How many of us DVR our favorite television shows because we don’t want to be bothered with ads?
Or click the “x” on those pop-up screens telling us about limited-time offers? What about the ads displayed on billboards, on the sides of buses, in the subway, the grocery store and sporting events? When advertising pervades our daily lives—at a time when we’re subjected to so much noise—are we really paying attention anymore? Not as much as we used to.
The reality is that we’ve become much more selective about the marketing messages to which we give credence. That selective attention is due to several factors: First, the above-mentioned noise. When we’ve got an onslaught of messages competing for our attention, we have to create our own filters. Second, we’ve become a bit cynical. Corporations have suffered an erosion of trust among the consumers they serve.
“The more virtual our lives get, the more we hunger after something genuine. What people really want now is not just a product or service, it’s an experience. An experience that is more honest and transparent … more authentic— and businesses are going to have to keep up with growing consumer authority and give people what they want if they want to survive.”
— Neil Patel, entrepreneur, digital marketer, author and blogger
The 2018 Edelman Trust Barometer, an online survey of 33,000-plus respondents in 28 markets, found that trust in institutions in the United States suffered the largest-ever recorded drop in the survey’s history among the general population. The survey’s results show declining trust for all U.S. institutions across the board. “In this year’s survey there have been only losers, including business: the turmoil has had a clear, negative effect on Brand USA,” said President Lisa Ross and Global Chair Stephen Kehoe in the report’s executive summary, America in Crisis.
“It’s the ultimate irony that it’s [declining trust] happening at a time of prosperity, with the stock market and employment rates in the U.S. at record highs,” said Richard Edelman, Chief Executive Officer of Edelman Public Relations, in an interview with The Atlantic in January (“Trust Is Collapsing in America,” Jan. 21, 2018).
In March, The Reputation Institute, a global research and advisory firm for reputation, issued the Global RepTrack® 100, the largest normative database on corporate reputation in the world. The RepTrack® model appraises how the general public views more than 7,000 of the world’s most recognized brands—including more than 140 companies in the United States. The report uncovered several eye-opening statistics, including that just 38.5 percent of respondents trust companies to do the right thing, and 30.9 percent trust those companies to do the right thing when nobody is looking. Particularly disconcerting is the report’s finding that 2018 is the first year of significant reputation decline since the end of the Great Recession. The bubble has burst, so to speak, since 2017, sliding 1.4 pulse points. Why does that matter so much?
Companies whose reputations are in question have more difficulty garnering national and global support from stakeholders (including shareholders, existing and potential customers, the general public, industry organizations and government and regulatory officials). When times are challenging—for example, in the event of a crisis—those companies don’t have the benefit of a wellspring of stakeholder support, which could buffer the damage.
The forecast isn’t all gloom and doom, however: The Global RepTrack® 100 also found that 51 percent of respondents are still open to being convinced. In other words, more than half of us are fence-sitters. What would it take to change our minds? Excellent customer service. Open and frequent communication. Transparency. A sincere and ongoing commitment to the communities in which they work. In short, that priceless asset known as a good reputation. And if these traits sound familiar, they should.
“People will support that which they help to create.”
— Mary Kay Ash
Direct selling companies by nature possess distinct cultural characteristics and other points of difference that can be the antidote to this declining trust in the marketplace. In this age of mass-marketing fatigue, independent representatives offer refreshing alternatives: personalized service, customized product recommendations, trusted and long-term relationships. Of course, a culture of transparency comes right from the top, starting with a company’s very DNA—its mission and core values—which not only are communicated by its executives early and often, but which form the basis of every decision and reverberate through every touchpoint with the field and employees alike.
“Nimble business leaders will recognize that in this new world they cannot operate with a top-down approach,” said Matthew Harrington, Edelman Global Chief Operating Officer in a January 2017 editorial for Harvard Business Review in which he discussed the 2017 Edelman Trust Barometer, which showed for the first time a decline of trust across all four institutions of government, media, NGOs and business. “Rather, a flatter, more participatory model is needed, one that isn’t just ‘for the people’ but ‘with the people.’ The best companies are already deeply listening to and strategically acting on insights from their employees, customers, and other stakeholders.”
Mary Kay Ash often said, “People will support that which they help to create.” Technology affords companies a prime opportunity to engage and build trust with the stakeholders they serve. They key is to let your audience see behind the curtain, to involve them in the decision-making process and solicit their ideas and their feedback—all while driving depth of understanding about what you stand for.
Reputation has always been important, but we can say conclusively that it’s never been more important than it is today, because it can have a direct impact on a company’s bottom line, including a decline in the willingness to invest by prospective shareholders, lower sales, and difficulty attracting and retaining talent—particularly millennials, who are more likely to judge companies based on their perception of an organization’s values.
A More Meaningful Way to Measure Success
When companies hold an event or launch a national advertising campaign or product promotion, they’ve traditionally measured their success through metrics—for example, how many media impressions they secured, or, with the onset of social media, how many “likes” they’ve generated. Do those gauges really move the proverbial needle, though? “To me, reputation is the golden grail—being able to show through data that independent representatives and consumers are more likely to buy from you, trust you, say something nice about you, invest in you… those are the numbers that really matter,” says Crayton Webb, CEO and owner of Sunwest Communications, a Dallas-based public relations firm whose clientele includes several direct sales firms. “It’s not a short game—you may not see results at the end of the month or end of the quarter. But smart leaders are looking ahead. Reputation is a clear indicator of business success.”
While there are several actions companies can take on a daily basis to enhance their reputations over the long term, social media may be the lowest-hanging fruit. Its ubiquitous influence is impossible to ignore. And companies who ignore it do so at their own risk.
Social Media Levels the Playing Field
With the advent of social media, companies are no longer the gatekeepers of information. Instead, consumers are often starting the conversation, communicating with companies before, during and after a purchase, and often in a public forum. Subsequently, peer reviews have become extremely influential. A single negative review posted on a company’s social media feed and left unanswered can easily mushroom into a full-blown reputational crisis. On the flip side, consumers are also discussing what companies are doing right, giving visibility to innovation, good corporate citizenship, customer service and product experiences. As we’re aware, however, bad news has been known to travel faster and further than good news. Another point to consider is that the traditional barrier between company leadership and the public is no more. How easy is it for a consumer to contact a CEO directly via its website, through an email address or social media post? A CEO who embraces that accessibility, though, and engages the public in two-way conversation is communicating trust and is likely to earn it in return.
“If you do something that isn’t acceptable, it can become common knowledge in minutes. Social media has played an important role in making companies more honest and authentic.”
— Mimi Cohen, Vice President of Marketing for Immunotec
“Aside from creating a forum for sharing and engagement, social media makes it even more important for companies to walk the line properly,” says Mimi Cohen, Vice President of Marketing for Immunotec. “If you do something that isn’t acceptable, it can become common knowledge in minutes. Social media has played an important role in making companies more honest and authentic.”
“The PR issues associated with not being authentic today can be escalated very quickly,” says Mannatech CEO Al Bala. “Social media forces you to be that much more transparent about what you’re saying and doing. There’s no place to hide.” At Mannatech, he adds, “we spend about two to three hours a day going through social media and keeping our fingers on the pulse of what’s happening out there. I think social media is one of the greatest tools for developing brand authenticity.” In an effort to remain visible, Bala and his executive team often deliver messages to associates through Facebook Live. Staying as accessible as possible, he says, helps ensure that, as their messages filter through the field, messages remain representative of Mannatech’s brand authenticity.
Brand Authenticity as Part of the Selling Proposition
Over the years, the direct selling industry has commandeered a shift in focus, placing less emphasis on the achievement of “pie in the sky” wealth and more on the attainment of shorter-term goals. That redirect has helped make authenticity part of the selling proposition. At MONAT, while many of their Market Partners are making exceptional incomes, they don’t try to oversell it says Stuart MacMillan, President. “Life-changing money is different to different people. We focus on a goal of saying that we want to enable one million families to make an additional $500 a month.”
A lot of companies that are successful these days are way more focused on the masses versus the 100 or 200 people making more money at the top. Further, one of the key elements behind why people start a MONAT business and stay in business, MacMillan says, is that “they enjoy each other’s company. That’s authentic. You can’t manufacture that.”
“The way I see it, authenticity upholds a level of integrity—it delivers on the promise of our brand to the extent the Associates and their customers perceive your brand to be true to itself, to care about your consumers enough to deliver that value proposition you promised,” says Bala. “It helps our Associates to be able to come across with that level of authority as they represent our products and our business opportunity. But this has to start at the top.”
“I believe that when we are authentic in our brands, when we tell the truest, most deeply honest and most elegant stories, they are reasonably easy to remember and repeat because they touch someone’s heart .”
— David Vanderveen, Vice President and General Manager for XS Business Globally at Amway Global
Brand authenticity can be difficult to preserve as your independent sales force grows. Companies, then, must double down in their efforts to ensure that their core values emanate through every communication and that the field understands their role in upholding the brand’s reputation, which in turn promotes the credibility and longevity of their independent businesses.
Familiarity can breed admiration, build reputation and ultimately increase sales. When a consumer is considering whether to buy Product A or Product B, what drives his decision? If that consumer knows that Product A comes from a company that routinely supports hunger relief efforts, but he’s not sure if the manufacturer of Product B has aligned itself with any worthy cause, what are the odds he’ll purchase Product A?
“I believe that when we are authentic in our brands, when we tell the truest, most deeply honest and most elegant stories, they are reasonably easy to remember and repeat because they touch someone’s heart,” says David Vanderveen, Vice President and General Manager for XS Business Globally at Amway Global. “I just watched the Fred Rogers documentary called Mister Rogers & Me. It’s amazing on many levels about how we all relate to each other, and our businesses are built on direct relationships in direct selling more than other businesses, but the key takeaway for me was that Fred wanted people to be deep and simple. Fred said, ‘I feel so strongly that deep and simple is far more essential than shallow and complex.’ When we apply those words from Mister Rogers to our brands, it can make our work more difficult (the deep and simple ideas take more effort than the shallow and complicated ones), but so much more effective, too.”
Best Practices to Being More Authentic
What do the most reputable companies have in common? They’re collaborative and transparent. They demonstrate their value. They communicate often. And they’re thinking ahead. Crises will occur. And when they do, if you’ve done the legwork to build an army of evangelists for your company, an interesting phenomenon occurs: They’ll speak out on your behalf.
Be relatable. Avoid corporate-speak. Social media, blogs, live video and other modern media rely on straightforward, informal conversation, which in turn can help establish trust with existing and potential field members and customers, as well as the public at large. “We’re a company that believes in open communication,” Cohen says. “The more you communicate with your field, the more they trust you. It’s not always great news, either. It’s about constant improvement. We don’t launch and leave; we launch, listen and improve. The relationship we have with the field is our number-one priority. We’re one team, one family, one voice, and our goal is to deliver the best products and the best opportunity.”
Transparency includes owning up to mistakes with employees and field members. “The best way to do that is to overcommunicate and get out ahead of it,” MacMillan says. “Being honest about your mistakes, showing you have their best interests at heart and that you’re willing to rectify a situation, is key to gaining trust and credibility.”
Involve your distributors, especially during times of change. Immunotec, formerly a public company, was recently purchased by Mauricio Domenzain, now CEO, in partnership with a private equity firm, and strategically rebranded itself. During any significant transition like this one, “Part of the way you build trust is by having a level of consistency, not switching your story around every five minutes. Understand your mission, vision and values,” Cohen says. “Work hand in hand with the field when you rebrand, and make sure you’re staying true to who you are and who the field thinks you are. It’s truly a partnership with the field, and I think they feel it. They know we truly care. People in direct sales are naturally intuitive and will know right away if you’re not being authentic.”
Train your field leaders as well as your executives. With their volunteer armies of independent salespeople, direct selling companies have a powerful vehicle for developing brand authenticity. A growing sales force can become a liability, however, if companies don’t ensure that their ambassadors are representing the company’s culture, its products and the brand accurately and consistently. That’s why it’s vital to educate the masses on such topics as earnings claims, product benefits, social media etiquette and more. The goal shouldn’t be to shut down the conversation, but rather empower your employees and your field members to share your story.
Highlight your contributions (but stay humble). Corporate social responsibility has been a significant focus for most direct selling companies. An ongoing philanthropic commitment can go a long way towards what Webb refers to as “building goodwill in the bank of public trust.” He recommends that clients keep four points in mind in order to leverage CSR efforts effectively. First, your cause of choice has to align with your company’s mission. Second, commit for the long term. One-and-done efforts aren’t likely to yield the results you’re seeking. CSR isn’t about “just writing a check or sponsoring a rubber chicken luncheon,” Webb says. Third, speak up. While some companies are reluctant to publicize their CSR efforts for fear of appearing self-serving, as the age-old question ponders, if a tree falls in a forest, and nobody hears it, did it even exist? Fourth, focus. You can’t be everything to everyone. Zero in on one or two key issues that support your mission, be forward-focused and solution-oriented, and rally your greatest assets—your employees and field members—behind the cause.
Tell your story. “The best way to do that on social media is not always about selling something,” Webb says. “You want to create an emotional connection.” The best brands, he adds, are telling stories typically in three categories. One, they’re sharing stories about their field members—real people with real stories whose lives have been impacted by the company’s products and business opportunity. Second, they’re talking about their commitment to being a good corporate citizen—how they’re addressing society’s gravest problems. Third, they’re talking about innovation—how their products and their business opportunity are improving customers’ lives.
There’s no denying the momentum of our $189.6 billion (source: WFDSA) global industry. Yet direct selling has hardly scratched the surface of its potential for growth. We recognize that continued education can bust myths and promote greater understanding of our industry and its impact on individuals and families throughout every socioeconomic sector. What might speak even more loudly than facts, however, is reputation.
Reputation is largely built and destroyed based on experience says Vanderveen. “The misunderstandings in our industry aren’t always misunderstandings. There are people who have behaved badly and maybe we haven’t always corrected those bad behaviors quickly enough, particularly when it’s generating sales we like. I like to talk about making it easier for people to do the right thing, by providing them with deeper and simpler brand and product stories to remember and repeat and also the tools and programs that make it easier to do the right thing, the more authentic thing, than the wrong thing.”
Great products and an open-ended business opportunity are competitive advantages in this retail marketplace, to be sure. But a company whose values direct every touchpoint—who provides the personalized service, who consistently engages its employees and field members, and who strives for transparency—earns customers for life.
Data Security Raises the Stakes
Another urgent factor promoting greater transparency in our current business climate is the topic of data security. In late May, the General Data Protection Regulation, or GDPR, officially went into effect in the EU. Under the terms of this new regulation, organizations throughout Europe now have to adhere to common standards for data protection. The idea is to give citizens greater control over their personal data, including their names, addresses, credit card numbers, IP addresses and even genetic and biometric data. But it’s not just EU companies and organizations who have to abide by these new rules. Any company wishing do business in the EU must meet GDPR standards. An organization who discovers a breach in its data must report it to the appropriate regulatory authorities within 72 hours of discovery. The penalties for noncompliance are steep and will be determined based on the severity of the breach and the organization’s standards of GDPR compliance prior to the breach.