filter by tag: Trust

As the economy struggles to rebound, it’s inspiring to see the number of organizations, programs and projects dedicated to social and environmental issues continue to multiply. This week alone, Macy’s, Nestlé Pure Life, Kmart and PNC all announced new campaigns or projects:

• Macy’s is kicking off a star-studded campaign encouraging consumers to host a dinner party and donate money to Feeding America in lieu of the traditional host gift.
• Nestlé Pure Life is encouraging families to adopt new, healthy habits with ongoing efforts within its Pure Life/Best Life campaign.
• Kmart has partnered with TIME for Kids to develop a curriculum that teachers and parents can use to help teach kids about managing money.
• PNC announced the installation of North America’s largest soil-based living wall on the exterior of its Pittsburgh headquarters, enhancing it's existing efforts to be a world leader in green building.

The economy can be good, bad or downright ugly, but no matter because doing good has staying power. Goodness builds trust, trust fosters reputation and reputation drives sales. What’s more, 78 percent of consumers expect corporate contributions to social and environmental causes to remain the same or grow, indicating it’s more important than ever to be committed to the greater good in order to stay relevant and profitable. Stated simply - perseverance pays.

The other day I was chatting with a reporter who was doing a story on the Federal Trade Commission’s (FTC) latest efforts to crack down on companies that make bogus “green” claims about their products. Specifically, the FTC is going after Kmart for claiming that its American Fare private label brand of paper plates is biodegradable. The FTC challenged Kmart, not because it questioned whether the paper plates actually decompose. Instead the complaint was issued because of the way Americans typically dispose of their trash.

Enter TerraChoice’s list of greenwashing sins. The FTC called Kmart out because it says the biodegradable claim is irrelevant, sin number five of seven common offenses. 

At issue is the mindset of consumers and whether they assume the paper plates will actually decompose after use. When the plates are tossed in the trash, as the FTC believes they will be, they will likely be sent to landfills and buried in deep holes where they won’t see the light of day. Without exposure to the elements of nature, they can’t possibly decompose in a reasonable period of time.

I have to wonder what Kmart was thinking. Perhaps Kmart sees a future when curbside pick-up of household organic compostable waste is the norm. This service already exists in a handful of municipalities in the U.S. Along with garbage and recycling pick-up, some residents are getting their yard, food and biodegradable paper waste also collected and sent to compost facilities where these materials are turned into soil enrichments for gardens.

But maybe Kmart was simply doing what other brands do when they claim their products are “eco-friendly.” According to TerraChoice’s 2009 research, 98% of the green product claims being made are vague, unsubstantiated, conceal any unpleasant trade-offs, use bogus certification labels or are just plain fibs. All of this has consumers confused and often misinterpreting the claims that companies are making, Cone found in its 2008 Green Gap Survey.

Kmart may be the victim today. But as the FTC continues to investigate instances of greenwashing, we can expect that more brands will receive the same treatment. It may take some time to bring order to the green marketplace so consumers can actually trust the products they purchase. Until then, I suggest that consumers beware!

- Liz Gorman, VP

Stocks, sales, jobs and morale are plunging, so it’s not that surprising to learn about the latest victim of the current climate to hit rock bottom: consumer trust. According to the 2009 Edelman Trust Barometer, 77 percent of U.S. respondents have less trust in corporations than they did a year ago. For the record, that’s lower than the days following Enron, the dot com bust and September 11th.



Globally, the study found the ability to trust a company is one of the most important factors in determining a company’s reputation, just behind product quality and employee treatment. During a time when reputation and consumer trust is critical to market survival, what can companies do to mitigate further damage?

• Act Responsibly- Actions speak louder than words or spin, and people will be quick to call attention to any missteps. Taking a corporate jet to legislative hearings for a bankruptcy bailout is one of the most obvious blunders of late, but all companies are faced with making tough decisions every day from prioritizing investments to pricing goods, to choosing suppliers and fair treatment of employees.
  
• Be Authentic- Before communicating with your stakeholders about your positive efforts and good work, ensure that there are credible corporate practices in order to support any information you are sharing.
  
• Be Transparent- Stakeholders expect a more open book regarding financials and business transactions today. Now is not the time to hide behind closed doors. Acknowledge your struggles and the solutions you will pursue to assure your stakeholders that you are proactively addressing any issues.
  
• Engage in Dialogue- Instead of talking at your stakeholders, start a conversation and listen and respond to what they have to say. Social media offers an inexpensive and direct way to engage, so meet people where they are online and provide new forums for them to express themselves.
  
• Be a Good Neighbor- During times of crisis, companies that can prove they are more than mere providers of goods and services and demonstrate their commitment to their communities, employees and other stakeholders will stand out after troubling times have passed.
  
• Be a Resource- Your stakeholders are feeling the economic pinch too, so take the extra step to provide your organizational expertise or relationships to create a teaching moment for your stakeholders. For example, McDonald’s and Visa launched "McDonald's Practical Money Skills" program to empower employees.

At Cone, we’re heeding our own advice about the unparalleled importance of reputation management today and in the future by appointing our first “Chief Reputation Officer." In this new role, Mike Lawrence will be responsible for all client-facing reputational issues across the agency related to business issues, corporate responsibility, media relations and crisis prevention and management.