Firms that lose credibility in responsibility during periods of crisis experience a drop in consumer preference that is seven times greater than those that maintain trust, a new study by the Sustainable Brand Index (SBI) has found.
The study, which gathered data from 1,400 brands across Nordic markets over a 12-year period, found that companies face strong negative reactions from their consumer base when trust in their responsibility drops – indicating the level to which ‘sustainability has transformed from a profile issue to a pure business insurance’.
According to the study, the connection between responsibility and customer preference has doubled over the past four years, to the extent that consumers punish perceived lack of responsibility more harshly than they reward new initiatives and campaigns.
Firms that reduce their level of responsibility build up a ‘measurable debt’ with consumers, which can lead to a drop in customer preference for a period of as long as 24 months.
Brand responsibility
“Responsibility is no longer a ladder to climb higher, it is a floor to not fall deeper,” commented Erik Elvingsson Hedén, founder of Sustainable Brand Index.
“Our data shows that in a crisis it is almost impossible to lose in the perception of responsibility without also bleeding in brand preference. The brands that wait to build their responsibility capital until the crisis is here have already lost.”
With inflation continues to weigh on the minds of households, consumers’ attention is increasingly shifting from global climate priorities to local and social justice, with social responsibility overtaking environmental responsibility as a key driver of brand preference, according to SBI.
‘Issues of fair working conditions and reasonable pricing now outweigh traditional environmental messages,’ it noted.
Customer preference
SBI’s study also highlighted brands that have either maintained or improved both responsibility perception and customer preference during recent challenging years, including Nordnet, Willys, Volvo, IKEA, Champion, Systembolaget, Kopparberg’s and XXL.
Brands going the other way include Marabou, Zara and H&M, where ‘sharp drops in perception of responsibility have correlated directly with deep drops in preference’, according to SBI. Read more here.
