John Hauser, MIT Sloan School of Management
It’s every CEO’s worst nightmare: For whatever reason, the CEO’s company is engulfed in negative publicity that threatens to damage its brand name, harm sales and alienate customers for months or even years to come.
The negative publicity can hit suddenly, seemingly out of the blue, or it can come in relentless waves, over a prolonged period of time, like a series of storms battering a coastal area, one after another. Wells Fargo and United Airlines have both been facing such an onslaught in recent weeks and months.
How does a company respond? How does it go about repairing a damaged brand name and winning back customers?
While I know very little about these particular situations apart from what I’ve read, seen and heard via various media outlets, I know how difficult it is to change consumers’ minds about a company and its products – and how winning back “trust” is easier said than done.
Five years ago, my colleagues – Gui Liberali of the Erasmus School of Economics in Rotterdam and Glen L. Urban at the MIT Sloan School of Management – and I jointly published a study, “Competitive information, trust, brand consideration and sales: Two field experiments.” Here’s what we learned.
Regaining customer trust
Over two years, we closely tracked four marketing field experiments by an American automaker whose brand had suffered from decades of negative publicity over the quality of its products. The experiments focused on company actions to earn back trust.
In one experiment, the automaker provided an opportunity for potential customers to test-drive competitors’ cars so that they might compare them with the company’s own lineup. Another experiment provided an unbiased internet recommendation system to help customers find the car that met their needs, even if that car was not made by the automaker.
Other experiments included customized relationship management and a moderated community to enable customers to speak to one another about all the cars they were considering.
The theory, and it was a good one, was that the new offerings by the automaker were much better than customers perceived them to be. The automaker believed it would win in a fair match-up and set out to enable customers to make the comparison.
Why they succeeded
What we found is that it’s simply not enough to tell consumers that they can and should trust a company. It’s critical to actually prove, again and again, that a company and its products can indeed be trusted – and customers must be provided with tangible, observable proof that a company has changed its ways and the quality of its products.
The automaker’s experiments enhanced trust, which – more importantly – led customers to consider and purchase its cars.
Today, this automaker works to provide competitive information to customers when there is good news and when it is cost-effective to do so. For example, customers are encouraged to test drive cars for longer periods of time. Dealers hold targeted competitive test drives for selected customers, sometimes renting competitive vehicles to make the test drives possible.
For the automaker, establishing genuine, observable trustworthiness wasn’t enough. Skeptical customers, who would not even consider the automaker’s cars, needed to be won over. The company found cost-effective ways, such as targeted marketing campaigns and digital marketing, to encourage these skeptical customers to pay attention and seek information.
The bottom line: There’s promised “trust” and then there’s genuine “trustworthiness.” And the only sure way of getting to that trustworthiness stage is to make genuine internal changes – and then to get customers back into dealership showrooms, in the automaker’s case, or into Wells Fargo bank branches or on to United airplanes. That’s the only way consumers can determine for themselves whether a company and its products are again “trustworthy.”
Winning over skeptics
When customers are skeptical, and even when they are not, it is good marketing for a company with superior products and services to provide competitive information about a company’s products versus its competitors’ products – with all the pluses and minuses involved in making such comparative information available to customers.
If a company has indeed changed and is producing a better-quality product or service, providing competitive information can be an effective way of winning over the highly skeptical customer and creating a much-coveted “virtuous cycle” of trust and loyalty.
I don’t know the details of Wells Fargo’s controversy and marketing plans for the future, or, for that matter, those of United. But if whatever they convey to the public isn’t targeted and backed up by tangible, trustworthy services and products, it probably won’t win back as many customers as desired. In both cases, it is important that the firms listen to customers and provide high-quality services.
Trust is earned over many years by providing to the customer the products and services that fulfill customer needs. Trust is earned by listening to and respecting the customer’s voice.
Trust me on this: Being trustworthy matters.
John Hauser, Professor of Marketing, MIT Sloan School of Management
This article was originally published on The Conversation. Read the original article.