What do Costco and MEC have in common? They are the two most trusted brands in Canada. Now in its ninth year, the prestigious University of Victoria‘s Gustavson Brand Trust Index has identified Costco and MEC (Mountain Equipment Company) as our most trusted brands, with a tied score. This is a direct reflection of their perceived value and robust relationships with customers. Close behind are such familiar names as Toyota, Dyson, the Canadian Automobile Association, Ikea and even Lego.

“The two top brands’ commitment to value, customer service and competitive pricing has resonated with consumers searching for affordability in the face of inflation,” says Saul Klein, former dean of the Peter B. Gustavson School of Business at UVic and director of the project. 

The study was established in 2015 to explore that elusive concept, consumer trust, the factors that influence it and the brands that excel in building it. This year the study featured more than 400 brands across 33 categories, from alcohol (Alexander Keith’s came in first) to hotels (Four Seasons) to health care (Tylenol). A key finding was brands that offered savings and value to consumers increased their trust rating, deeply influenced by rising inflation. Those brands that turned a deaf ear to rising costs saw their trust scores erode. 

As an example, MEC achieved the top spot in the trust index in both 2019 and 2020. But in 2021, following its sale to a private investment company, it fell to seventh place. With a determined effort to rebuild trust, it reclaimed top spot in 2023.

“MEC’s incredible comeback story showcases the power of resilience and customer loyalty, propelling them from a moment of crisis to reclaim their position,” says Klein.

Lessons Learned

The transportation sector, not surprisingly to anyone who has stuffed themselves into an economy seat, had the lowest trust scores. Brands in this category, particularly airlines, received lower trust scores this year. Their failure to meet the expectations of Canadian customers was due to poor customer service and operational challenges such as delays, cancellations and baggage mishandling.

Canadians recognize unethical practices: Consumers have a kind of radar to detect unethical practices among brands. Despite SHEINʼs global popularity in fast fashion, for example, Canadians ranked it 399th among brands, highlighting concerns about sustainability.  

Inflation affects trust: The impact of inflation on consumer trust is keen. Facing rising prices, Canadians are seeking better value for their money. Brands offering affordability are more likely to gain consumer trust in this economic climate.

Some other findings from the report: WestJet has lost altitude, and the airline industry in general is facing a crisis in customer trust and loyalty. The once-beloved airline is grappling with delays and cancellations as well as a perceived drop in the level of service. To regain lost ground, airlines must prioritize customer service and reliability to win back the hearts and minds of customers.

Netflix’s recent decision to crack down on shared accounts highlights the growing importance of trust in the video streaming industry. An increasing array of competitors like Disney+, Amazon Prime and HBO Max are also vying for dominance.

Inflation, the rising cost of groceries and accusations of price-fixing have seen trust in Loblaws plummet, as well as their Real Canadian Superstore here on the Island. By contrast, Costco’s response to customers’ needs during these inflationary times serves as a shining example of providing good value and maintaining consumer trust.

Toyota is the most trusted automobile brand in Canada, while faith in Tesla dropped based on the shenanigans of CEO Elon Musk. Likewise Twitter’s (now X) treatment of employees hit rock bottom as Muskʼs ownership led to mass layoffs, system breakdowns and a drop in morale and trust. The so-called “Musk Effect” highlights the risk in hanging a company’s brand on a single figurehead. 

Sometimes a single incident can trigger a decline in brand trust. When CTV, Canada’s largest private TV network, dismissed veteran journalist Lisa LaFlamme, viewers raised concerns about the network’s pursuit of younger viewers at the expense of older loyalists. 

According to Klein, one finding keeps coming back stronger each year: Besides the performance of a brand (quality, reliability, value for money) and the experience it provides to its customers, consumers also pay close attention to a brand’s values and social responsibility. Earning trust in a purpose-driven economy is achieved through acting with competence and intent, and is lost when these behaviours are not authentically demonstrated.

Most Trusted Brands: 

1. Mountain Equipment Company (MEC)
2. Costo Wholesale
3. Columbia
4. Canadian Automobile Association (CAA)
5. Toyota
6. Dyson
7. Lego

Why Branding Matters

What’s the conclusion? A business’s branding is more important than owners might think. On the outside, a brand may seem like it consists only of logos and colours, and maybe a catchphrase or jingle. But a brand is actually the entire identity of a business. For better (Costco) or worse (X), a brand gives a business its personality.

Research shows that companies with strong brands generate higher sales and profits. In other words, taking the time to define and build a brand can give any business a competitive advantage. Here are some tips to help implement effective branding strategies and tactics in your business.

Conduct effective market research

Before making significant branding efforts, answer a few key questions:

Are customers aware of your brand?
How are you perceived in the market?
How do customers compare your brand with others in your sector?
What characteristics do customers associate with your brand?

Market research will help answer these questions and gather feedback on positioning for the  future. Brand research is usually conducted by interviewing customers and organizing focus groups. You can hire experts to help co-ordinate customer surveys or try using inexpensive — or sometimes free — online survey tools like QuestionPro, Interceptum or SurveyMonkey. 

Focus on a unique value proposition

Your brand is your promise to the customer. So it’s important to develop a brand that conveys a unique value proposition to customers — something that stands out. Think about why your customers would choose you over the competition. Are your products more dependable? Do they have a longer life? Are they less expensive than others in the market? In sectors such as fashion, furnishings or manufactured goods, unique styling can also be a key differentiator.

Choose a brand name that delivers a clear message

Once you have identified your customers’ needs and desires and have come up with products to meet them, it’s time to choose a brand name that delivers that message clearly. It’s best to be specific. For example, consider giving each product or service a different brand identity, as opposed to simply repeating your company’s name.

Create an emotional connection

Psychologists have found that 90 per cent of communication is non-verbal. Shrewd marketers have long known that businesses can improve brand effectiveness if, in addition to a good name, they evoke appropriate emotion.

One simple way to do this is through the use of colour. In our brains, reds create a sense of urgency, greens suggest sustainability and blues pair with water. They all can help to reinforce an effective brand name. Some companies even use music to build brand identity. For example, Intel trademarked the musical notes that play at the end of its television commercials.

Spread the word

Once a company has developed an effective brand and corporate identity strategy, it must be implemented consistently through every “point of contact” with customers, including in advertising, signage and public relations. 

One key is to get employees on board. A company’s employees are its greatest brand advocates. Creating an internal model will help them understand and connect to your core brand(s). They’ll then be better equipped to communicate that message to customers.

Guerrilla marketing is an out-of-the-box, unconventional and creative way to achieve maximum exposure and impact for a product or service. The approach leverages hype, curiosity and intrigue to increase mentions, word of mouth and attention toward a business. Think of it as an adjunct to traditional advertising. Examples include sponsorships, installations or events that spark public interest and social media shares. It can also take the form of digital campaigns, like viral videos or interactive websites. Prominent companies like Coca-Cola, Red Bull and Pepsi are several brands that use guerrilla marketing effectively. But small businesses, too, are realizing the potential of this strategy.

In the end, a brand is a promise. Itʼs what customers perceive, feel and believe about the business or person that embodies its message. A brand is also a vehicle for creating trust with stakeholders, and in both the for-profit and non-profit sectors, trust is everything. 

MEC Redux: A Case Study in Redemption 

Mountain Equipment Company has experienced an incredible journey of vilification and redemption. After achieving top spot in the Trust Index in 2019 and 2020, MEC nosedived following its bankruptcy and acquisition by California-based Kingswood Capital Management, and the dissolution of its co-op status in 2021. This decision horrified its loyal customers — who, under the former co-op structure, were also its owners — and led to a precipitous decline in trust for the MEC brand. Recognizing the need for change, MEC placed emphasis on fostering a culture of accountability and open communication. The company sought feedback from its employees and empowered them to contribute to the brandʼs rejuvenation. The MEC brand now stands again for a commitment to outdoor enthusiasts, sustainability, transparency and community engagement.