For the first time, trust and transparency are as important to corporate reputation as the quality of products and services, according to the 2010 Edelman Trust Barometer. In the U.S. and most of Western Europe, these two attributes rank higher than product quality and far outrank financial returns, which sit at or near the bottom of 10 criteria in all regions.
This is in stark contrast to 2006, when financial performance was in third place in a list of 10 attributes shaping trust in the U.S. “We’re seeing a vastly set of different factors driving reputation than we did 10 years ago,” said Richard Edelman, president-CEO of Edelman, one of the largest independent public relations agencies in the country, in a news release. “Trust is now an essential line of business to be developed and delivered.”
The telephone survey, which was released late last month, took the pulse of 4,875 people in two age groups (25-34 and 35-64). Everyone involved in the interviews met the following criterion: household income in the top quartile for their age in their country and read and watch business/news media at least several times a week.
Overall, global trust in U.S. business grew from 18 points to 54 points, the survey said. But the rise is tenuous, with nearly 70% of respondents saying that companies will revert to “business as usual” once the economy recovers. “There is a concern that short-term actions have been taken only as a result of the [economic] crisis and that government will need to remain a watchdog,” Edelman said. “Companies will have to prove the skeptics wrong and show they can achieve both profit and purpose.”
Academics and analysts are the most credible voices for information about a company, the survey said. However, the credibility of CEOs is rising in many markets, jumping to 26% in the U.S. Despite the climb in credibility, CEOs still rank in the bottom two of the most trusted spokespeople in the U.S.
Reports from industry analysts and articles in business magazines remain the most credible sources of information about a company, at 42% and 47%, respectively. However, the credibility of mainstream media, including television, newspapers and radio, is waning. In the U.S., for example, the credibility of television news dropped from 43 points in 2008, to 20 points in 2010.
The deteriorating reputation of mainstream media comes amid the rapid proliferation of social-media channels online. Listening, which is a key component of trust, is turning into a cost of doing business, as the hard sell goes the way of the Edsel. With that in mind, click here to read “11 Social Media Mistakes Your Company Must Avoid” (hat tip to Business Insider).