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Play It By Trust: Ethical marketing - can we do it?


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Presentation given to the CIM Kent branch - May 2009

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Play It By Trust: Ethical marketing - can we do it?

  1. 1. Play It By Trust Ethical marketing - can we do it? Thom Poole
  2. 2. Agenda <ul><li>What is ethical? </li></ul><ul><li>What is privacy? </li></ul><ul><li>Friendship </li></ul><ul><li>Trust in marketing </li></ul><ul><li>Trust in account management & sales </li></ul><ul><li>Trust on the web </li></ul><ul><li>Competitive advantage of trust </li></ul>
  3. 3. Your market <ul><li>Are you a leader in your marketplace? </li></ul><ul><li>Do you set the standards that others must follow? </li></ul><ul><li>Can you demonstrate a ‘trustworthy’ advantage over your competitors? </li></ul>
  4. 4. What is ethical?
  5. 5. What are ethics? <ul><li>They are the rules or standards governing the conduct by which you live my life and make all my decisions </li></ul><ul><li>They are more like a jigsaw puzzle that is thrown together over time, that when complete makes up who you are and what you believe </li></ul><ul><li>Having a standard of ethics that governs us each day of our lives means we always know how we are to live no matter what </li></ul>
  6. 6. Where do ethical/moral beliefs originate? <ul><li>Taboos and Codes </li></ul><ul><li>Religion and/or Law </li></ul><ul><li>Individual Will, Reason and Social (Collective) Determination </li></ul><ul><li>The N Commandments </li></ul><ul><ul><li>Treat others as you would like them to treat you. </li></ul></ul><ul><li>Individual will versus collective forces </li></ul>
  7. 7. The heart of ethics <ul><li>The integrity and values of the individual </li></ul><ul><li>If you can change the values and increase the integrity of the individual, you will change their ethics </li></ul>
  8. 8. What is privacy? Is big brother watching? Do we really care?
  9. 12. Data privacy <ul><li>How invasive can we or should we get? </li></ul><ul><li>Will our customers accept our efforts? </li></ul><ul><li>Identity theft – a modern problem? </li></ul><ul><li>Invading our personal space </li></ul><ul><li>What can marketing do? </li></ul>
  10. 13. Data privacy – noise! Remember this? A linear model of communication (based on Schramm (1995) and Shannon & Weaver (1962) – from Fill (1999))
  11. 14. Data privacy – the spam debate <ul><li>Does spam give responsible marketers a bad name? YES 70% NO 30% </li></ul><ul><li>Can we control spam without banning it completely? YES 60% NO 40% </li></ul><ul><li>Is opting in to receive email marketing a realistic proposition? YES 50% NO 50% </li></ul>Results of an online survey by the Marketing Society, 2003
  12. 15. Friendship = Trust Friendship = showing or expressing liking, goodwill, or trust Collins English Dictionary. Retrieved 10 July 2003, from xreferplus
  13. 16. Friendship = Trust <ul><li>‘ People buy from their friends’ </li></ul><ul><li>Trust builds loyalty </li></ul><ul><li>Trust will drive profit </li></ul>Trust-focused value chain (adapted from Porter, 1998)
  14. 17. Trust lifecycle Time Level of Trust Unaware Build Trust Confirm Trust Maintain Trust Register/Transact/Confirm Consider/Validation/Assess Browse/Search/Compare Trial Threshold Purchase Threshold Habit Threshold Untrust phase Extrinsic Intrinstic Recommendation © Poole (2005), adapted from Reynolds (2000)
  15. 18. Types of Trust <ul><li>Interaction trust - Based on past experience of direct interactions </li></ul><ul><li>Role-based trust - Defined by role-based relations between the parties </li></ul><ul><li>Witness reputation - Based on reports from witnesses of past behaviour of the agent </li></ul><ul><li>Certified reputation - Based on third-party references provided by the agent </li></ul>Source: Huynh, et al (2006)
  16. 19. How to build trust <ul><li>Be relevant </li></ul><ul><li>Keep your promises </li></ul><ul><li>Don’t always try to SELL, SELL, SELL </li></ul><ul><li>Listen and engage </li></ul><ul><li>Remember who they are, & what they’ve bought/done </li></ul>
  17. 20. Trust tools <ul><li>Customer Relationship Marketing </li></ul><ul><li>Get the information you need to understand the customer </li></ul><ul><li>Exploit your knowledge of the customer </li></ul><ul><li>Extrapolate this knowledge </li></ul><ul><li>Be relevant </li></ul><ul><li>Be person </li></ul><ul><li>Be profitable (for both parties) </li></ul>
  18. 21. Be relevant and engaging <ul><li>Customers want to feel wanted </li></ul><ul><li>Customers want to feel in control </li></ul><ul><li>Customers may not want a relationship </li></ul><ul><li>Customers want a trustworthy partner </li></ul><ul><li>Customers don’t want the hard-sell every time they contact you </li></ul>I We You
  19. 22. The future is about … Relevant Choice Me, Me, Me Me, Me, Me Me, Me, Me Me, Me, Me I want to be unique I want to be unique I want to be unique I want to be unique Give me a choice Give me a choice Give me a choice Give me a choice I want to be in control I want to be in control I want to be in control I want to be in control Be relevant at the right time Be relevant at the right time Be relevant at the right time
  20. 23. Trust in Marketing Abuse demonstrates untrustworthiness, but to demonstrate trustworthiness is more difficult Trust = firm reliance on the integrity, ability or character of a person or thing
  21. 24. Trust in marketing <ul><li>There is no easy formula to gain trust </li></ul><ul><li>But it is, or should be the goal of every company – trustworthiness is profitable </li></ul><ul><li>“ Trust means having the customer comfortable with handing over personal information and engaging in ongoing commercial transactions on a company’s website” (Senia, 2000) </li></ul>
  22. 25. Trust in marketing, cont… <ul><li>Trust is under attack in our society. customers have so much choice these days, which makes it difficult for brands to rise above the incredible number of messages clamouring for the attention of the customer </li></ul><ul><li>“ You can have all the facts and figures, all the supporting evidence, all the endorsement that you want, but if - at the end of the day - you don't command trust, you won't get anywhere&quot; </li></ul>Niall FitzGerald, Chairman of Unilever at the Advertising Association, May 2001
  23. 26. Trust in marketing, cont… <ul><li>A proactive approach to dealing with issues of consumer privacy would involve four major issues: </li></ul><ul><ul><li>Maintaining an ongoing dialogue with consumers </li></ul></ul><ul><ul><li>Educating consumers and promoting privacy efforts </li></ul></ul><ul><ul><li>Creating an industry standard for addressing the privacy issue </li></ul></ul><ul><ul><li>Continuing to lobby for and against government regulation </li></ul></ul><ul><li>These four issues can all increase apparent ‘trustworthiness’ </li></ul>(Nakra, 2001)
  24. 27. Trust in marketing Trusted brands <ul><li>Petrol retailer Shell </li></ul><ul><li>Soft drink Coca-Cola </li></ul><ul><li>Vitamins Centrum </li></ul><ul><li>Pain relief Aspirin </li></ul><ul><li>Cold remedy none (!) </li></ul><ul><li>Toothpaste Colgate </li></ul><ul><li>Hair care Pantene </li></ul><ul><li>Cosmetic Avon </li></ul><ul><li>Skin care Nivea </li></ul><ul><li>Soap powder Ariel </li></ul><ul><li>Automotive Mercedes </li></ul><ul><li>Kitchen appliances Miele </li></ul><ul><li>PC IBM </li></ul><ul><li>Mobile phone Nokia </li></ul><ul><li>Camera Canon </li></ul><ul><li>Holiday company none (!) </li></ul><ul><li>Bank/building society none (!) </li></ul><ul><li>Credit card Visa </li></ul><ul><li>Insurance company none (!) </li></ul><ul><li>Airline BA </li></ul><ul><li>Internet company none (!) </li></ul>Bold = Last year’s most trusted
  25. 28. Trust in account management “… they were always being watched for symptoms of unorthodoxy” ‘ 1984’, George Orwell
  26. 29. Trust in B2B account management <ul><li>For B2B brands to connect with organisational customers, emotional brand values need to be communicated </li></ul><ul><li>Brands based on intangible, emotive characteristics such as trust, reassurance, reputation, image and responsiveness are seen as more durable and less likely to suffer from competitive erosion </li></ul><ul><li>Brand benefits include: </li></ul><ul><ul><li>Ability to charge premium prices </li></ul></ul><ul><ul><li>Loyalty through powerful customer/brand relationships </li></ul></ul><ul><ul><li>Ability to sustain differentiation in crowded markets </li></ul></ul>Joanne Lynch & Leslie de Chernatony, 2003
  27. 30. The Six Pillars of Character <ul><li>Trustworthiness </li></ul><ul><li>Respect </li></ul><ul><li>Responsibility </li></ul><ul><li>Fairness </li></ul><ul><li>Caring </li></ul><ul><li>Citizenship </li></ul>
  28. 31. Trustworthiness <ul><li>Honesty </li></ul><ul><li>Integrity </li></ul><ul><li>Reliability (Promise-keeping) </li></ul><ul><li>Loyalty </li></ul>
  29. 32. Honesty <ul><li>Honesty in communications is expressing the truth as best we know it and not conveying it in a way likely to mislead or deceive. There are three dimensions: </li></ul><ul><ul><li>Truthfulness . Truthfulness is presenting the facts to the best of our knowledge </li></ul></ul><ul><ul><li>Sincerity . Sincerity is genuineness, being without trickery or duplicity </li></ul></ul><ul><ul><li>Candor . In relationships involving legitimate expectations of trust, honesty may also require candor, forthrightness and frankness, imposing the obligation to volunteer information that another person needs to know </li></ul></ul><ul><li>Honesty in conduct is playing by the rules, without stealing, cheating, fraud, subterfuge and other trickery. </li></ul>
  30. 33. Integrity <ul><li>The word integrity comes from the same Latin root as &quot;integer&quot; or whole number </li></ul><ul><li>Like a whole number, a person of integrity is undivided and complete. </li></ul>
  31. 34. Reliability (Promise-Keeping) <ul><li>Avoid bad-faith excuses . Interpret your promises fairly and honestly. Don’t try to rationalise non-compliance </li></ul><ul><li>Avoid unwise commitments . Before making a promise consider carefully whether you are willing and likely to keep it </li></ul><ul><li>Avoid unclear commitments . Be sure that, when you make a promise, the other person understands what you are committing to do </li></ul>
  32. 35. Loyalty <ul><li>Limitations to loyalty </li></ul><ul><li>Prioritising loyalties </li></ul><ul><li>Safeguarding confidential information </li></ul><ul><li>Avoiding conflicting interests </li></ul>
  33. 36. Ethical account management <ul><li>“ People buy from their friends” </li></ul><ul><li>Open, trusting, honest </li></ul><ul><li>“ I don’t want a ‘relationship’ with your company!” </li></ul><ul><li>Listen </li></ul><ul><li>Encourage & lead by example </li></ul>
  34. 37. Procurement behaviour low high high Procurement skills Business skills Butterfly buyers Strategic purchasing professionals Order takers Rottweiler buyers buy on value buy on cost buy on price
  35. 38. Trust on the Web Ethical marketing - can we do it? Thom Poole
  36. 39. Online Distrust <ul><li>Swindling customers into a sale does not make for loyal customers. Instead, e-commerce sites should try to improve the user experience for the 95% of users who visit the site without making a purchase. </li></ul><ul><li>Spam is the bane of modern life, with over 90% of all e-mail classified as spam </li></ul><ul><li>Phishing is on the increase - trying to grab personal details </li></ul>
  37. 40. Online Trust <ul><li>On the web authentication and credibility are critical, as are context driven notions of trust </li></ul><ul><li>Without trust the Web wouldn’ t function; exchanges of resources or information require all sorts of risk-taking. But what do we get in return for the risk? </li></ul><ul><ul><li>One clear function of trust is as a method of complexity reduction </li></ul></ul>(Luhmann, 1980)
  38. 41. Question(s) of Trust <ul><li>How should trust be represented, maintained and repaired on the Web? </li></ul><ul><li>What variables are important? </li></ul><ul><li>Will these change as we move from human to artificial agents? </li></ul><ul><li>What sort of institutions and methods will globalise online trust? </li></ul>
  39. 42. Perception <ul><li>One review of online trust discerned three perceptual factors that were particularly relevant </li></ul><ul><li>Perception of credibility is to do with: </li></ul><ul><ul><li>Honesty </li></ul></ul><ul><ul><li>Expertise </li></ul></ul><ul><ul><li>Predictability </li></ul></ul><ul><ul><li>Reputation </li></ul></ul><ul><li>Ease of use relates to the simplicity and design of the website </li></ul><ul><li>Risk is the perceived likelihood of an undesirable outcome </li></ul>(Corritore, et al., 2003)
  40. 43. Trustworthiness <ul><li>Risk is a pervasive issue with trust, but the other two factors are strongly connected to the gathering and evaluation of signals of trustworthiness </li></ul><ul><li>Credibility signals are designed to display the trustee’ s expertise, but ease-of-use signals, which include: </li></ul><ul><ul><li>A well-designed site </li></ul></ul><ul><ul><li>Avoiding pitfalls as bad spelling and dangling links </li></ul></ul>
  41. 44. Encouraging Trust <ul><li>An earlier study found six major features that encouraged trust in e-commerce sites: </li></ul><ul><ul><li>The site’ s brand </li></ul></ul><ul><ul><li>Seals of approval </li></ul></ul><ul><ul><li>Ease of navigation </li></ul></ul><ul><ul><li>A fulfilling ordering experience </li></ul></ul><ul><ul><li>The site’ s presentation </li></ul></ul><ul><ul><li>The technologies used to create the website </li></ul></ul><ul><li>These are strongly connected with the signalling systems characteristic of local trust </li></ul>(Cheskin Research, 1999)
  42. 45. Social Trust <ul><li>One property of trust that is important in social networks, and which has been frequently overlooked in the past, is the personalisation of trust </li></ul><ul><li>Trust is inherently a personal opinion </li></ul><ul><li>Two people often have very different opinions about the trustworthiness of the same person </li></ul>
  43. 46. The competitive advantage of trust “The marketing art of the opt-in” “Being trustworthy is profitable”
  44. 47. The marketing art of the opt-in <ul><li>Research I carried out within O 2 indicates customers could be encouraged to opt-in and therefore interact </li></ul><ul><li>Keeping within the ‘RFM’ (recency, frequency, monetary value) boundaries is likely to increase trustworthiness </li></ul><ul><li>Creative ideas for encouraging opt-in and increasing interaction will always win </li></ul><ul><li>Trust is a two-way process, and we as marketers must feel that our customers are trustworthy too </li></ul>
  45. 48. Getting your nose in front …
  46. 49. … but so is everyone else!
  47. 50. The Trust Checklist Not the answer - just more questions …
  48. 51. The Ethical SWOT <ul><li>Checklist is ever evolving </li></ul><ul><li>Block the weaknesses </li></ul><ul><li>Constant improvement </li></ul><ul><ul><li>Block the threats </li></ul></ul><ul><ul><li>Create/maintain a competitive advantage </li></ul></ul><ul><li>Exploit the strengths and grow the opportunities </li></ul>
  49. 52. Ethical SWOT Checklist <ul><li>trust </li></ul><ul><li>satisfaction </li></ul><ul><li>complaints </li></ul><ul><li>active education </li></ul><ul><li>customers </li></ul><ul><li>workers </li></ul><ul><li>authorities (standards) </li></ul><ul><li>legislation compliance </li></ul><ul><li>international </li></ul><ul><li>empowerment </li></ul><ul><li>customers </li></ul><ul><li>care agents (complaints) </li></ul><ul><li>opt-in </li></ul><ul><li>competitors </li></ul><ul><li>spam blocking/clarity of policy </li></ul><ul><li>privacy policy in general </li></ul>S W O T
  50. 53. Thank you For your interest & attention Thom Poole [email_address]