GUILLERMO FERNANDEZ Associate Director
In a world where global supply chains and markets are the norm, trustworthiness is increasingly the currency facilitating business – for example, we’re more likely to buy our products and services from sources we feel we can rely on. In this context, global corporations need to ensure they maximise the level of trustworthiness generated through their many touchpoints with customers (such as their brands, communications, websites or the services they provide) and that they maintain the required reliability over time.
For big companies, touchpoints need to work in harmony, building a consistent narrative in order to maximise their appeal and credibility – it’s no good running adverts about how concerned you are about the environment and then packaging your products in excessive amounts of single-use plastic. Attributes or equities attached to one entity (such as an organisation or brand) can be transferred (or ‘flow’) to another entity through stakeholders’ understanding of the relationship between the two. For instance, if I like my iPhone and think that Apple works to keep my data safe, and designs products that fit my needs, I might then be more likely to use Apple cloud storage or Apple Music. Equity can be said to flow when associations or feelings about one entity impact the associations or feelings about another with which it has a relationship.
If you are a large food manufacturer with numerous consumer-facing brands looking to build trust through a commitment to sustainability and engagement in the local communities where you operate, there are two main avenues to achieve this: your corporate brand and your product brands.
Focusing on your corporate brand may have the effect of the positive (or negative) associations trickling down to your client-facing product brand, increasing favourability, willingness to recommend and purchase. However, this effect is limited if consumers do not connect the parent company with their brands – it is little use knowing that Unilever is committed to reducing its environmental impact if I don’t know that Magnum is a Unilever brand when I’m standing in the freezer aisle of the supermarket trying to decide what ice cream to buy.
The other option is to begin at the other end of the spectrum, and ensure your product brands reliably deliver on your strategic vision of sustainability and responsibility. Due to equity flow, your overall corporate brand can be positively affected. This could translate into increased support from stakeholders who are knowledgeable about your product portfolio and are looking to, for example, recommend your company as an investment. In practice, if you produce goods sustainably, and there is a clear connection with the entity behind them, you’re more likely to be seen as a sustainable company.
The challenge is that equity flow means that it is not enough to talk the talk. If either end of the line is at odds with the image you are trying to portray you may be seen as inauthentic and suffer as a result.
For any organisation with a brand portfolio, equity flow is part of the commercial case for investing in building reputation.Companies that actively and consistently build trust amongst consumers across their entire spectrum of brands gain greater marketing efficiency. They face fewer headwinds in marketing and selling their products and services, have more effective advertising due to higher believability, and can charge a premium for their products.