05.08.17

Honesty Is Always The Best Policy

Karl R. LaPan President & CEO, The NIIC

Brands are built on trust. That is true across every industry. Think for a moment about your favorite products. What keeps you coming back for more? Chances are, the brand’s reputation and its promise comes into play somehow.

If you want a sense of how important a brand’s promise is and how fragile it might be, consider the controversies associated with Honest Co. as cautionary tales. The consumer products startup was initially pitched as an alternative to traditional chemical heavy products on the market, like laundry detergent. According to their website, “(w)hen we were trying to think of a name for our company, we thought we should choose something that reflected our core values and highest aspirations. The Honest Company was the clear choice.”

Yet the Honest Co. wasn’t so honest after all. The eco-friendly claims were exposed last fall as less than truthful in a Wall Street Journal exposé. What followed was a major product recall and legal trouble. The company ended up reformulating the product in question, but no doubt the company lost credibility with health and socially conscious consumers who realized the honest company wasn’t very honest.

To add insult to injury, imagine the backlash when Founder Jessica Ala announced last month that it would replace its CEO with a former Clorox exec. The image Alba worked so hard to create was so quickly eroded by the decision. No doubt in some consumers’ minds the company (and Alba) had sold out.

The lesson here? Deliver on your promise. “The Honest Co. is an egregious example of what happens when you veer off course. For example, if you claim to offer organic, GMO-free products, then offer organic GMO-free products. If you are less than genuine, customers will take notice and that could have negative repercussions to your bottom line. Failing to deliver on your promise hurts your organization (and the stakeholders involved – employees, suppliers, & communities) just as much as the customer in the end.

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