Editor’s note: Jill Miller is vice president at Livonia, Mich.,-based market research firm, Escalent. Miller can be reached at jill.miller@escalent.co.
In times of crisis, brands feel increasing pressure to remain relevant; engage and retain customers; and protect their image. I’ve seen this play out as companies continue to ramp up their communication and interactions in response to COVID-19 as well as the Black Lives Matter (BLM) movement. As brands publish statements, make promises and even implement changes, they’re hoping consumers get a glimpse of what they stand for and their values.
But putting your brand values out there involves risk. If you declare your brand’s values without taking any action – known as “virtue signaling,” according to Gartner – you could come across as pandering or inauthentic. This raises three important questions:
- What does it mean to be authentic?
- How much does authenticity matter to consumers?
- How do you know if what you’re doing is resonating?
Recently, Escalent asked consumers to rate 32 brands on 13 attributes related to authenticity. We found five of these attributes to be true indicators of brand authenticity. Brands that exhibited these key attributes were seen as more authentic than brands that didn’t.
Read on to find out how some of the top brands stack up, and learn what you can do to ensure your brand is as authentic as consumers need it to be.
The importance of authenticity
Authenticity inspires trust, allowing us to feel connected, invested and committed. It builds loyalty and brand love – which results in long-time customers, deeper relationships and ultimately, increased revenue.
This quality is especially important for younger generations, as brand love and loyalty are declining among Gen Zers and younger Millennials. More than other generations, these consumers want brands to stand for something other than profits, and they’re not afraid to speak up about it.
Finally, authenticity is becoming a key component of a brand’s strategy. In a post-COVID-19 world, CMOs rank brand strategy as their top strategic priority in 2020, according to a recent Gartner CMO survey. “Brand awareness and relevance in times of strife is more important than ever,” says Ewan McIntyre, Gartner analyst. “We are seeing successful brands take action that is authentically connected to their brand strategy and value proposition.”
Brand authenticity
Escalent views authenticity as a multidimensional construct, and we developed an index to capture it based on thousands of brand ratings on relevant dimensions. We mapped out what it means to be authentic and identified the main elements that accurately predict it.
Based on our analysis, we determined there are five key dimensions to brand authenticity:
- Thoughtful.
- Transparent.
- Reliable.
- Committed.
- Socially aware.
When we bring these dimensions together in the right way – applying individual regression weights – we have a measure of a brand’s perceived level of authenticity.
Which brings me to an important point: Communication during events such as COVID-19 and the BLM movement has the potential to significantly impact perceptions of a brand’s authenticity. So ensuring that your crisis communication is genuine and provides value to customers is essential.
Now let’s see how the brands in our study performed.
How do brands measure up?
By learning more about how the index works and getting a picture of brand rankings, you’ll be better equipped to navigate tough decisions and uncertain times. For this study, we focused on 32 top brands from the consumer and retail, financial services, technology and telecom industries. Our data show there are some clear high performers when it comes to authenticity, while some brands are really struggling.
Representing the consumer and retail industries, Trader Joe’s leads the pack. A fan favorite from its whimsical store design to its quality and healthy foods, people love Trader Joe’s. The brand also stands out for its COVID-19 response, protecting the health of coworkers by conducting wellness checks for employees before each shift, providing staff with additional paid sick time, adding $2 in “thank you” pay for every hour worked and installing plexiglass barriers in checkout stands to support social distancing measures. To keep customers safe, staff frequently disinfect all surfaces shoppers come in contact with and protect food samples by providing disposable utensils and handing out paper cups rather than allowing customers to self-serve from a stack.
Trader Joe’s has high scores across all five key dimensions, particularly standing out on being thoughtful and socially aware, where it’s ahead of the competition by a full nine and six percentage points, respectively.
However, the brand is going through some rough spots. It’s currently facing worker activism due to what some employees say is a haphazard response to the pandemic. And the brand is experiencing backlash for its racially insensitive packaging of international foods. Because consumers have so much trust in the brand, if Trader Joe’s has an authentic response in these situations, it can weather this storm.
Membership services AAA and USAA lead the way for the financial services sector. Both brands are valued for their reliability and commitment. USAA particularly stands out for catering to the needs of its customers (U.S. military families), making it easy to do business with it and its outstanding service. Despite high overall authenticity ratings for both brands, like many other brands on our list, there’s a considerable opportunity to improve ratings with greater perceived transparency. This means being clear, honest and straightforward in your communication rather than trying to hide issues that might put your brand in a negative light.
Samsung comes out on top among the technology brands thanks especially to its high scores on reliability. The company was able to regain customer trust after a 2016 public relations nightmare related to defects in its flagship Galaxy Note 7 smartphones. By taking immediate accountability, quickly recalling the phones, maintaining transparency and releasing new, safer products, it demonstrated authenticity and was able to turn negative consumer perception into brand love.
Although every brand is unique, one area where most seem to struggle – regardless of industry – is transparency. There’s a real opportunity to improve your perceptions of transparency and stand out from the pack. This could be a way forward for brands that fall in the middle or toward the bottom of the authenticity index.
Recommendations
- Commit to authenticity. Internalize the importance of brand authenticity and make it part of how you evaluate your brand performance.
- Think before acting. Check in with five key areas: Are you being thoughtful, transparent, reliable, committed and socially aware?
- Chart a path forward. You may not be where you want to (or should) be, but acknowledging that and dissecting the challenge areas are the first steps to becoming a truly authentic brand. Keep in mind that each of the five areas has a certain level of importance when seeking to balance your reputation. The key is to focus on the areas in which your brand is falling behind, but prioritize those that have the greatest impact on authenticity ratings first to see the biggest advances.
Connecting with consumers
It’s more important than ever for brands to connect with consumers. But if you’re missing the mark, you may still be able to improve your brand image. By knowing where you stand and finding the proper balance of thoughtfulness, transparency, reliability, commitment and social awareness, you can chart a path forward with brand authenticity. And that means more brand love, more loyal customers and more revenue in the long run.
Methodology
Escalent interviewed a national sample of 1,000 consumers aged 18 and older from May 5 to 7, 2020. Respondents were recruited from the E-rewards opt-in online panel of U.S. adults and were interviewed online. The data were weighted by age, gender and census region to match the demographics of the U.S. population. The sample for this research comes from an opt-in, online panel. As such, any reported margins of error or significance tests are estimated, and rely on the same statistical assumptions as data collected from a random probability sample. Escalent will supply the exact wording of any survey question upon request. Special thanks to Full Circle for providing the consumer sample.