A recent study from Strategic Entrepreneurship Journal suggests that not only do consumers want brands to be authentic, but they are also increasingly skeptical of what “authentic” means.
“Today’s consumers are cold, skeptical, even cynical about brands, and this is especially true of claims of authenticity because, according to the authors, authenticity is inherently antithetical to self-promotion,” reports the Strategic Management Institute.
Consumer distrust has never been higher. According to a 2023 Qualtrics study, only 50% of consumers trust the brands they do business with. Additionally, only 28% of Gen Z consumers trust the brands they do business with.
Research by Stanislav D. Dobrev of the University of Wisconsin-Milwaukee and J. Cameron Verhaer of Tulane University reveals some key ways entrepreneurs can demonstrate authenticity without being overtly assertive. Here are some strategies to become a more authentic entrepreneur and increase trust and customer loyalty in your business.
Own your own business
Dobrev and Verhaer’s study looked at the craft beer industry to determine what strategic assets could be leveraged to convey authenticity in the eyes of consumers. Ownership was one of the factors consumers used as a proxy for authenticity. Craft breweries were perceived as more authentic when they maintained sole ownership.
“Many successful craft producers have entered into production partnerships with mass producers to increase output, which tends to suggest to audiences that there is a shift towards profits being the overriding priority,” the study found.
Many entrepreneurs will need to bring on partners or merge with other companies at some point in their business lifecycle. If you do, make sure you do it in a way that aligns with your brand mission. Customers want to feel like your business is growing as promised and that you haven’t abandoned your purpose along the way.
To build a strong, authentic brand, it’s not enough to just state your values and beliefs — you also need to act on them.
Brand Council
Putting purpose before profit
There’s a reason successful brands like Patagonia are considered authentic: they’re not afraid to sacrifice profits if it helps them achieve their stated mission.
In 2011, Patagonia famously took out a full-page ad in the New York Times with the headline “Don’t Buy This Jacket.” The ad detailed the environmental and social costs of buying products you don’t need, urging consumers to think before they spend their money.
Dobrev and Verhaal say this approach communicates true authenticity. A consistent commitment to your mission shows customers that you don’t take their support for granted. Continually reinvesting profits in operations and activities that further your company’s mission shows customers that their support is valued and that they’re part of a larger movement.
[Read more: To Thrive in a Male-Dominated Field, This Female CEO Says ‘Be Your Authentic Self‘]
Don’t rely on paid influencers to tell your story
There is a right time and place for influencer marketing. Influencers can definitely promote your business and recommend your products or services to their followers. However, consumers are becoming increasingly skeptical of influencers because they know they are being paid to share their opinions.
Entrepreneurs may benefit more from some endorsements than others: “For example, receiving an award from an independent third party may be considered an endorsement of credibility because the organization holds itself accountable for maintaining and promoting the independent status of craft beer,” the study reports.
Small business owners and entrepreneurs are recognized as passionate, hard-working people who make a positive impact. Getting others to tell your story dilutes the power of that story. Industry awards, positive reviews, and recognition from other local businesses are better endorsements for your venture than paying an internet celebrity to share your story.
Be consistent
Consistency is the foundation of credibility. Customers will notice if you make claims that you can’t back up.
“To build a strong, authentic brand, it’s not enough to state your values and beliefs — you must act on them,” the Brand Council writes. “Today’s customers are incredibly savvy and discerning, so they can quickly spot inconsistencies between words and actions and won’t hesitate to call them out.”
Authenticity isn’t a marketing exercise. It’s a daily commitment to your mission and values. For consumers, it’s about prioritizing purpose over profit. When your customer base trusts you with a purchase, honor that trust to increase customer lifetime value and foster long-term relationships.
[Read more: How Can I Be Myself and Still Be a Great Boss?]
CO— aims to provide inspiration from leading, respected experts. However, before making any business decisions, you should consult with an expert who can advise you based on your individual circumstances.
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