Building Trust through Digital Communication

1. Building Trust throughDigital Communication Professor Paul Argenti Tuck School of Business at Dartmouth Bob Pearson Blog Council & WeissComm

2. “Trust is like the air we breathe. When it’s present, nobody really notices. But when it’s absent, everybody notices.” —Warren Buffett

3. Our System Hinges on Trust • Capitalism is based on trust—when broken, credit markets • seize and consumer spending grinds to a halt. • As a result of the global credit crisis, the credibility of the • capitalist system is being seriously challenged: • Alan Greenspan, dubbed the "greatest banker who ever lived,” admits to misunderstanding market mechanics • Iconic CEO Jack Welch admits focusing on share price was dumb • The Financial Times runs a major new series "The Future of Capitalism" calling into question the effectiveness and survival of our modern business system Source: “Rebuilding Trust in Business,” Bronwyn Fryer, HBR blog, March 17, 2009

4. Does Business Act Responsibly? 0% 25% 50% 75% 100% 1968 70% 1976 15% 1985 30% 2008 20% Yankelovich & CNN/USA Today/ Gallup Poll

5. Tainted Reputation byFinancial Association • Trust, reputation, and image have become increasingly difficult for financial corporations to control • In the wake of billion-dollar government bailouts and year-end bonuses, the public has been quick to judge all players in financial services—and their employees—as pariahs “I’d almost rather say I’m a pornographer—at least that’s a business that people understand.” –Retired Wall Street executive who asked to remain anonymous “Oh, you’re one of THEM…” –Comment to a recently laid-off JP Morgan Chase employee “Wall Street’s New Pariah Status,” The New York Times, February 3, 2009

6. “Can I interest you in a faith-based account?” –New Yorker, October 2008

7. Customer Image Community Image Investor Image Employee Image Identity, Image &Reputation Drive Trust Corporate Identity Names, Brands, Symbols, Self-presentations is perceived by… Sum of their perceptions equals… Corporate Reputation

8. Why does Reputation Matter? Price Advantage Companies with better reputations: • Command premium prices • Pay lower prices • Entice top recruits • Have more stable revenues • Face fewer risks of crisis • Experience greater loyalty internally and externally • Are given greater latitude by constituents: Opportunity to operate • Have higher market valuation and stock prices • Have greater loyalty of investors, less stock price volatility Competitive Advantage Stability

9. Reputation environment is changing The evolution of communications requires a new approach to reputation measurement Web 2.0 Social Media Folksonomy Government Relations Podcasting Buzz Wireless RSS Operations Blogs Media relations Tagging Grassroots outreach YouTube Promotions Search engines Press releases Pitching reporters Online outreach IR New Communication Wikipedia Traditional Communication Finance Management and Strategy Viral marketing Third party outreach Public affairs Metaverses Branding Advergaming Special events Facebook Employee communications Brand management Content optimization MySpace Social networking Recruitment, Retention Flickr Syndication Consumer-generated content Citizen journalism Customer Loyalty

10. Defining Social Media Social Media is the democratization of content and the understanding of the role people play in the process of not only reading and disseminating information, but also in sharing and creating content. • Communication in the form of conversation, not monologue.   • Participants in social media are people, not organizations.   • Honesty and transparency are core values.   • It's all about pull, not push.   • Distribution instead of centralization.

11. Web 1.0 vs. Web 2.0 Web 1.0 Web 2.0 Collective Intelligence User Generated Content User Generated Content Published Content Published Content

12. Web 1.0 vs. Web 2.0 • Web 1.0 • Push business models • Commercial software • Customer service • Bestseller products • Traditional media • 1on1 customer relationships • Centralized product development • Web 2.0 • Pull business models • Open source software • Customer self-service • The Long Tail • Social media • Customer community relationships • Decentralized product development Communities of Individuals Shift of Control Institutions

13. The Fundamentals of Trust • Trust is more emotional than logical—it extends beyond rational thinking • Trust is highly personal—no universal standard exists • The notion of trust is based on: • Predictability: you know what you’re going to get • Leaps of faith: you’re willing to deal with someone despite incomplete knowledge of them • Exposed vulnerabilities: you enable someone to take advantage of your vulnerabilities but expect they won’t • Blind belief: you rely on someone to follow through without the need for constant oversight or questioning • If tarnished, trust is exceptionally hard to restore

14. How Can Companies Bridge the Trust Divide? • Trust is not only about following baseline rules, procedures, and protocol—that’s only the beginning • Trust is a direct by-product of a company’s relationships of interdependency with its diverse and inter-connected constituencies • To build trust, a company must not be authoritative but authentic in all of its dealings with constituencies • One current way: Through use of social media Source: The Authentic Enterprise, Arthur Page Society, 2007

15. Becoming an Authentic Enterpriseby Embracing Social Media • Companies become authentic by: • Dealing with constituents openly and candidly—forging partnerships as equals with constituents • Honestly communicating the unique qualitiesthat set the organization apart from the competition and will truly add value to customers • Clearly conveying the values that define the organization—the underlying principles that underpin every action taken by employees and the organization as a whole • Making promises and never failing to keep them • Admitting mistakes when made and reiterating how they will be prevented the next time around • Social media enables companies to communicate authentically

16. What Do Leaders of Great Brands Understand About Building Trust Online?

17. #1: Customers are co-shaping your reputation everyday Are you accidently outsourcing the building of your brand?

18. Customers Shape First Impressions

19. Customers are ChangingFaster than Companies • Breadth:500k new online customers each day • Location:>40% of online in Asia • 1st Impressions: YouTube Is 2nd largest search engine • Habits: Brazil one of leading consumers of online info Are you a student or an observer?

20. Countries’ Habits are Changingas They Mature Online: Brazil

21. #2: Leaders will identifyissues before they happen Customers assume we are listening to their issues in real time

22. Patterns are Clues Waiting to Be Found • Patterns emerge before public awareness • A common problem emerges in a forum in Beijing, a blog in the UK and a mention on twitter in the U.S. • Your multi-function hot issues team springs in to action to analyze what is happening and prepare • When the issue becomes public, you are ready with answers • Customers trust us to be smarter on identifying issues • You decide that if a hot issue is defined, it must be solved • Your company continuously integrates online learning’s into key parts of your company (institutional memory)

23. #3: You Realize that Your Customer Does Not Care Where You Want Them To Go Customers are part of their own liquid network Become a friend who can be trusted

24. A Tectonic Shift is Occurringin Where Conversations Occur • Language:Customers speak online in their first language (10 reach 95%) • Location:Facebook, Twitter, Forums • Time of Day:Ex/low volume during day, high volume in evenings Where do your customers like to hang-out, learn and share?

25. 10 Languages Reach 95% of People;Hindi & Russian are Next

26. Trust Builds When You VisitYour Customer in their Home

27. #4: You Know that <1% of a Customer’s Time is Spent Purchasing a Product 99% of time is spent browsing and socializing You build trust by being there when you are needed, not when you need the customer

28. The Real World of Our Customers Online • Broadband users spend 1 hour, 40 minutes (48% of their spare time) online, and more than half of this is spent accessing entertainment and communication The Purchase Experience<1% of a person’s time is spent actually purchasing our products Opinions are formed during the 99% of time outside of the purchase path

29. E-Commerce WillBecome E-Community • Reality: <1% of time is spent buying online. 99% is spent browsing & socializing • Peer Influence: 3 of 4 customers look to their peers for advice on a purchase • Integration: Why would we ask a customer to go to multiple sites? The value is…….? Convergence is led by convenience

30. #5: You Focus on How PeopleConsume Content & UnderstandHow it is Changing Customers decide where they will learn It is not via advertising…

31. The Media World isn’t Changing…it Changed • Media Outlets:74 of top 100 outlets for Techmeme are blogs/online sites • Bloggers:3 of 4 look to each other for their next story • Customers:3 of 4 look to each other for purchase advice • Conversations:are the driver of SOV, influence and recommendations Don’t define it as offline or online. It’s all one media world. Just know which conversations are defining your brand

32. The New Media

33. Your Broadcast Station:Increasingly, the 1st choice for learning

34. #6: Your Customer is DiscussingYour Brand Everyday Do you know where they are occurring? Are you a participant or observer or are you absent?

35. How Does Your CustomerDiscuss Your Brand? Dynamic Drill Down River of News Topic Trends Conversation Cloud Language Media Type Post Tag Region Sentiment Source Tag User Assignment WHAT DOES THIS TELL ME? Top 50 most mentioned words in conversations surrounding “Pharmaceutical” over the past 30 days.

36. Do You Know WhereThe Real Traffic Is? • Allstate insurance: 3.99MM • Allstate insurance company: 943k • Geico.com: 1.83MM • Geico insurance: 1.77MM • State Farm insurance company: 4.9MM OR • Insurance quote: 31.99MM • Insurance group: 22.3MM • Home insurance: 75.8MM • Auto insurance: 64.8MM

37. What is Being Said About YourBrand in Each Key Language?

38. #7: There Isn’t a Destinationfor a Customer Visiting your site is not their goal, no matter how pretty it looks We are expected to just sort of “be there” when needed

39. Syndication of ContentMatters More than Site Traffic • Micro-Communities: The social media world grows & fragments, simultaneously • Customer-Driven Preference: “I want what I want where I want it”. Stop “spamming me”. • Participation is a Choice: If companies don’t listen, customers vote via lack of traffic and participation. What is your content syndication plan?

40. 10-20% of Your Customers Will Call You Each Year Due to a Problem 80-90% will not call you despite a problem Few will call you just to catch up

41. Q&As Matter • Word of mouth matters • Partnering with customers matters

42. #8: Customers Want to Do ThreeThings to Help Each Other You build trust by being part of this process

43. Ideas, Knowledge, Solutions • Share ideas: Let’s improve the next product or service together • Share product knowledge: Here is what I know…hope it helps you • Help peers with problems: I had the same problem, here is what I did

44. Dell IdeaStorm:Over 11,000 Ideas & 325+ implemented

45. Think Big: Empower Your Customers to Share Knowledge and Benefit the World Solved button added to Original Post; clicking it will take user to Accepted Solution Accepted Solution post Turns green and logo added

46. #9: We don’t have to measuretrust internally, we live it Our employees feel free to help each other and, as a result, our company Leverage the world’s greatest operating system – the web

47. Employees Don’t ChangeWhen They Arrive for Work • They prefer blogs • They like to share ideas and comments • They want real-life video, not canned productions • They want to help each other, not be polite to senior management and hold in their thoughts

48. #10: We Judge a Person onHow They Interact with Us Guess what...customers do the same thing when they shop with us online

49. Shopping is Changing Permanently • Ratings & Reviews: Your peers define the brand and experience for you • Co-Browsing: Your peers help you shop • Contextual Content: Info you want appears when you discuss it Individuals in companies can have the respect of peers. How many “company peers” do you have?

50. #11: We Listen to our Customers,So We Create New Communities Think outside the box, then get rid of the box