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Reducing the Corporate Trust Deficit: CEO Leadership Needed Now

April 26, 2016

TORONTO, ON – April 26, 2016 – The Environics Communications CanTrust Index launched today; a study of levels of trust Canadians have in a range of organizations, leaders and industry segments, with a focus on the general public, newcomers and primary household shoppers. The Canada-focused study asked people to rank on a seven-point scale according to their trust in each entity’s ability to “do what is right for Canada, Canadians and our society.” Respondents chose not-for-profit organizations as the most trusted organizations (59%), followed closely by news media (54%) and then small to medium-sized corporations (44%), with large corporations significantly lagging (29%).

Trust is highest in leaders who are local and communicative

Canadians place the most trust in their own CEO / most senior boss at work (52%), followed by their Mayor (50%), then the Prime Minister (46%). There is no particular sign of a “Trudeau halo” although the Prime Minister ranks 12 points higher than the collective score for Premiers (34%). Popular Mayors in Calgary and Toronto help boost the national score for that category.

According to respondents, the best way for an organization to build trust is to create jobs and invest in the local community (69%), followed closely by their own enjoyment of products or services (68%), open and accessible leadership (67%) and Canadian ownership (64%). Local charitable giving (56%) comes next and leaders who use social media channels is listed by 32% as important in determining trust.

“Size and distance are barriers to trust and actions speak louder than words,” said Bruce MacLellan, CEO of Environics Communications Inc. “Trust is fundamental to engaging people in your brand and mission, and while the most cited actions to build trust are local investments and great products or services, open and accessible leadership increasingly plays a major role,” he added.

When looking at trust in organizations, newcomers (in Canada for 15 years or less) are more likely than others (37% compared to 29% overall) to trust large corporations to do what is right. Similarly, it appears that there is a greater degree of trust among newcomers in government (46% compared to 40%). The findings suggest a continuing belief in the role for government in society, consistent with Canadian traditions favouring “peace, order and good government.”

“This study reinforces that leaders play a key role in organizational trust and they will increasingly need social media skills as part of their toolkit,” said Dr. Tandy Thomas, Assistant Professor of Marketing at the Smith School of Business at Queen’s University, and a frequent commentator on how consumers navigate marketplace decision-making. “We live in a culture of choice and conversation overload, and now more than ever it is crucial for marketers to understand who consumers trust, and how to build that trust.” 

A trust deficit in Canadian industries, both old and new

None of the industries measured by the survey enjoy a high degree of public trust, with broadcasting and streaming companies topping this list, but only garnering the trust of 44% of those surveyed. Food retailers (43%) and banks (40%) come next, followed by online shopping companies (37%), telecommunications and cable TV firms (35%) and pharmaceutical companies (34%). Social media platform companies (26%) tied with energy, pipelines and resource companies (26%) to score lowest.

When examining only the 74% of Canadians who use Facebook at least weekly, trust levels remain lowest in this group for social media platform companies and energy, pipeline and resource companies.

In general, Quebecers and newer Canadians are more trusting of most sectors. A sizeable minority (29%) of all Canadians, and fully one-third of primary shoppers (33%), say they have no trust in any of the aforementioned industries. Notably, primary shoppers are slightly less trusting (by 2%) in social media platforms, in the energy industry, and in telecommunications when compared to the Canadian average.

We trust our friends, and then ourselves

Trust in word-of-mouth (WOM) / recommendations by someone you know is the most trusted source of information when it comes to a product, service, brand or organization, at 75% of Canadians, according to the CanTrust Index. Following closely is direct sampling of a product or service (73%) along with editorial content such as a story in a newspaper or shared online (55%) and consumer opinion or reviews posted online (51%). In comparison, trust in traditional advertising and online advertising is relatively low at 31% and 24% respectively.

Trust in blogs and bloggers is another growing source of influence as these channels become a frequent source of recommendations for consumers. Just over a third of Canadians (34%) trust blogs from bloggers they follow. In a similar study carried out by Environics Communications in 2010, only 10% of respondents mentioned blogs as a source that would influence their purchasing decisions. Trust in blogs is high among new Canadians (43%). By age segments, Canadians ages 18-49 have the highest trust in blogs (40%) compared to people 50+ (24%).

“Individuals who prefer to consume content on Facebook are significantly more likely to deem the use of social media by leaders as important — 46% vs. 32% — in building trust for corporate reputations and their products,” said Vanessa Eaton, a Senior Vice President at Environics Communications. “Audience analysis, engagement and interaction with influencers have become more important than ever,” she added.

Other highlights of the study:

Quebecers (44%) are significantly more likely to trust large corporations than the national average (29%). On the other hand, fewer than two out of 10 people in Western Canada (19%) say they trust big businesses, and Canadians 50+ are similarly distrusting (23%).

While young adults 18-24 appear to be more trusting than other age cohorts of various organizations, they also appear to be the least trusting of the news media (44% vs. the overall 54%).

Overwhelming numbers of Canadians (79%) believe companies should obtain third party or government inspector verification of their product quality promises. Newcomers have even higher expectations, with 83% indicating a desire for external verification.

More than eight in 10 Canadians (84%) say they consult online product reviews before buying a product, and among this group 90% (and 95% of newcomers) have made a purchase- or non-purchase decision based on a review they’ve read.

“Consumers are giving more and more credence to non-traditional sources of information, such as online reviews and blogs,” said Dr. Thomas. “It is thus imperative to understand how these consumer-to-consumer dynamics are changing the consumption landscape.”

About the CanTrust Index

The Environics Communications CanTrust Index is based upon an online survey of a sample of 1,001 Canadians 18+ years of age conducted between February 29 to March 7, 2016. It is nationally representative by region, age and gender. The subsample of new Canadians (with 15 or fewer years in Canada) was 151. The subsample of primary shoppers was 562.

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