Dennis D. Estopace / Reporter
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| IN PHOTO -- PR CONGRESS OPENS - Bob Grove, managing director of Edelman Southeast Asia, gives a presentation at the opening of the 18th National PR Congress on Thursday. --ROY DOMINGO |
HONESTY
remains the best policy to gain customer trust and shore up share
prices, according to the CEO of the company that created the “trust
barometer.”
“You
may have a bad PR [public relations] but having an honest leader telling
people what they’re really doing so that the bad things won’t happen
again evokes trust because it shows the leadership is on top of what’s
happening,” Bob Grove of Edelman told the BusinessMirror in an interview
late Wednesday.
Grove, managing
director for Southeast Asia of the consultancy firm Edelman, spoke on
trust and the global PR industry at the 18th National PR Congress on
Thursday, where he emphasized the importance of honesty and transparency
in running a business.
Citing
studies, Grove said share prices of companies that were able to regain
consumer trust from a failed product recovered when their leaders
immediately apologized to the public, explained the situation and bared
the steps to rectify.
“Those that showed decline in share prices were companies that were slow to react, the leadership wasn’t involved and didn’t show the whole story,” he said.
Grove
explained that the market punishes such companies because their actions
after a crisis suggest the strength—or weakness—of its leaders. “They
always ask, ‘Should I trust my money on these guys?’” he said.
Just
recently, Edelman’s “trust barometer” showed business in the United
States suffering a decline in trust from 54 percent last year to 46
percent this year.
But,
according to Grove, businesses in Southeast Asian countries, which were
excluded in the survey, are considered highly trusted. Grove, who has
spent time in Asia since 1993, cited companies in South Korea as having
credibility among consumers even outside its territory.
This
is a feat in itself, he said, since high levels of trust are usually
given to businesses mostly from Europe, like Germany and Sweden.
Technology
companies consistently scored high levels of trust, whether in the
Edelman’s poll or the recently released Trust Index by local PR firm EON
Inc.
“That’s the
key differentiator today, technology,” said Grove, who added that the
advent of social media and synchronicity of traditional and online media
give consumers the power to make or break a company.
He said a consumer can become a company’s spokesman via the online social media and mobile phones.
“We’ve
discovered that trusted companies sold more product than distrusted
companies. Eighty percent of consumers won’t buy products and services
from companies they don’t trust, whereas 70 percent will buy in a
company they trust. It’s now a reality,” he said.
In
times of crisis, he said companies should act quickly—“within the
hour”—adding that “companies that weren’t able to recover were the
companies that had leaders not communicating fast and honestly.”
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