HONESTY remains the best policy to gain customer trust and shore up share prices, according to the CEO of the company that created the “trust barometer.”
“You may have a bad PR [public relations] but having an honest leader telling people what they’re really doing so that the bad things won’t happen again evokes trust because it shows the leadership is on top of what’s happening,” Bob Grove of Edelman told the BusinessMirror in an interview late Wednesday.
Grove, managing director for Southeast Asia of the consultancy firm Edelman, spoke on trust and the global PR industry at the 18th National PR Congress on Thursday, where he emphasized the importance of honesty and transparency in running a business.
Citing studies, Grove said share prices of companies that were able to regain consumer trust from a failed product recovered when their leaders immediately apologized to the public, explained the situation and bared the steps to rectify.
“Those that showed decline in share prices were companies that were slow to react, the leadership wasn’t involved
and didn’t show the whole story,” he said.
Grove explained that the market punishes such companies because their actions after a crisis suggest the strength—or weakness—of its leaders. “They always ask, ‘Should I trust my money on these guys?’” he said.
Just recently, Edelman’s “trust barometer” showed business in the United States suffering a decline in trust from 54 percent last year to 46 percent this year.
But, according to Grove, businesses in Southeast Asian countries, which were excluded in the survey, are considered highly trusted. Grove, who has spent time in Asia since 1993, cited companies in South Korea as having credibility among consumers even outside its territory.
This is a feat in itself, he said, since high levels of trust are usually given to businesses mostly from Europe, like Germany and Sweden.
Technology companies consistently scored high levels of trust, whether in the Edelman’s poll or the recently released Trust Index by local PR firm EON Inc.
“That’s the key differentiator today, technology,” said Grove, who added that the advent of social media and synchronicity of traditional and online media give consumers the power to make or break a company.
He said a consumer can become a company’s spokesman via the online social media and mobile phones.
“We’ve discovered that trusted companies sold more product than distrusted companies. Eighty percent of consumers won’t buy products and services from companies they don’t trust, whereas 70 percent will buy in a company they trust. It’s now a reality,” he said.
In times of crisis, he said companies should act quickly—“within the hour”—adding that “companies that weren’t able to recover were the companies that had leaders not communicating fast and honestly.”
IN PHOTO -- PR CONGRESS OPENS - Bob Grove, managing director of Edelman Southeast Asia, gives a presentation at the opening of the 18th National PR Congress on Thursday. --ROY DOMINGO
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