Trust is the foundation on which brand loyalty and affinity are built. Consistent positive experiences, a brand’s ability to reliably meet or surpass customer expectations and deliver on product or service promises ultimately cultivate that sense of trust. In today’s rapidly evolving marketplace, however, consumer trust has become a rare commodity.
It’s fair to say brands and advertisers are facing what’s been dubbed a “trust recession.” Much like an economic recession, a trust recession is a period of decline in which consumers become increasingly skeptical of brands due to past experiences and a barrage of seemingly conflicting information, according to Mintel.
So, what are a few red flags that could lead to a deterioration in consumer trust?
- Misleading claims: Trust begins to erode when consumers discover that a brand's advertising is misleading. This can occur through the omission of important information or by presenting information in a way that misleads consumers into making purchases they otherwise would not have made. Major brands like Volkswagen and Poppi have faced trust issues due to such practices.
- Bad publicity or ethical missteps: Negative publicity, such as product recalls or unethical practices, can significantly impact consumer trust. This effect is particularly strong among older consumers, who are more likely to avoid brands linked to negative news, according to Mintel. Shein and Boar’s Head are among the brands that have recently weathered this type of trust-deteriorating storm.
- Security concerns: As data security and hacking threats rise, consumers are increasingly concerned. Brands need to show vigilance and maintain a positive track record to reassure customers. The 2016 Equifax data breach stands out as a notorious case, as the company took six weeks to notify customers about the incident.
- Inconsistency and poor customer experiences: Inconsistent product quality or poor customer service can lead to dissatisfaction, resulting in a loss of trust. Southwest Airlines is an example of a brand that is still recovering from the fallout of its 2022 holiday fiasco, which resulted in thousands of canceled flights and left millions of customers stranded and unhappy.
Unfortunately, during a “trust recession,” all brands are under a microscope, facing increased scrutiny from consumers. While the solution for this may seem like a no-brainer — just tell consumers why they can trust you — that approach won’t win hearts and minds. Brands that take a “proof is in the pudding” approach are much more likely to earn consumer trust and all that comes with that. Based on our experience and insights from Mintel, we’ve compiled a few key strategies to prioritize and effectively demonstrate transparency:
- Proactive communication: Lead with truth. Transparent communication hinges on providing all the information — pricing, ingredients, manufacturing processes and even sustainability initiatives — a consumer needs to make a purchasing decision. Brands that openly celebrate their successes with customers take a significant step toward transparency by sharing the goals they aim to achieve. Equally important is the willingness to share failures, as it shows the brand's dedication to continuous improvement and accountability. This approach will win more hearts and minds than hiding behind half-truths or omitting pertinent information.
- Traceability: Consider ways to proactively communicate information about the supply chain, ingredients or production methods to ensure consumers feel informed enough about the brand to make a purchasing decision. Demonstrating ethical practices — both internally and externally — are critical to building and maintaining a positive brand image.
- Open disclosure: Don’t wait for a “gotcha moment” to address mistakes. Being upfront about errors and sharing the steps you plan to take to resolve them and prevent future issues can foster goodwill. This honest approach gives consumers a chance to forgive the brand.
- Involve consumers in the journey: Embrace your consumers and their feedback, as they are vital to your brand's success. Create opportunities for them to interact with your brand and share their thoughts. Listening to and acknowledging this feedback makes consumers feel valued and fosters a sense of trust.
Implementing these strategies, regardless of whether a “trust recession” is happening, can help ease consumer concerns and enhance the credibility of your brand’s messages. While building trust, brand loyalty, and emotional connection may take time, the investment is worthwhile. According to Mintel’s Brand Loyalty 2024 report, over 80% of consumers agree that if they lose trust in a brand, they typically stop purchasing from it. Additionally, a significant 88% of consumers acknowledge that they trust certain brands more than others and are loyal to them due to that established trust. This underscores the importance of transparency, as it allows brands to demonstrate why consumers can rely on them to fulfill their promises.
Mythic creates strategies that drive growth and foster meaningful connections. By blending data, creativity, and deep consumer insights, we help businesses navigate challenges and seize new opportunities. We partner with clients to craft bold, impactful solutions that deliver results in an ever-changing world.
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