Endgame trust presentation march 2010 final with script

The trust trapRebuilding trust in the aftermath of the GFC

March/April 2010

2

Escaping the trap

The ingredients

of trustWho cares? Our report

cardOur trust

campaigns

Lessons from

mouthwash

Top 5 strategies

3

A multi-pronged research approach underpins our findings

Desktop analysis Field research

Investment Trends syndicated reports

Insights and impact

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IN THEIR OWN WORDS...

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INGREDIENTS OF TRUST

6

Trust me

Reliance on another person or entity.

Explicit

Implicit

A belief or confidence in the honesty, integrity, reliability of a product, service, brand or person

Having faith in others and believing them.

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We’re hardwired to trust

We trust people who are similar to us

Physical touch

Oxytocin

Transitive trust

Illusion of personal invulnerability Unrealistic optimism

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The 4 ingredients of trust combine head with heart

Credibility Reliability Intimacy Self-orientation Trust

Rational Emotional

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The most trusted brands in Australia

Free from scandal • Reliable • Safe • Deliver on promises

Readers Digest Magazine 2009

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Cluster analysis revealed four groups of trust factors

Investment Trends Pty. Ltd March 2010 Trust Mini Report

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Open about fees, reliable, tenure and real people


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Reliability is king


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Those who cited “they understand my specific needs” as the main factor for trust generally had a higher income

Q3 Which of the things you selected above is most likely to make you trust a financial service company? (Bubble size represents % selected as most likely)

Customer for a long time, 13%

They do what they say they will do, 21%

Open about fees, 12%

Keep in touchregularly, 4%

Admit when they get it wrong, 4%

Make me feel special, 0% Understand my

specific needs, 6%

Referred to me by someone I trust, 5%

Talk to me in a way I can understand, 3%

I can contact them and talk to a person, 9%

Been around a long time, 4%

Owned/affiliated with a major bank, 4%

Large organisation, 3%

An Australiancompany, 2%

No bad press, 2%

Other,5%

0

500

1,000

1,500

2,000

30 50 70 90 110 130 150Q72 Personal income per annum, before tax ($'000)

Q74

Tot

al in

vest

men

t por

tfolio

siz

e? ($

'000

)


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Big v small

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Simplicity and transparency – the dominant trends driving consumption

Uncomplicated services

User-friendly

Simplify their lives

Demand for

simplicity Punish the perceived sources of their dire circumstances

Outrage over corporate malfeasance

Backlash against unethical or ineffective companies

Focus on the

boardroom

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WHO CARES?

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Because it hits the bottom line

Series1

-100 -50 0 50 100 150

-17%

-34%

0

-72%

-77%

26%

42%

55%

76%

91%

- +

Refused to buy their products/services Chose to buy their products/services

Criticised them to a friend or colleague Recommended them to a friend or colleague

Paid a premium for their products/services

Shared negative company opinions/experiences online Shared positive company opinions/experiences online

Sold shares Bought shares

2010 Edelman Trust Barometer

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Because the world has changed

Employee/CEO blogs

Dialogue with stakeholders

Visible CEO

Socially responsible

Good employee relations

A well-known brand

Fair pricing

Strong financial performance

Attentiveness to customer needs

Quality products and services

12%

23%

23%

33%

35%

37%

38%

42%

47%

53%


Financial returns

Top leadership

Innovator

Prices fairly

Good corporate citizen

Treats employees well

Communicates frequently

High quality products and services

Company I can trust

Transparent and honest practices

45%

47%

48%

58%

64%

72%

75%

79%

83%

83%

U.S 2006 U.S 2010

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Because it’s out-pacing performance

Investment Trends 2009 Investor/Member Communications and Retention Report

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Because it’s the new criteria for choice

4 most important

things

Honesty 55%

Good communication 48% Low fee/cost 39%

Experience/expertise 37%

Investment Trends 2009 Advice and Limited Advice Report

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Because investors will leave


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OUR REPORT CARD

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Financial services companies have a job do to

Media companies

Insurance

Banks

Entertainment

Automotive

Pharmaceuticals

Energy

Health care industry

CPG manufacturers

Retail

Biotech

Food

Technology

27%

29%

36%

35%

32%

39%

39%

41%

53%

47%

60%

56%

72%

32%

32%

33%

41%

45%

45%

50%

50%

57%

61%

62%

64%

81%

20102009


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Let me check with the bartender before I invest

Most trusted

• 1. Ambulance officers

• 2. Firefighters• 3. Nurses• 4. Pilots• 5. Pharmacists

Least trusted

• 37. Psychics/astrologers

• 38. Politicians• 39. Car salesmen• 40. Telemarketers

Admirable mentions

• 23. Plumbers• 24. Accountants

• 27. Bartenders• 28. Financial

planners

• 33. Professional footballers

• 34. CEOs• 35. Sex workers

Readers Digest: Australia's Most Trusted People 2009

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Trust has eroded further, despite market gains


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The blame game haspolarised investors

At the same time investors are taking a more active role

• Taking responsibility to obtain information• Using advisers as sounding boards

Blamers

• Older• Wealthier• SMSF• Advised

Faithfuls

• Younger• Retail

fund members


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Trust differs across generations

020406080

Gen YGen XBaby boomer


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Younger people trust more...

CEO or other senior executives of a financial services company

Host of a cable television show on investing

Corporate communications

Portfolio manager

Friends or family

Broker/advisor

35-6425-34

75%

57% 73%

66%

53% 59%

40% 56%

33%

30% 39%(Same for both age groups)


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Q3 Which of the things you selected above is most likely to make you trust a financial service company? By Generation

0% 5% 10% 15% 20% 25% 30% 35%

They do what they say they will doI have been a customer for a long time

They are open about their feesI can contact them and talk to a person

They understand my specific needsThey were referred to me by someone I trust

They admit when they get it wrongThey keep in touch with me regularly

They are owned/affiliated with major bankThey have been around a long time

They talk to me in a way I can understandThey are a large organisation

They've had no bad pressThey are an Australian company

I know what to expectThey make me feel specialThey give me good returns

Other

All survey respondents [n=222] Gen Y [n=34] Gen X [n=90] Baby boomer [n=57] 65+ [n=42]

...and not just their Facebook friends


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IN THEIR OWN WORDS...

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OUR TRUST CAMPAIGNS

From big to more

Empowering and tenure

Alignment of interests

http://www.industrysuper.com/campaign.aspx

Trust 101

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Q5 How likely are you to believe the following statements from a financial services company? All respondents [n=222]

16%29%

19%35%

43%34%

41%29% 42% 43% 49%

40% 44% 33%31%57% 51%

41% 34%36% 35% 29%

24% 19% 21% 19%5% 5% 8% 3% 3%

49%35%

20%20%9%13%

26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Very likely

Somewhat likely

Somewhat unlikely

Very unlikely

But do people believe us?


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LESSONS FROM MOUTHWASH

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Confidence and speed

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Public responsibility as part of a company’s DNA

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TOP 5 STRATEGIES TO REBUILD TRUST

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Embrace the new stakeholder world

Advocate a transparency culture

Make communications and customer service count

Listen to engage

Use multiple information sources

Top 5 strategies to rebuild trust

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1. Embrace the new stakeholder world

THEN

NOW

Create wealth for shareholders

Create companies that are economically, ethically and socially sustainable

Adapted from Harvard Business Review June 2009

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All stakeholders equally important

52%

Shareholders14%

Customers13%

Society11%

Employees7%

Government3%

Which stakeholder should be most important in CEO decisions?


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Have a voice about the issues that

matter to investors

Don’t just say you care, show it

Engage with internal comms

Start working on your youth

strategy

45

2. Advocate a transparency culture

Tell the truthEncourage

people to speak truth to power

Reward contrarians

Practice having unpleasant

conversations

Admit your mistakes

Set information free

Adapted from Harvard Business Review June 2009

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3. Make communications and customer service count

Has ways to connect with customers via social networking sites

Has highly-regarded local advisors

Has highly-regarded and widely admired top leadership

Has a Web site that is informative about investing and provides information on the financial markets

Has a Web site that makes financial transactions easy

Prices its products fairly and competitively

Has customer service available by Web or phone for help or advice

Has investment products that deliver consistent returns to investors

Communicates frequently and honestly

3%

43%

46%

47%

50%

70%

70%

72%

75%


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3. Make communications and customer service count

• Asking, listening and acting• Easy to contact you2 way conversation

• Tailored communication• Personal experience through digital toolsSegmentation

• Accessible online, digital options• Email soon after events

Proactive, current and immediate

• Subscription option, choice of mediums and frequency• Empowerment through education and toolsI’m in control

• Empathy• No spin or marketing fluffReal

48

4. Listen to engage

2 way collaborative communication Co-design products

Participate in industry forums

(don’t control them)

Add intimacy (even online)

Research is (will make you) king

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4. Listen to engage – the Bell Direct model

Intimate dinners with the

MD

Participation in industry forums and

blogs

50

5. Use multiple information sources

Once

Twice

Three to five times

3 times

4 or 5 times

6 to 9 times

10 or more times

Don't know/refused

25%

6%5%

7% 6%16%

60%35%

Specialist sources

Articles in trusted

publications

Internal experts Activate your advocates

Integrated campaigns work

(who knew?)


How many times in general do you need to hear something about a specific company to believe that the information is likely to be true?

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THE WISDOM OF BRANDING...

The trust trapRebuilding trust in the aftermath of the GFC

March/April 2010

Economy & Finance

Endgame trust presentation march 2010 final with script