How To Build Innovation And Trust At Scale – Forbes India Blogs
Companies are experimenting with innovation like never before. However, many firms do not realise that customer loyalty is hard-earned and doesn’t come easy. Can brands build trust by merely providing innovative experiences, or do consumers want to know how their data is being used to “empower” them in making the right choice? Accountability has become imperative in striking that balance between innovating at any cost and winning consumer trust.
In 2014, healthcare startup Theranos and its CEO, Elizabeth Holmes, were on top of the world. Theranos was a “revolutionary idea” whose business model was based on blood tests using proprietary technology with only a finger pinprick and a small amount of blood. According to Holmes, the tests would be able to detect medical conditions like cancer and increased cholesterol, and the company rode a surreal wave with investors pumping in more than $700 million. However, after being questioned in 2015, the company faced a string of legal and commercial challenges from medical authorities, investors, and the US Securities and Exchange Commission (SEC), among others. Theranos, Holmes, and former company president Sunny Balwani were charged with fraud by the SEC in 2018. In 2022, they were found guilty of multiple counts of fraud.
An adage aptly rings true: Trust is easy to lose but hard to earn.
How do companies successfully build and sustain trustworthy innovations to move beyond table stakes to attain true competitive advantage? The answer lies in what customers value today that the brand can live up to.
Edelman started measuring trust in 2000. They found that trust is fractured—not broken, with a rising gap in the two distinct elements of trust: effectiveness and ethical conduct. According to the most recent 2023 Edelman Trust Barometer that surveyed 13,802 respondents across 14 countries, the purchase funnel no longer reflects the modern consumer relationship. 78 percent of consumers say they uncover things that attract them to a brand and drive loyalty after their first purchase. For many, the purchase is the starting point, not the endpoint, with 59 percent more likely to purchase new products when they trust the brand, irrespective of the price.
As trust is a top buying consideration, there are heightened expectations for brands to show their values as consumers evaluate brands beyond their product offerings through brand action reinforced by communications. On the other hand, when brands lose relevance or authenticity, customers disengage. Here are three ways brands can be more accountable and build trust among consumers while innovating:
1) Privacy by design
This principle puts privacy considerations first: Embedding and adopting privacy-first practices such as encryption, access controls, and so forth for the design and architecture of systems into their solutions. Robust consent management systems allow users to provide informed consent for data collection and processing with the option to opt out of consent easily.
While brands venture into real-time consumer insights, they must look for platforms that hold consumer data privacy as a fundamental design principle, especially with legacy privacy regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). For example, a real-time Customer Data Platform (CDP) should have a strong data compliance strategy for customers’ opt-out preferences to access and delete their personal data captured and managed by the platform. Data management and consent preferences allow transparent privacy policies, user-friendly interfaces, and data usage statements.
Also Read- Data Protection Bill: Can it ensure your privacy online?
2) Accountability-first mindset
In the age of social media, an epidemic of fake news perpetuates bias and undermines brand credibility. This is where brands must transition from mere messengers to responsible messengers.
The Volkswagen emission scandal is a case in which a brand built on a formidable reputation found its credibility in question. In September 2015, the Environmental Protection Agency discovered the installation of defeat devices to escape emission norms. Volkswagen was a company that supplied 70 percent of the US diesel market, and this affected around 11 million vehicles worldwide that had “software irregularities” after they admitted to their deceitful software.
According to Amobee Brand Intelligence, which measured digital consumer behaviour across 600,000 websites, negative consumer sentiment spiked by 1,998 percent between September 14 (before the scandal broke) and September 18, after the findings of The Environmental Protection Agency (EPA) emerged. The US Justice Department noted, “The company knowingly continued to deny the existence of emissions cheating in its vehicles.” The case was in the public eye. When presented with facts, Martin Winterkorn, the former CEO of Volkswagen, did not order subordinates to disclose the cheating. Still, when one employee confessed about the defect devices, the truth eventually came out. This cover-up reflected organisational silence that led to low trust in the consumer’s eyes.
3) Governance and integrity
Governance is gaining importance in how user expectations have evolved and how their data is collected, used, and shared. With AI being called into question for the bias it introduces, having a ‘zero bias’ mindset ensures no discrimination based on religion, skin colour, or any other factor.
In my interview with Kiran Mazumdar Shaw, executive chairperson and founder of Biocon Limited and Biocon Biologics Limited, she emphasised placing a premium on strong governance and integrity despite facing early challenges while growing Biocon.
Also Read- The Indian pharma industry can become a significant value creator: Kiran Mazumdar-Shaw
“In growing Biocon, we have overcome many challenges, from an evolving regulatory landscape to significant financial outlay for R&D and manufacturing infrastructure. The path we had chosen was capital-intensive, research-intensive, and IP-intensive with inherently long gestational timelines for product commercialisation… To take on all these challenges, we laid a foundation of strong internal R&D capabilities. We nurtured internal scientific talent and state-of-the-art R&D infrastructure by consistently investing a substantial part of our revenue in R&D over the years. We created a corporate culture that placed a premium on good governance, compliance, integrity, and collaboration.”
The key attribute of a trust-based relationship is accountability. Brands that communicate and act on what customers value most, such as safety, security or sustainability, would be better placed than others. As customers feel more vulnerable, brands that step up and do more in addressing such vulnerabilities would be able to earn trust the hard way for sustained competitive advantage.
The writer is working as content marketing strategy and operations excellence leader—Global Marketing at Schneider Electric. Connect with him on LinkedIn.
The thoughts and opinions shared here are of the author.
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