobs of the future?
During this pandemic, customers have also started evaluating a company’s role in society based on several criteria.
Exhibit 3: Corporate values impact customer acquisition and retention
They look at how a company treats its employees and customers. We’ve read horror stories of companies failing to provide a safe work environment for their exhausted and overworked employees. However, we’ve also heard of companies that quickly mobilised their resources to do contact tracing and COVID-19 testing, ensured employee concerns were addressed through regular forums, and provided allowances for home office setup and child care support. Likewise, there are companies who responded in a similar fashion towards their customers. Several credit card issuers, for instance, offered flexible payment terms and waived late fees and interest. In Malaysia, the major telcos offered 1GB free internet access to support online education and improve productivity.
Customers also noticed whether companies took action against racial and economic injustices. The Black Lives Matter movement and incidents of anti-Asian aggression made us all acutely aware of the systemic racism that continues to destroy the fabric of our societies. The pandemic brutally exposed the economic issues that have now come to the forefront, with the already rich adding to their wealth, while low-income families struggle to make ends meet. Customers looked favourably on companies who came forward to pledge their support for minorities, and committed to diverse and inclusive hiring. There were promises to review policies around compensation and promotion, and reform toxic workplace cultures. Some brands like Quaker Oats even changed their product packaging to eliminate racial discrimination. Whether all these actions will result in lasting change remains to be seen, but make no mistake – companies are being held to a higher standard and customers need to know where they stand. Being a spectator in this war on inequality is not an option.
Now, we know that wherever companies operate, they impact the livelihood and quality of life of the people in those communities. And since they have plenty to gain, 80% of customers think companies are responsible for giving back to the communities where they do business, especially in times of crisis. Simply put, community involvement is a clear reflection of a company’s values. Good examples include Starbucks who gave away free beverages to healthcare workers. BHP in Australia put up a $50 million fund for essential services and support for indigenous communities. Nestle organised local relief efforts to donate to food banks, and Verizon donated $2.5 million to a fund for the recovery of small businesses.
Customers have also come to demand climate action from companies. Our world’s greatest challenge and opportunity is fighting climate change which is threatening our very existence. Seventy eight percent of customers think companies are responsible for taking steps to reduce climate change, and close to that number also say that a company’s sustainability practices matter more than they did a year ago. During Verge 20 last October, over 10,000 leaders across 86 countries came together online to connect, learn and share how we can all accelerate the clean economy. What companies like Unilever, Google, Shell and UPS are doing around regenerative practices, decarbonisation and creating a circular economy is impressive.
Customers most strongly associate honesty, security and reliability with trust. These are the baseline indicators of trustworthiness, but there are other factors to consider as well, such as transparency, ethics and authenticity.
What is critical to understand from all these examples is that stakeholder capitalism is gaining momentum and critical ground in 2020, and that COVID-19 was the catalyst that placed it at the top of corporate agenda.
Customers can drive change
We are transitioning to the age of the conscious customer, with 55% of customers believing that they have the power to influence change in companies. For example, values-driven consumers, many of whom are Millenials and Gen Zers are changing the food industry. These cohorts are changing their buying habits and are willing to pay more for fair trade and eco-friendly products. Let’s take Walmart as an example. Their research told them that their consumers care about transparency and how their food is sourced. This led Walmart to make changes to ensure that the food they carry on their shelves is traceable. Last September, they made a much bigger commitment to become a regenerative company with a goal to protect, restore and conserve 50 million acres of land and 1 million square miles of ocean by 2023.
Exhibit 4: Consumers recognise their power to influence change
As consumers and business buyers, we have the power to influence and change how brands operate their businesses. We can demand for more transparency on how our personal information is being used, insist on a better customer experience, and hold them accountable to serving the interests of all their stakeholders – their employees, customers, suppliers, communities and our planet. Creating a better society and a better planet is all of our responsibility, and in a digitally connected world, customers are the trailblazers who are driving this change.