On Brands In A Show Me Marketplace
Evidence Marketing, Word of Mouth Emerge As Alternatives
I recently had the chance to sit in on a dinner with about 20 heads of marketing at a gathering of the CMO Club. Framing some very interesting conversation was a presentation from Jarvis Cromwell titled “Managing Brand Reputation and Building Trust in a Show Me Marketplace.”
Cromwell, a 25-year marketing veteran who has served as CMO for several large global companies, kicked off the discussion by telling Club attendees that organizations are currently operating in the least-trusting world in more than a century. Citing a Roper study from 2002, Cromwell pointed out that only 13% of Americans found large corporations to be trustworthy. He also cited a Gallup survey, which showed that 62% of people do not trust large companies.
Cromwell provided DemandGen Report with a metric demonstrating that companies can equally lose as much as $2 billion equity valuation due to reputation and trust breakdowns:
1. A majority around the world - 62% - don't trust large companies to act in their interest -- a fact that is changing the game significantly for marketers
2. Your marketing message effectiveness? Forget-about-it. Only 3% trust the company itself as a credible source of information.
3. $2 billion is the average loss in equity valuation that a Fortune 1000 company experiences based on a major “trust event”. Which is especially scary when you consider that 10% of companies experienced that kind of trust event over the last decade. Several more than one. That’s why CEO rank reputational risk among their top 10 concerns.
--Jarvis Cromwell, principal, J-2 Consultancy
The result of this declining trust among consumers, according to Cromwell, is a “show me marketplace where a company’s actions speak louder than words.” Because of this overall cynicism, he pointed out that customer loyalty is harder to achieve and many leading companies are turning to evidence marketing and word-of-mouth marketing as alternatives to traditional media.
In addition to the customer consequences companies are facing due to waning trust, Cromwell added that employee engagement is also getting harder to drive. He demonstrated the positive impact employee engagement and satisfaction has on overall performance by showing that the company’s featured in Fortune’s 100 Best Places To Work grew by 176% from 1998 through 2004, while the S&P 500 increased only 39% during the same period.
As principal of J-2 Consultancy, Cromwell works with several companies on mitigating the negative impacts of the low trust environment as well as building their ability to attract, retain and grow customers. He has been active member of the CMO Club since its inception.
For those folks unfamiliar with The CMO Club, it was founded last year by Pete Krainik, the head of marketing and sales with a tech start-up called QD Technology. Krainik, who in the past had served as CMO for Avaya and Doubleclick, learned through conversations that many heads of marketing had similar challenges and were looking for a venue to share ideas with peers.
After starting with an intimate dinner gathering of eight executives in New York, the group has quickly grown to over 100 members and has now had six meetings in NY, CT and San Francisco, CA, with plans to expand to Boston and Chicago in the coming months.