We like to do business with people we _______. When I ask this as a question the answer is almost always a single word – trust. Edelman has created a Trust Barometer. It’s an annual study to examine the impact of trust on businesses.
The most recent survey indicates that trust is down in many important categories. Basically consumers are saying they don’t trust businesses, or governments, to do the right thing.
This same study makes it clear that trust is important. Businesses that earn our trust are often rewarded with stakeholders who are more willing to recommend, to invest, to work for and to buy their products and services.
54% of those surveyed indicated they would be willing to pay more for a product or service from a trusted source.
WHAT ABOUT REPUTATION?
As I was doing the research for this post I discovered the Reputation Institute, an organization that regularly invites thousands of consumers across 15 markets to participate in a study to rank the world’s most 100 reputable companies.
Each company is assigned a score representing the way consumers feel about each company based their perception of that company’s CSR (Corporate Social Responsibility).
These scores are analyzed on seven dimensions of corporate reputation:
- Financial Performance
- Products and Services
Companies with strong reputation scores consistently produce financial results that exceed stand benchmarks, like the S&P index.
THE POWER OF REPUTATION
Of the seven dimensions listed above, three drive reputation:
Here are a few interesting stats based on the survey results.
41% of how people feel about a company is based on their perception of a firm’s corporate social responsibility.
60% of a consumer’s willingness to buy, recommend, work for and invest in a company is driven by perceptions of the company, its reputation
Only 40% by perceptions of the products or services it sells.
These are some pretty sobering statistics. I find that companies tend to spend their resources in the reverse order, focusing on features, benefits and value. I understand, these metrics are typically much easier to track and measure.
So what does all this have to do with customer experience?
Declining trust is creating yet another gap in the customer experience. You can read my thoughts about the other customer experience gap here.
There is an opportunity for firms with strong CSR reputations to create customer experiences that can provide a competitive advantage.
LEVERAGING 3 DIMENSIONS TO DRIVE DIFFERTIATING CSR
How can a business harness the power of the three dimensions that drive CSR behaviors?
It all begins with a single focus on delivering customer value. This focus is guided by a brand’s Vision and Mission. Because these are customer centric, all of their efforts revolve around delivering on the promises in these two very important statements; they serve as the ultimate litmus test for evaluating corporate behavior.
If you have a Vision and Mission statements do they clearly connect your brand’s identity to the customer experience? If not consider revising so they will clearly guide your brand toward making a unique difference in the lives of all your stakeholders.
The corporate ethos that drives great customer experiences also motives organizations to be good citizens. When organizations develop a serving and listening mindset, these attributes naturally carry over into all facets of the brand personality.
Good citizenship is a collaborative effort among all stakeholders. When organizations care about customers, employees, and the rest of their stakeholders, they naturally begin to think differently about their resources.
- Increasingly, stakeholders expect brands to use their resources to address needs in the surrounding community and even the globe. It’s not about creating programs.
- These efforts tend to be unique to each organization and typically, their citizenship grows out of an awareness on the part of a particular group of stakeholders.
If your brand doesn’t currently have specific interests or programs, explore the possibility of causes that might resonate with stakeholders. Find ways to use company resources to address challenges and concerns. This might be as simple as paid time for employees to volunteer for specific causes or perhaps providing expertise or equipment for specific situations.
The new competitive landscape is requiring brands to be agile. Cross functional collaboration and communication are new imperatives. Good citizenship is often the result of organizations that are more open and transparent.
Some organizations, like Zappos, are adopting very unique structures that are the polar opposite of the traditional command and control structures. While these new structures are certainly not for everyone, organizations are finding that agility requires good communication and a willingness to experiment and explore.
For this dimension consider evaluating corporate initiatives in a new way. Begin by asking questions like:
- How could this decision be viewed by our customers?
- Will this direction add to the customer experience? If so how?
- Or, when meeting consider adding an empty chair to symbolize the presence of a customer.
Brands that consistently rank for CSR have cultures that allow associates to flourish. These brands commit resources to train and equip their associates. Once trained and equipped, associates are empowered to serve others.
Studies have shown that cultures that foster happy employees are more profitable and they have less turnover. Brands that have happy employees leave nothing to chance, they are constantly seeking feedback, and most important, they act on the feedback.
If you don’t currently have a feedback mechanism, create one. There are free survey tools that are easy to use and they can be used to effectively gather feedback. Neal Schaffer has written about the role of CEO’s and employee advocacy programs.He describes many benefits beyond the typical role of advocacy programs.
Employees who are happier tend to think more like owners than employees. Happy employees are much more likely to be brand ambassadors. I don’t mean marketing ambassador, though there is a role for that, I am talking about a pride in being part of a brand community.
I believe that a strong CSR reputation is a result rather than a cause. Top CSR firms are good citizens, they govern responsibly and they treat employees with respect. They lead by inspiring rather than managing and controlling.
Brands that practice good corporate citizenship are more likely to build trust, and building trust makes your brand more attractive for investors, employees, and customers.
These brands don’t obsess over who owns the customer experience, they create cultures that value the customer as central to their very existence and as such instill in everyone a sense of responsibility to the customer experience.