2009 Special Midyear Trust Survey
August 3, 2009
Overview •
Conducted a special abridged version of the annual Edelman Trust Barometer. We surveyed 1,675 opinion leaders in six of the world’s largest markets: China, France, Germany, India, UK and US.
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To gauge impact of last six months – the bankruptcies, bailouts, nationalizations, and exec comp scrutiny-- on trust in business and brands:
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Has business regained its footing?
•
Who are opinion leaders looking to for leadership to solve key societal issues– business or government?
•
What are the new expectations for business and its role in society?
•
How do companies restore lost trust?
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How does trust – or the lack of it – affect product brand decisions?
January 2009 In U.S., trust in business was at lowest level, including post-Enron How much do you trust business to do what is right? 60%
58%
US
20-point drop
UK/France/Germany
55%
53% 51% 49%
50%
Enron, the dot-com bust and September 11 45%
44%
48%
48%
44%
41% 40%
40% 38%
38% 36% 35%
36% 36%
34%
35% 32%
30%
2001
2002
2003
2004
2005
Informed publics 35-64 in the United States and UK/France/Germany Responses 6-9 only on 1-9 scale; 9=highest 3
2006
2007
2008
2009
July 2009 Trust in business stable to up How much do you trust business to do what is right? Jan 09
Jul 09
100% 90%
+12
80%
+11
71%
75%
70%
62%
60%
60%
48%
50% 40%
46%
44%
41%
39%
36%
34%
30% 30% 20% 10% 0% US
UK
France
Germany
India
China
The 12-point increase in U.S. includes the younger sample of 25- to 34- year-olds, whose overall trust in business increased 26 points in six months. Informed publics ages 25 to 64; responses 6-9 only on 1-9 scale; 9 = highest 4
Trust in government stable to up
How much do you trust government to do what is right? Jan 08
Jan 09
Jul 09
100%
+13
90%
+12
80%
74% 72%
78%
70% 60% 50%
55% 43%
42%
40%
35%
40% 38%
38%
30%
44%
40%
44% 42%
36%
34% 26%
30% 20% 10% 0% US
UK
France
Germany
India
China
The 12-point increase in U.S. includes the younger sample of 25- to 34- year-olds, whose overall trust in government increased 24 points in six months. Informed publics ages 25 to 64; responses 6-9 only on 1-9 scale; 9 = highest 5
Why? Tangible, quantifiable actions
Would you trust a company more or less if that company took this action?
Repaid bailout or loan money to the government
81%
Reduced CEO and executive pay
80%
Fired non-performing management teams
78%
Closed non-profitable business units
62%
Reduced marketing budgets
61%
Continued to spend money on philanthropy
58%
0%
10%
Informed publics ages 25 to 64 Responses 6-9 only on 1-9 scale; 9=highest 6
20%
30%
40%
50%
60%
70%
80%
90%
100%
July 2009 The state of trust in six countries How much do you trust each institution to do what is right? NGOs
Business
Government
Media
100% 90% 80%
78%
75% 70%
67%
70%
60% 60% 50% 40%
51% 48% 42% 37%
52%
51% 44% 38%
55%53%
46% 41%40% 35%
50%
44% 39% 39%
28%
30% 20% 10% 0% US
UK
France
Germany
Informed publics ages 25 to 64; responses 6-9 only on 1-9 scale; 9=highest 7
India
China
January 2009 In U.S., trust in every industry had declined; banks and automotive led the way 100%
-33
How much you trust businesses in each of the following industries to do what is right? -27
90%
2008
2009
80%
80% 73% 70%
64% 60%
54% 50%
49%
50%
30%
62% 63%
58%
60%
40%
73%
69%
42%
33%
31%
54%
49%
44%
36%
54%
33%
25%
20% 10% 0%
Informed publics ages 35 to 64; responses 6-9 only on 1-9 scale; 9=highest 8
40%
42%
Technology most trusted industry in five of the six countries How much do you trust businesses in each of the following industries to do what is right? 100%
Technology #3 in France (66%)
90%
81%
80% 80%
72%
72%
71%
70%
93% 86%
88% 84%
69%
62% 56%
60%
50% 40% 30%
20% 10% 0%
US
Technology
UK
Food
France
Germany
Healthcare
Biotech/life sciences
Informed publics ages 25 to 64; responses 6-9 only on 1-9 scale; 9 = highest 9
India
China
Retail
Banks
But We’re Still in the Middle of the Game
Reputation of MNCs struggling in West How would you describe the overall reputation of large global businesses?
71%
69%
100% 90%
12%
30%
29%
24%
13%
5%
5%
2%
1%
10%
Reputation rated good or excellent
12%
Excellent
24%
Good
28%
Neither good nor bad
23%
25%
24%
80% 70%
19% 60%
59%
59%
18%
24%
50%
22% 40%
29% Fair
30%
37% 12%
20%
17%
10%
34% 17%
24%
Poor
10% 0%
34%
10%
1%
1%
India
China
US
Germany
Informed publics ages 25-64 in six countries; Responses Excellent, Good, Neither good nor bad, Fair, and Poor 11
France
UK
Business is not doing enough to help solve economic crisis 100%
90% 80% 70%
Has government intervened enough in global business?
Have global businesses cooperated enough with government?
60%
55%
50%
40% 40%
38% 33%
30%
20% 20%
9%
10% 0%
Too much
Right amount
Not enough
Too much
Informed publics ages 25-64 in six countries; responses Too much, The right amount and Not enough 12
Right amount
Not enough
“The social responsibility of business is to increase its profits.� Milton Friedman, 1970
Stakeholder, not shareholder, world
How important do you believe the interests of each of the following stakeholders should be to a CEO’s business decisions? 100% 90% 80%
70% 70%
58%
60%
49%
50%
45% 40%
40% 30%
26%
20% 10% 0%
Customers
Employees
Investors
Society
* Communities where the business operates Informed publics ages 25-64 in six countries Extremely important responses only
14
Local Communites*
Government
“Hard and soft� measures needed to rebuild trust Would trust a company more or less for taking each of the following actions?
Treat employees well
94%
Keep producing quality products and services
93%
Transparent and honest business practices
93%
Communicate frequently and honestly
91%
Create and keep jobs
90%
Drive better innovation
89%
Make progress on environmental initiatives
82%
Partner with third parties to solve major global problems
82%
Increase profitability and performance
82%
Commit resources to the public good
81%
Reduce the gap between CEO and average workers pay
78%
Pay senior executives mostly in stock
75%
Communicate messages through multiple media channels
70%
Eliminate financial incentives for taking risks
70%
Discount pricing
69%
CEO appearances
69%
Increase shareholder value
66%
Protect profit margins
43% 0%
10%
Informed publics ages 25-64 in six countries Responses 6-9 only on 1-9 scale; 9 = highest 15
20%
30%
40%
50%
60%
70%
80%
90%
100%
Business expected to take on global issues
How important do you believe it is for business to do each of these things?
85%
84%
82%
Manage business Ensure efficiency of Create solutions to operations to ensure business operations reduce energy costs companies survive global economic crisis
80%
Cooperate with government to help solve the global economic crisis
Informed publics ages 25 to 64 Responses 6-9 only on 1-9 scale; 9 = highest 16
76%
75%
Provide access to affordable healthcare
Create solutions to minimize global warming
73%
Promote free trade
But MNCs have not taken enough action Have global businesses taken too much, the right amount, or not enough action on each of these things?
“NOT ENOUGH� In U.S.: 62%
In U.S.: 68%
71%
70%
In U.S.: 65% 64%
In U.S.: 55% 55%
Create solutions to minimize global warming
Create solutions to reduce energy costs
Provide access to affordable healthcare
Informed publics ages 25 to 64; not enough responses only 17
Cooperate with government to help solve the global economic crisis
In U.S.: 57% 52%
Manage their business operations to ensure that their companies survive the global economic crisis
In U.S.: 56% 49%
Ensure efficiency of business operations
The Role of Trust in Product Marketing
Informed publics more likely to switch brands because of something positive they read, saw, or heard about that brand Have you taken any of the following actions in relation to product or service brands that you use?
Switched brands because of something positive you read, saw or heard about that brand
62%
Switched brands because another brand cost less
53%
Switched brands because of something negative you read, saw or heard about that brand
48%
Switched brands because you stopped trusting a brand
45%
Lost trust in a brand because of poor financial performance of the parent company
33%
Connected with a brand through a social networking site
29%
Informed publics ages 25 to 64 in six countries Yes responses only 19
In recession, cost only marginally more important than trust
Quality, reliability, and past personal experiences most important factors in determining how much one trusts a product or service brand How important are each of the following factors in determining how much you trust a product or service brand? Quality
96%
Reliability
94%
Past personal experiences
94%
Safety
90%
Value
88%
Company reputation
83%
Innovation
81%
Recommendation from friends or family
79%
Recommendation from a person like you
75%
Association with a good cause
68%
Recommendation from an expert
67%
Financial performance
59%
Positive media coverage
57%
Advertisements
42%
Endorsement by a public figure
39%
Endorsement by a celebrity
22%
Informed publics ages 25 to 64; responses 6-9 only on 1-9 scale; 9 = highest 20
Study conclusions •
Trust has either stabilized or risen, but we’re only in the middle of the game
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Tangible, quantifiable corporate actions have led to trust rise – repaying loans, cutting executive comp, firing poor management
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Moving from shareholder to stakeholder world
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“Hard and soft” measures rebuild trust – quality products, treating employees well, transparency, frequent communication
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Business expected to partner with government and NGOs to address economy, energy, environment, healthcare
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Trust plays key role in brand choices
The way forward for business •
No quick fix through a single set of actions: long-term proposition
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Play a broader role in society; collaborate more
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Balance investor interests with customer and employee interests
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Square mutual social responsibility and shared purpose with profit-making strategy
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Communicate frequently and transparently
A Ten Year Overview of Trust
The 2009 Midyear Edelman Trust Survey was produced by research firm StrategyOne. Methodology: The survey consisted of 15-minute telephone interviews from May 26 to July 3, 2009. The survey sampled 1,675 informed publics in two age groups (25-34 and 35-64) in six countries: U.S., U.K., France, Germany, China, and India. The respondents were college-educated, in the top 25% of household income per age group in each country, and reported significant media consumption and engagement in business news and public policy. U.S.: N= 500 (ages 25-34: n=100; ages 35-64 n=400) China: N=375 (ages 25-34: n=75; ages 35-64 n=300) U.K., France, Germany, India (per country): N=200 (ages 25-34: n=50; ages 35-64 n=150)
For more information on the Edelman Trust Barometer and to view past results, please visit www.edelman.com/trust.
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2009 Special Midyear Trust Survey
August 3, 2009