The United States has a trust problem. We all agree that it exists – that something is off – but collectively struggle to pinpoint the source. Conspiracists? Racism? Corruption? Moral decline? Each is a symptom of an underlying problem that we must address: using shortcuts to build momentum and establish credibility quickly.
In 2012, Ryan Holiday cataloged these short cuts in his book, Trust Me I’m Lying. He showed simple “tricks” that businesses, leaders, and media use to sway and convince audiences to a preferred perspective. However, relying solely on these marketing sleights of hand while ignoring substance has slowly eroded trust to dangerous levels.
The consequences touch all aspects of society. In 2019, the Pew Research Center’s American Trends Panel showed that this distrust decays their confidence in government, in each other, and politicians’ ability to get work done. Pointedly, Americans considered this trust problem as more dangerous than violent crime, climate change, and racism.1
In November 2020, Two-thirds of U.S. adults believed that their news sources often presented facts in a way that favors one side in 2020 election coverage, according to the Pew Research Center’s American News Pathways project. More than half (56%) say their news sources published breaking information before it was fully verified, and 37% say their sources have reported made-up news intended to mislead.2
The latest Edelman Trust Barometer shows that our trust problem continues to grow. Trust has declined across every previously tracked category. Now, people operate on a trust radius. The public trusts people that they know: local leaders and their neighbors. They distrust national and international, especially non-scientist leaders.
While the public’s trust in CEOs overall has declined, employees trust their employer’s CEO – most likely because their values are aligned. To combat feelings of powerlessness, employees want their CEOs with powerful platforms to amplify their message. However, companies should be cautious. Inauthentic statements can cause real damage to a company’s brand.
Societal Leaders Not Trusted to Do What Is Right Source: © 2021 Edelman Trust Barometer
Another piece of surprising data is that all information sources are distrusted, not just social media. Even search engine results have a 56% trust rating. This lack of trust makes all both earned and owned media less valuable.
Trust In All Information at Record Lows Source: © 2021 Edelman Trust Barometer
This lack of trust affects emerging businesses more than established ones. Established businesses (like Facebook and Twitter) will see minimal impact from making social or political statements. However, the story is much different for emerging companies.
The latest case study: Robinhood. The company began based on the founders’ experience in selling trading software to hedge funds. They saw an opportunity when they saw a significant inequity in the stock market: Wall Street firms pay effectively nothing to trade stocks. At the same time, most Americans had to pay for every trade. They built Robinhood to give everyone fix this inequity, to “democratize our financial system.” The company grew steadily based on the favorable coverage and solid VC backing.
Robinhood Users Source: Business of Apps
Recently, the startup has been in the headlines for limiting trades on stocks targeted, like Gamestop and AMC. In the background, WallStreeBets (WSB) Redditors were betting against a couple of over-zealous hedge funds by going long on what WSB considered under-valued stocks. The targeted hedge funds were selling short selling on GameStop and AMC, which the hedge funds believed were was over-valued.
The massive Reddit group used a short-squeeze strategy to highlight the speculative nature of the hedge funds’ strategy. The group was growing on the Robinhood, with more than half of the platform’s users owning GameStop. As a result, the hedge funds’ losses were mounting…
Then Robinhood slowed the increasing values of the stocks when “limited buys” on these targeted stocks. By limiting trading on these targeted stocks, Robinhood had directly interfered with its users’ strategy. On top of that interference, the media highlighted that Robinhood sold their users’ purchasing data to hedge funds as its primary revenue source. Was Robinhood protecting its main source of revenue rather than its retail users?
After a couple of PR missteps and a class-action lawsuit, the company released a statement on its website to explain its actions. Perhaps bad press indeed is good press because Forbes reported that Robinhood hit record downloads since the controversy.
According to AdAge, Robinhood decided to double-down with an ad during the Super Bowl after seeing its users with the Gamestop kerfluffle– a play straight out of Trust Me I’m Lying. The ad that leaned into its “democratizing trading” mission, even as the market – including Elon Musk – openly questioned if Robinhood leaderships’ were willing to stay true to its mission.
The ad amplified the negative vibes in the stratosphere. Social media users highlighted the ad’s inauthenticity in comments and memes. Tim Marcin even cataloged the most notable commentary on Mashable.
Perhaps bad press is indeed good press. Only time will tell if there will long-term repercussions. To maintain its primary revenue stream, the company needs to continue to grow its retail customer base. Robinhood recently raised $3.4 billion in emergency funding to “enhance their product to give more people access to the financial system.” This infusion will give them plenty of runway to see.
Marketers can lead their organizations to a place of trust. We can explain why what our companies offer should be considered. We can help our peers highlight what they do well and why they do it better. This requires a different kind of spin, without shortcuts. Now that consumers see the short cuts, it is time to go back to basics:
Lead with facts, act with empathy. Making generic, hollow, or hypocritical statements will ring inauthentic. To genuinely contribute to the conversation, a company needs a solid track record on the topic or an actionable plan to right its course.
Provide trustworthy content. Trust is hard to earn but easily lost. With a small amount of legwork, people can easily fact check and look up your track record. If your audience finds a disconnect, any positive effects will be lost. Or worse, inauthentic or inaccurate statements will quickly be debunked, ridiculed, and shared virally.
Check out my recent article for more information on Corporate Social Responsibility (CSR) in Harvard Business Review, Marketing in the Age of Resistance.
Download the full Edelman Trust Barometer
1Many Americans Say Made-Up News Is a Critical Problem That Needs To Be Fixed, Pew Research Center, June 5, 2019.
2American News Pathway: How the public navigates news in 2020, Pew Research Center, November 2, 2020.