As customers become more informed, and brands become magnets for mistrust, what then is the new basis for customer trust and loyalty? Blockchain architectures enable a shift from branding-based trust to math-based trust.
Executive intro to DeFi
Azeem Azar interviews Sergey Nazarov the cofounder of Chainlink. Highly recommended if you want to learn:
- How DeFi helps small and large players
- DeFi has higher yields than traditional finance
Like so many of Azeem's interviews, this one surfaced another gem: the Shift from branding-based trust to math-based trust. This fascinating topic is the subject of a deeper dive blog post published on the Chainlink blog in Febuary 2021. It focuses on trust as a factor for Chainlinks core business: oracle networks that provide trusted information to smart contracts.
But this shift has broader implications as well: As customers become more informed, and brands become magnets for mistrust, what then is the new basis for customer trust and loyalty?
Brand narratives and purpose washing
The average company publishes a brand narrative like ‘we are purpose driven and we do good things’ with photos and blog posts of point in time events suggesting this wholesomeness is the totality of what the company does. This narrative is crafted by people who are distanced (deliberately?) from the day to day messiness of the company's operations.
Branding tells stories that are at best hard to verify, and often easy to expose as false or contrived. Today’s consumers - especially younger generations - are more wary. Witness the brand industry’s sustained soul-searching on the topic of “purpose-washing”...here, here and here.
How many companies today are willing to publish a 24/7 live dashboard describing every action and impact so their customers form their own narrative about the company, rather than believe the one crafted by the PR dept?
This kind of radical transparency comes built in with blockchain: results are mathematically calculated and continuously exposed with no spin - not crafted by internal teams seeking to create an appearance. This is verifiable transparency.
In additional to being an operational constant, verifiable transparency seems to also be a cultural theme for Blockchain-based startups and project teams. Look at how most of these teams use Discord as the channel for building relationships with their customers and investors. Join their Discord channel and you get a reality-show view of internal meetings, team interactions and interactions with customers, all in real-time! Immediately you see some are well organized while others are rolling disasters. Its a level of transparency you don't get from conventional firms without being an employee.
If the world continues to move toward Blockchain-based verifiable transparency, and Discord-based customer relations, branding as we know it may lose its potency. The branding playbook will need to change - especially for customers who conclude they should trust nothing less than verifiable transparency.