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Annual Trust Barometer -- the lessons for Australian business.

Guest post by: Graeme Smith

Article Overview: Every year the world's largest PR firm conducts a significant study of trust and credibility. The 2009 Edelman Trust Barometer for the first time includes Australia. 74% of Australians surveyed trust companies less than a year ago -- 4th highest of 20 countries and above the global response of 62%. Only 39% of Australians trust companies to do what is right; much less than in all of our trading partners. Global response was 49%. 53% of Australians trust government to do what is right, well above their trust of Australian business, and the global figure of 44%. "This year's Trust Barometer leaves no doubt there are tangible consequences for businesses that gain -- or lack -- the trust of their stakeholders. Trust influences consumer spending, corporate reputation, and a company's ability to navigate regulatory environment."

Annual Trust Barometer -- the lessons for Australian business.

Every year the world's largest PR firm, Edelman , conducts a significant study of trust and credibility. The 2009 Edelman Trust Barometer is the firm's 10^th, and for the first time includes Australia.

The interviewees for the 2009 survey are college educated with household income in the top quartile and report significant media consumption and engagement in business news.

Three of the most noteworthy findings are:-

1.% who trust companies less.

When asked whether they trusted companies more or less than the same time last year, the Global response was 62% trusted less, and alarmingly Australia was in 4^th place among the 20 countries surveyed at 74%.

While the Global high percentage who trust companies less is not unexpected considering the GFC, it is alarming that in a country which avoided the high profile corporate collapses, Australian consumers have lost their trust in local business to the extent they have.

2. % who trust business to do what is right.

The US response to the question of what % of consumers trust business to do what

is right, was the lowest ever recorded at 38%. Lower even than 2002 following

Enron and the dot-com bust.

The 2009 figure for Australia is marginally higher at 39%, well below the Global

average of 49%.

Of most concern is the comparison with the response to this question by Australia's trade partners - in China 71%, Brazil 69%, Indonesia 68%, India 65% trust business in their own country to do what is right.

Australian businesses are asking their offshore customers in these growing export markets to trust them to do what is right, but 61% of the consumers who must be considered to best understand Australian businesses have declared they do not trust them.

3. How much do you trust government to do what is right?

The Global response to this question increased marginally from 43% to 44% who declared they trust their governments to do what is right.

The Australian figure was among the higher scores at 53%

For Australian business leaders, they need to confront the fact that Australian consumers have significantly more trust in government at 53% than they do in business at 39%. In 13 of the 20 markets surveyed, business is more trusted than government.

When you consider our politicians consistently rank towards the bottom of every trustworthiness poll, Australian business has a serious issue to address with their stakeholders, which includes the general public.

Most trusted industries.

Figures for the most trusted industries are not separately published for the 20 countries surveyed, but globally Technology and Health Care are the most trusted at around 70%, with Banks, Media and Insurance the least trusted industries at less than 50%.

Most trusted sources.

Again only Global figures are available from the survey, but the results do pose some interesting questions for Australian business on two fronts.

Firstly as credible sources of information about a company, Conversations with friends and peers, and Conversations with company employees rank highly, and above TV and newspaper coverage, search engines and web portals. Well down the list of credible sources come CEO speech, corporate communications and business blogs. Corporate or product advertising is the least credible source.

The second issue to emerge from the question on credibility of sources is that consumers report they need to hear the same message from a number of sources, nominated as 3 to 5, before credibility is assured.

The Business Case for Trust.

Edelman reported "This year's Trust Barometer leaves no doubt that there are tangible consequences for businesses that gain - or lack - the trust of their stakeholders. Trust influences consumer spending, corporate reputation, and a company's ability to navigate the regulatory environment."

Over the 12 month survey, 91% of respondents said they had bought a product or service from a company they trusted, while 77% had refused to buy a product or service from a distrusted company.

The Road to Rebuilding Trust.

Here is the Edelman summation:-

" If businesses are to regain trust, they will need to adopt a strategy of Public Engagement, by means of a shift in policy and communications. The essence of Public Engagement is the commitment of companies to say - and do as they say.

Organisations must be forthright and honest in their actions and communications. In a time of utter distrust, business leaders must make the case for actions and then demonstrate their progress against those goals. When problems arise within companies, stakeholders need to see senior executives take a visible lead in acknowledging errors, correcting mistakes, and working with employees to avoid similar problems going forward. This adherence to transparency is at the core of each of the four pillars of Public Engagement:-

-Private Sector Diplomacy

-Mutual Social Responsibility

- Shared Sacrifice

-Continuous Conversation.

Against the prevailing background of distrust of Australian business, the rewards will be significant, measurable and instant for those organizations who place the issue of TRUST high on their 2010 agenda.

Written by Graeme T. Smith

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Article Tags: Trust, Trust in Business



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