Negative publicity can be a sudden, unexpected event or can occur in waves over time. It can feel like an onslaught of storms pounding the coast. Wells Fargo and United Airlines both faced such an onslaught over the past few weeks and months.
How should a business respond? How can a company repair a damaged reputation and win back customers?
Although I don’t know much about these situations other than what I have read, heard, and seen in the media, I am aware of how hard it is to convince consumers that a product or company is worth buying. And I also know how difficult and time-consuming it can be to win back their “trust”.
We published a study five years ago with my colleagues, Gui Liberali of Erasmus School of Economics Rotterdam and Glen L. Urban of the MIT Sloan School of Management, entitled “Competitor information, trust and two field experiments.
Regaining Customer Trust
We closely followed four marketing field experimentations by an American automobile manufacturer whose brand suffered decades of negative publicity about the quality of their products. The experiments were centered on actions taken by the company to regain trust.
In an experiment, automakers offered potential customers the chance to test-drive cars from competitors so they could compare them to the company’s lineup. In another experiment, an internet recommendation system was used to help customers choose the right car for their needs, even if the automaker didn’t make it.
Another experiment included customized relationship management and a moderated forum to allow customers to talk to each other about the different cars they were considering.
The theory was sound: the new automaker offerings were better than what customers thought. The automaker thought it would be the winner in a fair comparison and wanted to allow customers to do so.
Oscar Munoz, United’s CEO, may find it difficult to win back the loyalty of customers. Richard Drew/AP Photo
Why they have succeeded
We found that telling consumers they can trust a business is not enough. It is important to prove that a business and its products are indeed trustworthy. Customers must also be given tangible proof of the company’s changes and improvements.
The automaker’s experiments increased trust, which, more importantly, led customers to consider its cars and buy them.
This automaker is working to give customers competitive information when there are good news or when it’s cost-effective. Customers are encouraged, for example, to test-drive cars longer. Dealers offer competitive test drives to selected customers. They may rent competitive vehicles for the test drive.
It wasn’t sufficient for the automaker to establish a genuine and observable level of trustworthiness. Customers who were skeptical and wouldn’t even consider buying the automaker’s cars needed to be convinced. The company used cost-effective methods, like digital marketing and targeted marketing campaigns, to convince these skeptical customers to seek out information and pay attention.
Bottom line: There is promised “trust”, and there is genuine “trustworthiness”. And the only way to reach that stage of trustworthiness is by making genuine internal changes. Then, you can get your customers back in dealership showrooms – or Wells Fargo branches if it’s an automaker – or onto United planes. It’s only then that consumers can decide for themselves if a company or its products are “trustworthy.”
Winning over skeptics
It is good marketing to give customers comparative information on a company’s product compared to its competitors, even if they aren’t skeptical.
If the company is indeed changing and producing a higher-quality product or services, then providing information about competitors can be a great way to win over a highly skeptical client and create a “virtuous circle” of loyalty and trust.
I’m not familiar with the specifics of Wells Fargo or United’s marketing plans. If the messages they send to the public are not targeted and supported by tangible and trustworthy products and services, then it is unlikely that as many people will be won back. It is crucial that both firms pay attention to their customers and offer high-quality service.
Over many years, trust is built by providing the customer with products and services that meet their needs. Listening to the voice of the customer and valuing it is how you earn trust.