Mutually Exclusive : Profit and Trust?
Sam Jordam, MD of Baber Smith (August 2010)
In our recent Insight Survey, an annual research project conducted with YouGov, we explored consumer trust in brands in the retail and financial services (FS) sectors. The former continues to do well while unsurprisingly the feedback from consumers on FS brands was considerably less enthusiastic. However, the brands that scored well in their respective sectors threw up an interesting result. The survey participants were asked to name up to three brands that they considered to be their ‘most trusted’ in each sector. Amongst people who were a customer of the brand it transpired that M&S, Waitrose and John Lewis were the top three most trusted from retail while The Cooperative Bank, Nationwide, First Direct and Britannia Building Society comfortably stood apart at the top of the tree in FS.
Interestingly then the top seven brands across both sectors that customers said they trusted the most where predominately mutually or at least non-shareholder owned, the too exceptions being M&S and First Direct. Reflecting on these two interlopers it’s fair to suggest that M&S has a fairly comfortable relationship with it’s customers and doesn’t feel like a big commercial corporation, more a middle-class family institution. First Direct on the other hand, a subsidiary of HSBC, has famously found success in positioning itself to customers as more personal and less-corporate.
The Insight Survey clearly shows that, across both sectors, ‘Good Reputation’ is consistently the biggest driver of trust for customers, followed by key factors like ‘Value for Money’ and ‘Quality of Service’. So the unanswered question is perhaps, does the business model drive reputation? Or, is the enhanced reputation of these brands the result of a business model that emphasises good customer value and service more than a shareholder-owned business might? Of course, this all comes at a time when ‘excessive’ profits, bonuses and corporate payouts are under greater public scrutiny than ever. Whatever the dynamics of the cause and effect relationship the brands at the top of our trust survey are different in their approach, in their operational DNA, than the others. At a time of increased scepticism and faltering faith in many brands these companies have an advantage. This alone obviously isn’t enough, they have to know how to make this advantage count to be able to thrive and indeed survive in their highly competitive marketplaces.
Read more about the Insight Survey on our news section or at www.theINSIGHTsurvey.co.uk.