Trust isn’t just a warm fuzzy feeling. For companies that know how to add trust to their brand attributes, they can see their work show up in a graph, a trendline, and an upside in performance.
Trusted brands and the stock market
Each year, Fortune magazine releases a list of various business rankings, including the Fortune 100, which many of us rely on as the 100 largest public and privately-held companies in the U.
S. ranked according to market cap and valuation.In 2016, SurveyMonkey sorted the Fortune 100 in a different way: from highest to lowest in terms of consumer “trust” metrics. To follow that thread, my team measured the difference in stock-price performance between the S&P 500 and the Fortune 100 Most Trusted. We thought that there might be a performance difference between those two cohorts. We were right but what we found was even more interesting.
I was shocked to learn of a massive difference in performance between the top 15 and the bottom 15 of the Fortune 100 most-trusted companies. The top 15 Fortune 100 most-trusted performed at 26 percent greater the bottom 15 Fortune?!
Wow. Wait. We crunched the numbers again. Yep. 26 percent higher.
This stock performance happened at the same time that Edelman’s 2016 Trust Barometer showed 50 percent of respondents have lost trust in businesses because of their lack of contributions to “society’s greater good,” and 62 percent of earned-brand respondents said they will not buy from a brand that fails to meet its societal obligations.
And in 2017, it’s not getting any more trustworthy out there. The 2017 Edelman Trust Index reports that customer trust is now “imploding” after a year of “unimaginable upheaval.
”Trusted brands and politics
In these politically charged times, consumers now expect corporations and businesses to take a firm stand and act on what they believe in. Conscious Consumers want to know, not just how brands handle their business decisions, but also where they put their socio-political influence.
Global Strategy Group reported in Forbes that 56 percent of Americans believe corporations should engage in dialogue surrounding controversial social-political issues.
But speaking up on controversial issues has risks. Another study quoted in the same Forbes article says 8.1 percent of Americans are more likely to purchase from a company that shares their opinions and nearly equally, but 8.4 percent are less likely to purchase from a company that doesn’t share their opinions. That’s a big 16 percent swing. But there’s more to this when it’s broken down by age groups.
Middle-aged Americans (36 to 55) are the least likely to consider corporate social advocacy in their purchasing decisions, regardless of whether or not it aligns with their own beliefs. Put simply, when consumers hit their late 30s, they get set in their ways for a…
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