In brand we trust
by Richard Broadbent (6 July 2006)
A major reason why businesses invest in branding is to develop a bond of trust between companies and consumers. If a consumer trusts the quality and reliability of a product carrying a particular brand it is likely that they will be willing to use it again, even if it costs slightly more than the competition. A trusting consumer will also be less likely to desert the brand in times of economic uncertainty, an essential part of reducing the price elasticity of a company’s goods.
The best way for businesses to build trust is to always provide high quality so that, by your own reliability, you make yourself indispensable to consumers. A good brand image used in conjunction with this can then turn indispensability into desirability. For example, Doctor Martin boots became extremely popular amongst consumers due to their durability and quality. Branding was then directed at interpreting this ‘hard’ image of ‘Doc Martin’ boots into a fashion statement, making the boots the brand leader in stylish durable footwear, despite the presence of similar quality shoes in the market. This marriage of high quality and successful branding helped make ‘Doc Martin’ a household name.
But trust, once gained, can be easily lost. When this happens it can be very hard for the brand to be successfully resurrected. One could not, for example, use the brand name ‘Enron’ anymore, despite its huge success in the late 1990s. Likewise, Italy’s Parmalat may continue beyond administration, however many will have lost trust in the brand after Italian prosecutors accused the milk company of an accounting scandal which left millions of shareholders out of pocket, as Parmalat’s €1.8bn market value became worthless as the company went bankrupt.
Trust can be reclaimed, although the process may be long and hard. The recent tribulations of Martha Stewart, one of America’s most successful business women, is a case in point. Despite a five month stretch in prison due to her involvement in the ImClone scandal, Martha Stewart has bounced back by rebuilding her interior design and homemaking empire, and using the negative press she received during her trial to showcase her hardnosed business skills in her own spin-off of The Apprentice and a book on business management entitled The Martha Rules. It is this open and dynamic attitude towards her incarceration which has made people begin to trust her brand again.
Whilst Martha Stewart’s entrepreneurial rehabilitation has been successful, other types of business may find the transition much harder. Take, for example, the current state of Italy’s premier football league, Serie A. If found guilty of match-fixing, the footballing giant Juventus may face relegation to Italy’s third division and lose their two most recent Italian titles, whilst AC Milan, Lazio and Fiorentina may be demoted to the second division. The ramifications of this humiliation will go far beyond the loss of Champions League football next season. Already there has been a movement of world class players away from these clubs, and this, plus the loss of television revenue and sponsorship from playing in the top league, will slash the clubs’ money-making capability. Already Juventus has lost 40% of its value since May 2006 and is now worth around £112 million, £75 million less than it started the year with. Whilst die-hard fans will stay faithful to their teams should the worst happen, the marketability of Juventus and the other teams who stand accused looks bleak, as their names will be synonymous with scandal in a sport that prides itself on a sense of fair play.
A brand which people trust is a brand that can weather any financial storm. Concentrate on providing excellence and the best service that you can for the people who use you. It is this, not dubious accounting or match-fixing, which will keep consumers coming back for more.
