The previous article in the series, building the social innovation business case explored how social innovation can attract and retain top talent, which increases the bottom line as well as helps values aligned employees use their expertise to drive social innovation.
Trust in institutions is diminishing globally and rebuilding trust can create a strong competitive advantage. Acknowledging and acting on social issues provides an avenue to rebuild trust with consumers and the community.
Further, trusted brands have consumers who are more likely to advocate for their products with friends and family as well as be a repeat purchaser.
A. The Business Problem
The Edelman Trust Barometer provides a global overview of societal trust in 4 big institutions; business, media, government and NGOs. It is not surprising that trust has consistently been slipping globally with the rise of fake news and polarising Government parties. According to the 2018 Edelman Trust Barometer, trust in Australia declined across all four institutions. Globally, Australia is positioned just four percentage points above the world’s least trusting country, Russia.
According to the survey, 65 per cent of society believes that CEOs should take the lead on change and not wait for Government. Some of the initiatives on the Edelman roadmap included:
– Foster economic prosperity by creating an environment where innovation and scientific advancement can thrive,
– Empower employees to have the skills necessary to be competitive in the global workforce
– Ensure everyone has an equal opportunity to succeed.
B. The Role of Social Innovation
To build trust, it is important for businesses to understand which social issues make sense for them to tackle. A social issue that does not align with the brand or industry they operate in has the potential to erode, rather than create trust. Examining a company’s core expertise, industry, competitors and social trends can help uncover new opportunities for social innovation initiatives. See Initiative Mapping Template in Tools and Resources for a practical guide to understanding your current state and the shared value opportunities.
Creating a social innovation strategy will provide a tangible and meaningful blueprint to articulate a business’ purpose beyond profit.
In our experience, CSR and philanthropic endeavours can be met with scepticism and be perceived as tokenism by consumers. However, shared value can create a powerful narrative and proof point of the role of business to improve society.
The key to this is creating clear and concise communications with no ‘fluff.’ It is important that the communications and marketing understand the purpose led language and know of innovative ways to translate these to consumers. Helping consumers understand why it is important rather than just what the business is doing is critical to develop trust through communications.
C. The Business Opportunity
Back in 2015, Edelman mapped the actions of respondents based on their trust in a brand. It clearly shows that the society’s level of trust in brands directly translates into actions that impact a business’ bottom line.
It is clear that trusted businesses have a more loyal customer base who will pay more for their products, repeat purchase and also advocate to their networks. This has a dramatic ability to translate into increased revenue.
Above: Edelman’s trust and societal behaviour graph (via Prophet)
E. The Metrics
From the Edelman trust behaviours chart above, these metrics can be tracked and act as a proxy for trust measurement including:
- Purchasing products: Repeat purchasing, adoption of loyalty schemes
- Peer advocacy: Net Promoter Score, social media negative post
- Purchasing shares: Buy/sell share data, Annual General Meeting shareholder surveys
- Download the Initiative Mapping Template and fill it out
- Read the Edelman Trust Barometer to understand more practical ways to build trust in society.