Key Takeaways

•  91% of customers are willing to reward a brand for its authenticity with a purchase, investment, or endorsement.
• For 80% of customers, content-authenticity is the most influential decision-making factor.
•  61% of people believe that admitting mistakes is the highest level of transparency for a company.
• The most common reason that consumers lose trust in a brand is related to its impact on society (69%), whether it's the fact that the brand is silent over societal issues or they fail to address them in the most authentic way.

Introduction

• According to a PR agency (Ranieri) 91% are willing to reward a brand for its authenticity with a purchase, investment, or endorsement.
• The below diagram is an illustration of how consumers reward brands that have earned their trust. "Trust can help consumers move towards the whole brand funnel, from awareness to sales but also to advocacy and support."

 

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• Social Sprout's survey shows that when consumers agree with a brand's stance, 37% would recommend the brand to friends and family, 36% would purchase more from the brand and 29% would publicly praise or promote it.
• It has further reported that when a CEO is transparent on social media, 38% of consumers will increase their brand loyalty and 32% will buy more from that brand.
• Trustpulse states that "companies with an authentic brand are trusted more and get more sales than companies perceived as being inauthentic." It has provided the following statistics related the impact of trust and authenticity on buyers' purchase decisions.
• For 31% of consumers, trust-worthiness is the most important quality for a brand.
•  91% of consumers prefer brands that are honest about their products and services (this is consistent with the findings from Stackla).
•  63% of consumers will choose brands that are perceived as more authentic.
• For 80% of customers, content-authenticity is the most influential decision-making factor.
• Stackla has identified the following insights related to the perception of authentic brand marketing.
• While 92% of marketers believe that most or all of their content resonates as authentic with consumers, consumers (51%) think that less than half of brands provide authentic content.
• Consumers are 2.4 times more likely to say user-generated content is authentic compared to brand-created content. Marketers are 2.1 times more likely to say brand-created content is more authentic.
•  79% of consumers were highly impacted by user-generated content. Respondents who were impacted by brand-generated content and influencer-created content were 13% and 8% respectively.
• The 2021 authenticity gap report has provided the following statistics related to the value consumers place on different attributes of authenticity.
• According to this report, the 9 drivers of brand authenticity are customer benefits (better value, better care of customers, and innovation), society outcomes (taking care of employees, positive impact on society, caring for the environment), and management behaviors (consistent/frequent/credible communication, consistent and stable performance, and commitment to acting ethically and responsibly).
• Out of these factors, only around half (47%) of consumer perceptions and beliefs about a company are shaped by the customer benefits it offers. 32% is shaped by societal outcomes, while 21% is from management behaviors.
• Consistent with the above findings, it has been reported that in order for a business to create an authentic brand, it must change the world in some way and also communicate those efforts to others. In fact, 68% of Gen Z’s expect brands to contribute to society.
• Survey findings show that 84% of US Millennials would be more loyal to a brand if they knew it was transparent. Overall, 64% of global consumers prefer to buy products or services that appeal to their ideals.
• It has been reported that 61% of people believe that admitting mistakes is the highest level of transparency for a company. The article further states that "the positive side of showing transparency as a brand is that consumers don’t expect you to be perfect. They expect you to be honest and put them first."
• The diagram below shows the five most effective channel sequences for earning trust among those who are not already customers of the brand.

 

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• The following insights have been obtained from market research reports on brand authenticity.
• "Individuality, consistency and continuity positively influences customer perceptions of brand authenticity. Higher consumers’perception of brand authenticity results in higher perceived value and brand trust." Authentic brands have the opportunity to form a stronger emotional connection with consumers, compared to less authentic brands.
• "Being intrinsically, rather than extrinsically motivated to produce a product increases authenticity perceptions, even for brands that are passionate about making a product that consumers dislike." This perception also affects customers' quality expectations.
• Brand authenticity positively influences trust and loyalty, increases brand equity, and adds value to the consumer experience.

• According to survey findings from Sprout Social, 55% of US consumers would boycott or discontinue shopping with brands that support public issues that do not align with their own views. Hence, it is important for brands to align their values with those of their customers.
• In addition, it found that 53% of consumers believe brands take a stand on societal issues for public relations and marketing purposes, while 35% believe brands that do so are " jumping on the bandwagon." Cynical views of such practices by brands have led to terminology such as "woke-washing" and " rainbow capitalism."
• The most common reason that consumers lose trust in a brand is related to its impact on society (69%). "Whether it’s the fact that a brand is silent over societal issues or they fail to address them in the most authentic way, it’s a deal breaker for consumers who expect from brands to express their values."

•  56% of consumers surveyed think that too many brands use societal issues as a marketing ploy to sell their products. "Talking without committing to any action can actually lead to trust washing." Hence, a brand's attempt to build trust can backfire if its marketing efforts are seen as inauthentic.

• The following insights have been obtained from market research reports on the impact of inauthenticity.
• According to a research report, the majority of consumers (73%) care about deceptive advertising. It was also found that the respondents that stated that they do not care about it have stopped buying such products. "The study concluded that deceptive advertising affects a business demand and customer loyalty negatively in the long term."
• Another study states that the corporate image of a company is perceived from the consumers’ perspective, and advertising credibility could play a role in changing consumers’ perceptions. Hence, if advertising credibility is low, then it can cause harm to the image of the company.
• An older study shows that the feeling of being deceived leads to a negative response from consumers towards the marketer. It was also found that "once a deceptive material is used and detected by consumers, honest communication by the company will not improve the consumer’s judgment."

RESEARCH STRATEGY