What happens when a brand makes a mistake?

For instance overcharging you for home insurance over a period of 4 years or not giving you the right number of pension units 8 years ago? Well, I received a cheque from Nat West for £600 for the overcharging and £190 from Prudential for the pension mistake. I had absolutely no idea I was due this money and one part of me feels good that they recognised their mistakes and have paid me some money. Is it the right amount of money? Haven’t a clue. Does it make me trust those brands more? No. Does it make me trust those brands less? Yes. Do I feel that other financial providers would be any better? No.

The reason why they felt compelled to pay some money back was more to do with what a new auditor had uncovered, rather than any moral high ground being sought. The tone of the letters, that accompanied the cheques, were not very apologetic, having been suitably screened by the various legal departments. A minor gap in the month’s accounts will result but they can explain that away as a one-off to their shareholders.

It is true that in many companies, particularly those companies that charge you monthly for services, it is the loyal customers that stay with a brand year after year, that get the worst deal and it is the new customers, who get the best deal. This enables brands to have a seductive “Headline Shout”, whilst not having to give this great deal to their existing customers. How does that sit with a value like trust?

Yet these are the very companies that declare trust to be one of the things they hold dear. Increasingly, trust has become a term without substance, when applied to the way that a company operates.

Instead it is the consumer, who decides who they trust and they then share this belief with those that are closest to them in the form of recommendations. Hasn’t it always been so? In a way, it has but with people being able to communicate so much more than they have ever been able to before, then the potential to pass on these recommendations has never been greater. Imagine if all the emails you received every day were sent as letters. Or if each search you performed on the internet was delivered to you as a newspaper.

Or each text message delivered as a telegram?

We have come along way in the last few years and the volume of communications between people will only increase. Which means that word of mouth, the oldest of all the communication channels, is back.

And back with a vengeance.

I need to go on holiday – somewhere that I know the food will be good , somewhere with a kids club, and somewhere not too far from the airport.

‘Has anyone got any recommendations?’ you may ask a set of four friends at the pub.

“Don’t have kids”,  “I stayed at this brilliant Michelin starred castle in France a few years ago where the food was fantastic”, “ Not too far from the airport – the Greek islands are best for that” - friends recommendations when they are culled from a sample of four people who you have the occasional once a month outing with, are probably not going to come up with the right answer.

However, broaden that circle of friends to 10 or 20, and the chances are that you will get a variety of different answers each of which ticks all your boxes. It’s because we tend to have friends, who are vaguely similar to us and hence have the same requirements as us if you broaden the net beyond your immediate drinking pals.

Yet this is a group who are rarely consulted on such things as the best place to go on holiday. Instead we take the view of a travel agent or Google or some random reviewer, who has posted something up on TripAdvisor. Lots of money is then invested on the basis of someone you have never come across, telling you what you should do.

Which is slightly insane. In fact, very insane.

The recommendations you get from any search engine is skewed by a whole number of factors – all based on an inamimate object processing data. So last year I was looking for a digital camera to buy someone for Christmas. And indeed I duly bought one – that at the time was high spec, good value and I was happy with my purchase. For the last 6 months, my inbox has been clogged with offers , from the retailer I bought it from for better quality, better value digital cameras that have undermined my purchase decision. I now feel conned.

I really don’t trust computers as a source of intelligent recommendation – is it any wonder?

I do trust my broad circle of friends though – human beings who are concerned that they don’t give you duff information.

‘Better the devil you know’.

There are certain friends, who I would go to for certain recommendations with a 100% certainty that their recommendation on a particular subject area was going to be brilliant. On another subject area, they might be terrible or just very different to what you are looking for. The brain is far better at filtering stuff than any collection of data – we are after all humans.

James.

It takes years to build a reputation and only a day to destroy it.

Last week, there was a story about a hotel in New York, which had to close because of some nasty reviews that had been written about it on TripAdvisor. Apparently staff were seen smoking weed in the bedrooms as they went about their cleaning duties, rats were prevalent in the kitchens and mattresses stank of urine.

Yet this had been a well-respected family run hotel, that had done well for many years.

According to the friend that told me this story, the negative reviews were posted by a rival hotel rather than real customers.

The fact that there were lots of really favourable reviews on TripAdvisor for this same hotel becomes irrelevant if you think there’s a chance that your mattress is going to smell of urine – however good the other aspects of the hotel may be. TripAdvisor, to be fair, does give any hotel the chance to respond to this type of comment, but who would you believe?

“I stayed in that hotel and the mattress stunk of wee”
OR
“ I can assure guests that if any mattress stunk of wee, it would be replaced immediately”

Recommendations from people you trust though are worth their weight in gold.

They may not always be good recommendations but if you know the person providing the recommendation, chances are that you will be able to put it into context. If one of your friends has got a bad breath problem and they recommend a particular product for easing the problem, that’s a very valuable reccomendation. Compare that to a beautiful celebrity endorsing a fresh breath product – you sort of know that they only endorse it for the money and you suspect that their celebrity breath smells beautiful anyway.

That probably explains why, in a recent study, friends recommendations were trusted by 65% of people and only 8% trusted those of a celebrity. Yet still many brands spend millions on getting celebrity endorsement and they wouldn’t do that if it didn’t work.

The moral of the story – if you want to buy something or go somewhere, before you do nything else , ask your friends.

(The power of the recommendation of something that is so good, you actively don't want to recommend it)

When you have a secret, other people don’t like it if you don’t share that secret with them. They feel alienated.

On the other hand if you do share a secret with someone, they feel privileged.

When someone says someone is a good friend, it doesn’t necessarily mean that they’ve had to donate a kidney to you, it often means that they have just been really helpful to you.

One of the best ways to show your friendship is to let people in on a secret. If we forget the type of secrets that will earn you thousands of pounds in the News of the World, the next best kind of secret is the secret place that you find – it might be for a weekend away or a holiday villa – but one that you just don’t want to tell everyone about, for fear of making it too popular.

Those recommendations are very special and you sort of enter into a secret pact not to tell anyone else about it.

It’s not like recommending Virgin Media for broadband (if you live in a fibre zone) or recommending North Face waterproofs ( because they are the only ones that are truly waterproof), this is about recommending something that is in limited supply. When it comes to hotels or villas or a restaurant where you can always get a table at the last minute, your selfish side doesn’t want to spread the word too much about how good it is. But as a sign of true friendship, there is nothing more powerful.

Lovethis.com is the place for such a secret – only your friends will see it.

Of course, if you have recommended the ultimate place to conduct an illicit affair, posting it up on Lovethis.com, may not be the wisest thing as it could get just a little embarrassing, but any other recommendation is likely to go down a storm with your friends.

Secrets are very powerful.

James

P.S. Read the latest thoughts from LoveThis Founder, Alexis Dormandy...