07.05.11 19:20 Age: 1 yrs
When trust becomes a brand issue
By: Monika Evers
Even though The United States still represents a massive consumer market, brand USA is losing one of its greatest intangible assets…trust.
When I was a counsellor for the Italian Chamber of Commerce in Melbourne some ten years ago it was brought to our attention that in the years to come the combined strength of the business that was taking place in Europe would allow the Euro to take over the American Dollar as the preferred global currency by 2020.
While the GFC did impact the liquidity of a few European countries like Iceland, Hungary and Greece the brand damage that US trust swindle did to the mighty “greenback” was just as enormous as market trends are now showing.
In this Evers Report I want to explore the notion that business and consumer markets outside of the US are talking with their feet and brand USA is starting to get left on shelf. What is required by the US is not a not just an elaborate PR exercise but a major rethink in its values.
What started me on this wave of thought recently was that one of the fastest growing Australian websites, now in the top 120,000 of the planet, according to Alexa the internet rating organisation, is calculating everything on their website in Euros not USD. It is doing this even though it is a global business with branches into Europe and the USA.
Customer trends just released from the UK are showing that “fair trade”, “local” and “cruelty free” are the rising factors in food purchasing trends by customers in UK, Europe and Canada. While, “organic” is lessening as a trend in some sectors, it is still strong. Cheapest is no longer the automatic decider. This is according the latest research out of Cambridge University.
You need to think about this a little deeper. “Fair trade,” “local’ and “animal free” as trends could be seen also as a backlash against US farming practices. Practices that have seen individual, local farming being taken to a mass production level. Monoculture farming, GMO crops and even growing animals behind closed doors is now part of the accepted American way of doing “farm business”. Joel Salatin is the exception in the US farming industry not the rule. Even “organic” under this light, can be seen as a trust issue about the safe use of pesticides and herbicides in food crops.
So when consumers start “going green”, choosing “organic”, “free trade” and “local” these are signs of a cultural values shift. The big motivator behind these trends is a lack of trust in the mass market farming systems. Unfortunately, the champion of these entrenched farming practices has for the most part been done under brand USA.
The trend against brand USA was also reflected in the unrelenting support for Julian Assange and Wikileaks. Wikileaks was like a modern David and Goliath story. It produced USA’s first, untouchable, finger-pointer. Julian defended by a public outcry that held him safe from the US government. It also showed that Brand USA no longer held the respect or the leverage in the outside world. This to me was even more interesting.
Just this week we also saw Osama’s death celebrated by Obama and Americans alike. In my cynicism, perhaps I have watched too many reality shows or read too many exposes, I just didn’t believe it was true. Too many lies, too many scandals to believe it couldn’t happen again. What am I talking about?...a cover-up…a lie…a deception. Is that really Obama’s body lying at the bottom of the ocean or was it just a look alike, a fake or even another person altogether. That is where I now find myself, standing in disbelief, unable to join into the celebrations of the death of an enemy of one of our closest trading partners. That was my wake up call to how hardened I had become to my listening around USA.
This has a lot to do with the way that corporations are now being set up across the world. CSR should be more than just looking good for the media. It covers off on the behaviour of every individual involved in the organisation, department or business. It is one of the things clients discover when they do the “Spinach Test” with me. Your brand lives and dies by the action of every last person in the business, the suppliers you use, who you associate with. The truth of the matter is that the public has become cynical and not trusting of big business especially American big business and it will have more ramifications in the future if these issues of trust are not addressed.
From a big business perspective it is simply not enough to “assess risk” based on the fiscal ramifications, if you are not factoring in the intangible factor called “trust”. Every US based business when it does a risk assessment on a business “opportunity” can’t just assess risk according to the company’s bottom line from a fiscal perspective, when ramifications of that risk could impact the country of origins brand as well. That too needs to factored into all risk assessments.
I personally feel that the US government has not done enough to protect the people’s brand especially after the GFC. They are no longer operating in an insular US marketplace. Brand USA needs to maintain its standing in a global social marketplace. Wikileaks was a testament to its lack of standing. Wikileaks was a modern David and Goliath story around trust and the majority of the public sided with Wikileaks against the USA. It was a protest vote on many levels.
Recently even brand Japan took an immense brand dump as a result of its poorly enacted nuclear program. This time it will be the government affecting the sales of its industry.
Trust in markets is hard to gain. Once broken it spells a death to any brand and that include countries. Brand USA needs a brand makeover and it doesn’t have a Tony Abbott or a royal family like the UK to come to the rescue.
That rescue will have to come from the same mindset that brought it into disrepute, corporate and business America. Funnily enough if you have watched “The Social Network” the story of Facebook, you will see the kind of turnaround in thinking required. That story is ultimately a story about the restoration of Trust. It’s a big pill to swallow but then again that is what builds character. Johnson and Johnson once did. Does today’s Corporate America have the character to choose guardianship over profit again? We shall have to sit back and see.
