Why Consumers Are Drawn to Brands That Take a Stand

Summary

This conversation delves into the importance of trust in the digital landscape, especially in light of the Wirecard scandal. Richard Edelman highlights that brands must actively engage in social issues like racism and the COVID-19 pandemic to earn trust. He stresses the need for brands to reflect diversity, update outdated branding, and take concrete steps to address social issues. Consumer behavior is shifting, with people more inclined to support brands that align with their values, making it essential for businesses to embrace transparency and meaningful change rather than relying on superficial PR efforts.

Takeaways

• 😀 Trust in brands is more important than ever, especially in the wake of global crises like COVID-19 and social justice movements like Black Lives Matter.
• 😀 Two-thirds of consumers are more likely to buy or boycott a brand based on its stance on issues such as racism and public health.
• 😀 Consumers are demanding more from brands, expecting them to speak out and stand for social justice, rather than just promoting products.
• 😀 Brands must update their image to reflect modern values, particularly in terms of racial equity and social justice. Outdated branding is no longer acceptable.
• 😀 Companies must ensure their workforce and leadership reflect the demographic diversity of the regions they operate in, both in the U.S. and globally.
• 😀 Brands need to actively engage in conversations about important social issues, as seen with Dove's Father's Day campaign focusing on Black men affected by incarceration.
• 😀 The power of consumers, especially Millennials and women, to influence brand behavior is growing. People want brands to align with their values and beliefs.
• 😀 A new phenomenon, 'belief-driven buying,' is emerging where consumers use their purchasing power to reflect their views and push brands to take a stand on important issues.
• 😀 Linking executive compensation to diversity outcomes could incentivize companies to make meaningful changes in their workforce and leadership representation.
• 😀 Performative gestures, such as posting a black square or running a one-off PR campaign, will not be enough. Consumers demand transparency and real action from brands.

Q & A

How has the Trust in digital Europe been affected by the Wirecard scandal?

The Wirecard scandal has significantly shattered trust across digital Europe, highlighting the importance of maintaining trust in businesses, especially in the digital realm.

What does Edelman's study say about the role of brands in establishing trust?

Edelman's study suggests that brands play a dominant role in building trust, with two-thirds of consumers stating they will either support or boycott a brand based on its stance on issues like racism and COVID-19 protection.

What is the shift in consumer behavior regarding brands speaking up on social issues?

Consumers now expect brands to take a stance on social issues like racism and health crises. A significant shift has occurred where people prefer brands that speak up, with four times as many consumers trusting brands that engage in these conversations.

What steps does Richard Edelman advise companies to take to rebuild trust?

Edelman suggests three steps: 1) Fixing historical issues, like outdated branding; 2) Ensuring diverse representation within the company; and 3) Actively participating in important social conversations and taking a stand on relevant issues.

Why is updating branding and packaging critical for companies like Uncle Ben's and Cream of Wheat?

Updating branding and packaging is crucial to reflect current values and avoid outdated or insensitive representations from the past. Brands must align with today’s societal norms and expectations.

What is the importance of diversity in a company’s workforce and leadership?

Diversity is key for companies to mirror the demographics of the communities they serve. Edelman emphasizes that companies should have racial and ethnic diversity in their workforce and leadership to build trust and authenticity.

How does Dove’s recent Father's Day campaign highlight the importance of standing up for social causes?

Dove's campaign highlights the plight of black men in prison and how societal issues, such as mass incarceration, impact families. This campaign connects the brand to a relevant social issue, reinforcing the brand’s commitment to taking action on real-world problems.

What role does consumer power play in influencing corporate decisions today?

Consumers now have significant power, especially through their spending decisions. Brands are increasingly held accountable by their customers, particularly Millennials and women, who want to support businesses that align with their values.

What concern does Richard Edelman express about brands' PR efforts versus actual change?

Edelman is skeptical of brands that engage in performative actions, like posting on social media without making concrete changes. He stresses the need for businesses to demonstrate real, measurable change, not just rely on PR stunts.

How can businesses ensure transparency and accountability when it comes to diversity and employee treatment?

Businesses must show transparency by providing concrete data about their diversity efforts and employee treatment. This includes making efforts visible in terms of employee safety, fair treatment, and genuine organizational change.