The highly respected 2016 Edelman Trust Barometer has just been published. Here’s what it tells us aboutÂ how authentic communications and having a purpose beyond profits can improve the way a business is perceived by its stakeholders.
ItÂ is packed with useful insights into the way in which businesses are perceived around the world, and is a must read for anyone interested in stakeholder engagement, communications and Corporate Social Responsibility or CSR.
Here are some important highlights.
Firstly, 68% of people surveyed reported having bought products or services from companies that exhibited trusted behaviours. 59% recommended trusted businesses to a friend or colleague, and 41% shared positive opinions about them online. Interestingly, 37% of survey respondents said they voluntary paid more to buy from trusted companies and 18% were even motivated to buy shares in those companies.
ThisÂ seems to suggest that trusted businesses can expect to sell more, and at a higher price, than their less trusted rivals – echoingÂ the findings ofÂ this Project ROI report.
Secondly, it shows us the importance of peer-to-peer advocacy. Based on trust, 59% of those surveyed said they’d recommended companies to a friend or colleagueÂ in the last 12 months.Â In fact, peers were the third most trusted group among respondents when asked to rate the credibility of spokespeople, as this chart showsÂ – Boards and their CEOs were less trusted than employees and peers alike. 2 out of 3 of the most used sources of news and information are peer-influenced media (search and social media).
And so, when sharing company information, it’s important to carefully chose the right messenger and the right communications channels.
And, thirdly, according to the report, purpose not only matters to people, but it also influences trust. 8 in 10 survey respondents said CEOs should be personally visible in discussing societal issues. When asked to cite reasons why their trust in business had changed over the last year, 45% of peopleÂ said their trust in business increased becauseÂ itÂ contributes to the greater good, whereasÂ 50% said their trust in business had decreased because of a failure to contribute to the greater good.
People clearly expect businesses to play a positive role in society.
The 2016 Edelman Trust Barometer asked respondents to rank the importance of attributes that build trust in companies, grouped under five broadÂ headings: Integrity, Engagement, Products, Purpose and Operations.
Under Integrity, 51% of people said that ethical business practices are important, and 55% said having transparent and open business practices is important too.
As for Engagement, communicating frequently and honestly on the state of its business was important to 48% of respondents.
When it comes to Purpose, 50% said that working to protect and improve the environment is important to building trust, as is addressing society’s needs in everyday business (45%) and creating programmes that positively impact the local community (44%).
What does it all mean for CSR?
For companiesÂ that take responsible businessÂ and CSRÂ seriously, the 2016 Edelman Trust Barometer findings are clear.
When communicating about your business, it must be authentic. People increasingly demandÂ openness and transparency, and are more likely to listen to their peers or a company’s employees than they are to its leadership team. This has important implications for how businesses engage with stakeholders, and it may make sense to develop different communications strategies and channels for different stakeholder groups ratherÂ than simply having the CEOÂ out in front all the time. Where CEOs do engage, it’s important that they project their personal values, with 79% of respondents saying this is an important factor in building trust in a CEO.
Likewise, the focus on a purpose beyond profits is crucial too. People accept that the primary goal of a business is to make a profit, but they also want businesses to do more about societal, environmental and community impacts.Â The survey also found that 87% of employees in companies engaged in societal issues would recommend their company, its products and services to others compared with just 66% of employees in companies that are not engaged in societal issues – which means that, if you want to drive employee advocacy, having a purpose beyond profits is just as important to your internal stakeholders.
You can access the 2016 Edelman Trust Barometer below.