Another month, another brand shock which only feeds into deep seated mistrust of business
Last month I wrote a piece looking at how the crisis at VW had implications for all organisations. Public trust in the people running companies is not high, with recent YouGov data showing that only 23% in the UK trust business leaders.
When a respected brand like VW suffers such credibility damage the worry is that it confirms some of the more negative fears people hold about business in general. This matters because it undermines business’s public mandate to operate.
Skip forward a couple of weeks and another brand shock hits the public’s conscience as TalkTalk deals with a data security breach – their third of the past year. While the anatomy of this crisis is very different to that of VW’s woes the result is the same: the brand’s public perception has plumbed new depths.
The chart below shows data from YouGov’s BrandIndex tool, which tracks attitudes to brand’s every day across many countries. It highlights how the size of the decline in the general impression suffered by TalkTalk in the UK was about the same as BP suffered following the Deepwater Horizon disaster and that its lowest score was comparable to that experienced by Barclays during the Libor scandal.
While we can’t yet be sure how the TalkTalk crisis will pan out, it provides us with another example of a business in reputational trouble. The problem for companies in crisis is that their problems are not viewed in isolation but instead through a prism of growing public mistrust. This is shown by international research YouGov did recently for the Legatum Institute’s “Prosperity for All” project that looked at the idea of broader corporate trust.
We asked respondents in seven countries the extent to which they agreed or disagreed with the statement: “Most of the biggest businesses in the world have dodged taxes, damaged the environment or bought special favours from politicians”. In the UK 74% agreed while just 6% disagreed – a net score of +68%. The scores weren’t much better in the other countries either with net agreement with the statement of +55% in the US, +67% in Germany, +63% in Brazil, +67% in India, +72% in Thailand, and +57% in Indonesia.
Perhaps the more worryingly issue for proponents of capitalism is that in the three most advanced markets where the YouGov/Legatum research was conducted there is a net negative response to the statement: “What is good for business is usually good for the rest of society.” In the UK the net score was -1%, in the US it was -7%, and in Germany it was -7%. In contrast, the net score was +32% in India, +23% in Thailand, and +13% in Brazil.
Some businesses may feel that the strong emotional connections their brands enjoy with customers insulate them from the sorts of broad public worries expressed in Legatum’s research. However, with each successive corporate disaster that hits the headlines these deep seated fears about big commerce (and indeed in other areas of life) are too frequently being confirmed in consumers’ minds.
Image from PA