1) Customer advocacy directly impacts corporate reputation and trust. Banks and other companies with high customer advocacy also have strong reputations. 2) A study found that customers who were advocates gave high reputation scores to banks, while alienated customers gave low scores. 3) Building customer trust and addressing issues that undermine trust, like inconsistent service, can help improve reputation and increase advocacy.

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Customer Advocacy
25
Corporate Image, Trust and
Reputation, and Customer
Advocacy Behavior:
Is There Linkage?
Dr. Michael Lowenstein, CMC, Executive Vice President, Market Probe
Anu Bhalla, Vice President, Customer Advocacy Research, Market Probe
“The purest treasure mortal times afford is spotless reputation”
Othello , William Shakespeare
Corporate trust and reputation matter. In fact, they are every company
and organization’s most valuable assets. Trust and reputation go
hand-in-hand, and need to be protected and enhanced. An excellent
reputation does not necessarily translate to a better bottom line, but
a bad reputation can definitely be damaging to a company’s future.
Any negative hit to a company’s reputation often results in a decline
in consumer trust, and any erosion in trust delivers a negative hit to
business growth. That is not something a CEO wants to treat lightly.
A 2008 study by the CMO Council found that almost 100% of
customers surveyed claimed they would either scale back or terminate
relationships with companies that fail to build customer trust.
Customers need to see that a business is working hard to build a solid
foundation of trust with its customers. For many organizations, the
first and most essential step in building trust is understanding why their
business may not have as positive a reputation as it once had, or should
have.
In the spring of 2010, the Reputation Institute, in collaboration with
American Banker, published results of a study that measured the
reputations of 30 large U.S. banks. The study revealed that the 7,800
U.S. consumers surveyed felt that how a bank is perceived to behave in
terms of its transparency and business dealings accounted for close to
16% of its overall reputation score. This statistic cannot be dismissed.
Governance was the single greatest contributor to reputation. In fact,
it ranked even higher than the company’s products and services as a
contributor to reputation.
©2011 Market Probe, All Rights Reserved

2. The key take-away from the Reputation Institute’s study was that unlike
many other consumer products and services, banks are struggling to
recover from negative sentiment caused by what consumers see as the
financial sector’s role in the recession. In the words of the study, banks
need a theme that “… not only resonates with the public interest but
elevates the sense of esteem, trust, and admiration they engender.”
It is no surprise that the reputation of banks and financial institutions
has dropped significantly since 2009. According to the latest Edelman
Trust Barometer survey of 5,000 adults in more than 23 countries,
less than one-third of Americans trust banks to do what is right. Across
the 20 industries covered by the Edelman study, banks, insurance
companies and financial services rank as the bottom three industries in
terms of consumer trust and reputation. It is clear from this study that
companies in the U.S. financial sector have yet to recover their pre-
2009 trust levels. Consumers just do not trust them. Before the tide
can turn, financials have considerable work to do to rebuild trust levels
among U.S. consumers.
Linkage Between Reputation and Advocacy
Banks often pay lip service to reputation. But reputation carries both
opportunity and risk, not only for the financial services industry but
across all business-to-business and business-to-consumer sectors.
Why is corporate reputation so important? Why must companies
do everything possible to create, optimize and protect perceived
reputation and sentiment? Because if they do not, they will not grow;
and worse, they might not be around for long.
Market Probe’s customer advocacy research approach helps corporate
clients understand how to best leverage the insights into reputation
to go beyond lip service. After all, if a company can influence and
shift customer behavior to grow its reputation, increase trust and
make customers like and respect it for all the good it is doing, can any
organization afford to ignore its advocates?
Market Probe’s studies clearly show the direct connection between
downstream advocacy behavior and customer experiences, service
transactions, strategic relationships, brand positioning and messaging,
and even loyalty program components. There is also direct business
outcome connection between advocacy and corporate reputation and
trust. This finding deserves targeted attention.

3. Our 2010 National Retail Bank Customer Advocacy Study of 7,000
U.S. adults first identified the correlation between customer advocacy
level (Advocate, Allegiant, Ambivalent, and Alienated) and share of
customer. Advocates drive positive business outcomes. Their behavior
is important for banks to understand. It is equally important for
banks to understand what is alienating their customers. If a company
fails to understand its alienated customer segment, it is impossible to
generate change through corporate messaging and value proposition
development.
The greatest insight that Market Probe gained from our
National Retail Bank Customer Advocacy Study is that
advocacy monetizes at a stronger and more consistent rate
than other key customer research measures. A consistent
theme emerged: customer behavior in the marketplace is
a direct reflection of advocacy levels. For all companies,
the question they need answered is: What is your advocacy
level, and is it helping or hurting your reputation?
We found that Advocates have a strong willingness to explore new
products from their primary bank: 50% of Advocates will consider
new products versus only 5% of Alienated customers. Advocates are
virtually certain to have a continued relationship with their primary
bank compared to Alienated customers, who are virtually certain
of not continuing their relationship. When Advocates consider new
products and services, they will do so with their primary bank, while
Alienated customers will look to the competition.
Clearly, banks must pay close attention to whatever elements of
communication, image and experience drive customer behavior.
Earned trust and reputation are high on the list. In Market Probe’s
banking study, a significant degree of variation existed within the
levels of advocacy behavior, as demonstrated for the top 15 U.S.
banks included. Interestingly, but not surprisingly, the banks with high
customer advocacy levels also had strong corporate reputations.

4. Beyond simply creating superior customer experiences, the banks that
earned high levels of advocacy did so in large part because of their
solid reputations and the trust and confidence they created among
their customer bases. One of the key confirming elements of customer
advocacy research is the impact on loyalty behavior, positive and
negative, of informal brand-related communication sent and received
by customers, rather than the traditional ‘push’ messaging engaged in
by companies for decades.
The most recent Edelman Trust Barometer study findings identified the
degree to which customer trust protects or undermines reputation.
When a company is distrusted, 57% of their customers will believe
negative information after hearing it one or two times, compared to
15% who will believe positive information after hearing it one or two
times. Conversely, when a company is trusted, more than 50% of their
customers will believe positive information after hearing it one or two
times, compared to 25% who will believe negative information after
hearing it once or twice. These are compelling findings and further
incentive to look at how a focus on advocacy can not only promote
growth, but also positively improve corporate reputation.

5. Our National Retail Bank Customer Advocacy Study shed further light
on the strong relationship between reputation attributes related to
trust and customer confidence and Market Probe’s advocacy segments.
The attributes related to the elements of reputation and image showed
strong correlations to how our advocacy segments are defined and
how they behave. Those customers who were identified as Advocates
gave high scores to banks they felt demonstrated strong reputation and
image behaviors, while those who felt disengaged with banks provided
lower reputation-based scores.
Advocates Alienated
Is a strong and stable bank 84% 5%
Is a warm and welcoming 81% 1%
Has a good reputation 87% 2%
Has earned my trust and confidence 87% 1%
Always looks out for my best interests 62% 0%
Always treats me fairly 84% 2%
Values my business 70% 0%
They go the extra mile and often impress me 60% 1%
I feel like I belong at this bank 70% 1%
Data shows top two box scores on a 10-point scale
Analysis of two separate banks’ image and reputation-based attributes
offers insight into which elements are important to leveraging
increased degrees of advocacy, and which detract from positive
reputation and may damage a corporate reputation. With
Bank A, there are some moderate image-related negative behavior
drivers or creators of alienation, principally the effect on image of a
lack of consistency. This bank can build greater advocacy levels by
leveraging the impact of a reputation and image by taking proactive
initiatives on behalf of their customers.
Bank A

6. Based on multivariate analysis outputs, it is apparent that Bank B has a
bigger image and reputation challenge. The single greatest contributor
to customer alienation is the inability to earn customer trust and
confidence through service. This type of negative image and reputation
will surely undermine and destabilize this bank’s many customers
who might otherwise be fairly ambivalent about the bank but who
remain customers based on inertia, also creating bank distrust within
other stakeholder groups. Because of its power, this single issue can
undermine bank reputation among the general public, employees,
vendors and even some of the more positive customers.
While Bank B does generate some positive image-related perceptions,
including the sense of customer belonging and image of proactively
being there for their customers as is evident among their Advocates,
the strength of the negativism associated with low trust and confidence
is clearly the first priority for relationship and image fence-mending.
It is imperative that a positive communication and value proposition
plan is developed to offset the damage caused by a lack of trust and
confidence in the bank.
Bank B

7. The Power of Trust, Reputation and Advocacy
It should be noted that these findings on the impact of image and
reputation and their relationship to advocacy are not unique to the
financial services industry. In truth, virtually every company in every
B2B and B2C industry is vulnerable to reputation attack and resulting
business impact. As noted by Dr. Leslie Gaines-Ross, Chief Reputation
Strategist for international public relations firm Weber Shandwick:
“There is an increasingly critical connection between brand and service
promise, corporate and brand reputation trustworthiness, the transactional
experience (as delivered by people, processes, communications and culture), and
downstream customer behavior. Any small ripple in reputation change (such
as through a product-related issue, online rumor or executive miscue), brand
performance or customer service can have a tsunami-like effect on business
outcomes which may last indefinitely.This is especially true now because of the
permanency provided by social media.” 1
To further illustrate this point, we look at research results for a high-
tech B2B company to demonstrate again that customer Advocacy levels,
regardless of industry or business type, impact reputation and image.
Market Probe gathered customer insights related to key elements of
reputation and image including stable company, positive reputation,
reliability, trustworthy company, industry expertise, market leadership,
stands out from competitors, investment in the future, as well as
related areas of performance that contribute to relationship-building
such as ease of doing business, risk reduction, strategic relationship
management, understands business objectives.
Our study demonstrates both the challenges and the opportunities
inherent in customer advocacy-building. Among the image, reputation
and relationship diagnostics, the one that leveraged positive behavior
the most was “Reduces commercial risk.” This is a performance
component which definitely speaks to a greater need for better
customer assurance and trust-building – a significant attribute
that drives corporate reputation. The level of trust and reputation
that customers had in this case study are equally driving a negative

8. corporate reputation for their customers. The combination of these
two reputation elements strongly suggests that this company has its
improvement priorities well identified. They need to specifically
determine what is behind their poor image and then initiate a tactical
and strategic corporate communications program with stakeholders
to turn the situation around, as represented by two diagnostics in the
graphic below.
Concluding Thought
Ms. Leslie Gaines-Ross offers a fitting final observation on the
increasing importance of trust and reputation on stakeholder behavior,
and how to protect and enhance it:
“Going forward, to generate lasting trust, positive reputation, and continued
consumer confidence for brands, products and services, companies will need to
focus on customer-centric leadership, as well becoming more transparent and
authentic. They will have to ramp-up inclusion of employees and customers,
and more actively engage in offline and online dialogue with all stakeholders,
particularly their advocates. Successful companies will, at the end of the day,
stress inside-out and outside-in advocacy in all of their actions and processes
to both drive positive business outcomes and be accountable to all of their
constituents – even the virtual ones.” 1
Market Probe understands both the power of enterprise image and
reputation and the important linkage of perceived corporate trust
and reputation to customer advocacy behavior. We have developed
actionable tools and techniques through our SHARE+ advocacy
research framework and targeted analyses to help companies protect
and enhance their reputations.
1 Afterword, from The Customer Advocate and The Customer
Saboteur, Michael W. Lowenstein, ASQ Press, 2011