Integrity doesn't just mean following through on your return policies. For a growing number of people, It in addition means standing for something bigger than profits and acting on it. Protecting your customers' personal data. Paying your fair share of tax. Ensuring your supply chain respects human rights. Simply put, integrity goes beyond keeping your promises. And that is the key to customer loyalty.
It is no longer enough to simply manufacture cool products or deliver unique experiences. Today's customers are looking for brands that also share their moral standards. They want to see these standards reflected in the brand purpose. And they want to be sure the brand is consistently acting in the pursuit of that purpose.
Brand relationship is ultimately all about trust. Customers want to be sure you are following through on your promises. Indeed, our research of Customer Experience Excellence across The Netherlands suggests the most successful brands are those that communicate about their values and live by their values. ASN Bank, for example, not only leads the rankings overall, the brand also leads on the Integrity Pillar.
Perhaps not surprisingly, Integrity emerged as one of the most important Pillars of customer success in The Netherlands. And its importance is growing; in fact, the importance of Integrity as a predictor of customer excellence rose by 7 percent compared to last year, to a weight of 18.7% on the overall CEE score. Those brands that demonstrate they are aware of their broader role in society seem to have more loyal customers and more enthusiastic advocates.
The rising importance of Integrity – and the increased value customers place on trusted brands – is broadly related to three main trends or pursuits.
1. The pursuit of meaning
The first is a general societal shift towards living more meaningful lives. People are more aware of the world around them and are looking for brands that share their beliefs. As a result, the influence of traditional differentiators (such as price and convenience) are diminishing.
Lush is an excellent example of a brand that connects its purpose and products to its customers' sustainability values. The brand, which prides itself on creating fresh, handmade cosmetics without animal testing, strives to embody environmental consciousness in everything they do. Similarly, customers place significant value in Triodos Bank, whose goal is to make money work for positive social, environmental and cultural change.
2. The pursuit of truth
The importance of trust and integrity have also been accentuated by a general eroding of trust in traditional institutions. Fake news, alternative facts and an increasingly fractured news environment are forcing consumers to question who they trust. At the same time, public discourse has become increasingly divisive and polarised ("you are either with us or against us"). Brands are finding themselves caught in the crossfire.
Take Facebook, for example. The social media pioneer has recently become mired in controversy around how users' posts are monitored and managed. In response, a campaign by a coalition of groups under the banner of 'Stop Hate for Profit' convinced more than a third of Facebook's advertisers to 'pause' their ad spend with the social media platform for the month of July. The share price of Facebook fell by 8 percent as a result.
3. The pursuit of security
Let's face it: the COVID-19 crisis has been stressful for everyone – many people are feeling isolated, confused and trepid about the future. Large parts of people's 'normal lives' are now in flux. It is taking time for people to adjust to the new normal. So it is not surprising that customers are looking for brands they can trust.
Customers are watching their brands carefully. They want to know who will be the first to lay off workers despite solid revenues. They are reading about which brands are stretching payment terms. And they are talking about those brands – like Heineken – who are taking extraordinary steps to help bring security to peoples' lives.
COVID-19 did not instigate the shift towards integrity; our annual research shows that Integrity has been an important Pillar of Customer Experience Excellence for years. However, the crisis did quickly demonstrate which brands truly lived their purpose and which brands were just talking.
Take the financial services sector, for example. During the last financial crisis, it was the banks and financiers that bore the brunt of the blame. In this crisis, however, they have successfully positioned themselves as compassionate supporters of individuals, companies and economies. Credit card companies waived interest, banks offered to defer mortgage payments, businesses were provided access to high-risk loans to help them pay their employees. And, in this year's survey, the financial services sector was ranked first for Integrity.
Others, however, went the other way. There have been a number of stories of retailers who, after paying out massive shareholder dividends, immediately asked their suppliers to stretch their payment terms. Companies that continue to make billions in profits have been caught applying for emergency government loans. And in this year's research, many of these companies have dropped down the rankings. Regaining customer trust will be the only way to recover.
For many brands, two big challenges will need to be faced: deciding where you stand on social and moral issues; and having the fortitude to act on your convictions.
Some will take this opportunity to look themselves in the mirror, think about who they are, who they want to be and who they want to work with. They will reflect on what they want to stand for. They will dare to follow their values, demonstrating to customers that they have their best interests at heart. And they will redefine their purpose and consistently align their Customer Experience with their Employee Experience in order to deliver on their promises – to their customers and their employees.
Our view suggests that – in the long run – it will be the brands that embrace integrity and demonstrate their values that will emerge strongest from this crisis. COVID-19 seems to be accelerating the natural selection process.