Trust and credibility is very important indeed

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Recently Julia Gillard has started to ask “who do you trust?”

”I’m happy now and in the 2013 election to say ‘who do you trust to manage the economy in the interests of working people?’,” Ms Gillard said…

This echoes the same question that John Howard asked following the “children overboard” affair and the failure of the allied invaders of Iraq to find weapons of mass destruction. It was also in the context of Mark Latham and the 2004 election, where the Liberal strategy was to highlight economic and national security, and in so doing, changing the meaning of trust from being related to truth, to being related to reliability.

Gillard’s trust motif also links to Labor’s last big promise from the 2010 election: the budget surplus. This is almost an article of faith for Swan and the other members of Labor’s senior economic team. There is a perception that the surplus is a totemic issue linked to who Australians believe can manage the economy better.

The good news is that Gillard and Swan have started to talk about the economy in terms of “who can manage the economy in the interests of working families, which I’ve argued is essential. Gillard’s trust talk also links the idea of other traditional Labor “category” strengths, such as jobs, health, education and climate change.

The bad news is that the cuts being made to government investments to achieve the budget surplus is massive — more than 2% of our GDP (and as much as 3%). So big in fact that the sudden and massive withdrawal of funding to the economy could cause a recession. There’s no doubt that the timing of this budget surplus is politically motivated; Labor made a promise to get into surplus, and so Wayne Swan et al are determined to get one.

But that’s the price of “trust”.

And to a certain extent, Gillard and Swan (and their advisors) are right to focus on trust. This is despite Peter Brent  declaring that “I don’t believe politicians telling lies in election campaigns is particularly damaging because voters are long used to it.”

The reason that Brent is wrong on the trust issue is not just because I disagree. There’s very important research into the value of trustworthiness.

Researchers Tulin Erdem and Joffre Swait, from (respectively) the Haas School of Business, University of California, Berkeley and the University of Alberta, have written a paper titled Brand Credibility, Brand Consideration and Choice.

In short, their research shows that  brand credibility affects brand choice and consideration — and those effects are across a broad array of product categories.

In general, it is found that trustworthiness, the subdimension of brand credibility relating to consumers’ perceptions of firms’ willingness to carry through on promises made, exerts a more important impact than expertise (firms’ perceived capability to deliver on promises) on respondents’ brand consideration and choice.

Erdem and Swait argue that credibility is the most important characteristic of positioning, and most importantly, increases the probability that the credible brand will be chosen over the less credible brand.

Organisations (businesses, producers, parties, etc) can use a number of signals for credibility, but this happens in a historical context, and consumers (or voters) take in those signals based on the sum of the past behaviours of the brand. This means that the credibility signals are interpreted through the prism of the brand’s reputation.

Credibility is broadly defined as the believability of an entity’s intentions at a particular time and is posited to have two main components; trustworthiness and expertise. Thus, brand credibility is defined as the believability of the product information contained in a brand, which requires that consumers perceive that the brand have the ability (i.e., expertise) and willingness (i.e., trustworthiness) to continuously deliver what has been promised (in fact, brands can function as signals since—if and when they do not deliver what is promised—their brand equity will erode). Both the expertise and trustworthiness of a brand reflect the cumulative impacts of associated past and present marketing strategies and activities. The credibility of a brand has been shown to be higher for brands with higher marketing mix consistency over time and higher brand investments. Consistency refers to the degree of harmony and convergence among the marketing mix elements and the stability of marketing mix strategies and attribute levels over time. The consistency of attribute levels over time—for example, consistency in quality levels—implies low “inherent product variability” (Roberts and Urban 1988), which can be achieved by a dedication to quality standardization. However, the consistency to which we refer is that of the brand positioning in general.

What does all of this mean?

Trust is important, and trust boils down to deliver what was promised (trustworthiness), and consistency (stability of “marketing mix” or in political terms, key messages).

Gillard, Swan and their advisors are doing the right thing. They are trying to keep their promise and deliver the budget surplus that was the cornerstone of their economic platform in the last election. They have continually given a uniform message about the surplus, its importance and desirability. They no doubt believe that their delivery of the budget surplus will highlight their expertise in economic management (for working families) — an important element of brand credibility.

Unfortunately, there are two challenges facing Labor and Gillard in particular.

Firstly, Labor’s brand equity is exceptionally low. Due to the “velcro effect“, Labor’s brand has accumulated the historical baggage of past failures and perceived failures. Labor’s brand reputation is severely damaged. Low credibility means that “brand quality” is perceived to be lower — which basically means that the “quality” of Labor’s policies (mining tax, health reform, carbon price, infrastructure, etc) is perceived to be low.

Secondly, Gillard’s reputation is also severely damaged. The reason trust is so important is that Gillard’s credibility and legitimacy were undermined by her election-eve promise on the carbon tax.

For all my fellow progressives (who support the Clean Energy Future, carbon price, law) arguing that we have emissions trading, not a carbon tax, the unfortunate reality is that it doesn’t matter. It also doesn’t matter that the carbon price was the price extracted by the Greens Party for their support in the minority government negotiations (despite the fact they had already committed to supporting Labor). The widely held perception is that Gillard broke her promise by introducing the carbon price.

Because of this, trust building exercises are the right thing to do. Labor does need to deliver on its promises, demonstrate its expertise, its credibility and communicate consistently.

Talking about “trust” however, is wrong. Brands that have low credibility and a damaged reputation don’t say “trust me”. They build and earn trust through their actions. Gillard’s “trustworthiness” ratings have collapsed, from 49% in 5 July 2010 to just 25% on 2 April 2012. (Abbott meanwhile has stayed at 33% in July 2010 to 32% in April 2012, suggesting that there was never any brand reputation to damage when it comes to credibility, and also pointing to why he didn’t win the last election.)

Remember, Howard’s “trust” slogan was in the context of Latham, who was perceived by the electorate as an unknown. Howard talked about trust while running the L-Plate smear campaign against Latham. Credibility is even more important in brand choice when there is some kind of perceived risk — especially at the early “consideration formation stage”. That’s why it was so effective for Howard to create an early impression about Latham being a big risk, before Labor was able to get their own message out. This is also why Rudd and Labor promoted Rudd so early after his rise to the leadership, broadcasting an Australia Day advertisement telling his story and denying Howard the opportunity to paint him in the same way as Latham.

Tony Abbott is a known quantity for most voters. They know what they’re getting if they decide to vote for him in 2013. It’s a very different situation to Howard vs. Latham. Similarly, the conservative media and commentators talk about Abbott being a “conviction politician” and someone where “you know where he stands” — regardless of his true, weather-vane flip-flopping. In the public arena, it’s “proven” consistency with Abbott versus Labor’s damaged brand credibility.

What I mentioned before, about the brand consideration phase is also important. Consideration and choice are two separate phases that consumers undergo before buying a product (or voters casting a vote). What Erdem and Swait found is that trustworthiness and credibility are important at the choice stage (the stage before the purchase).

They also found that trustworthiness is more important than expertise. Calls by progressives that Labor should just “get on and govern” won’t cut the mustard. The matra that “Labor has passed 200 pieces of legislation through parliament” makes the “expertise” argument, but doesn’t demonstrate credibility; expertise is less important than trustworthiness and credibility.

Labor urgently needs to rebuild trust and credibility. Brand credibility is a key driver of consumer behaviour. And if the Queensland and NSW elections are any guide, credibility is a key driver of voter behaviour as well.

If you are exasperated when political commentators talk about trust and broken promises, remember: credibility and trustworthiness is actually very important.

Note: Ostrich feathers (pictured above) are the ancient Egyptian symbol of truth

3 responses to “Trust and credibility is very important indeed”

  1. Angas Avatar

    Your observations bourne out by the Essential survey

    1. Alex Avatar

      Thanks Angas — I think EMC did some very important work back in 2004 on creating the proper context for progressive organisations (e.g. unions) on how to talk about economics.

  2. Iain Hall Avatar

    I actaully like your post Alex and find it refreshing that at least one Labor true believer can see their party with the clarity of truth rather than the mists of blind hope.

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