The Cost of Regaining Customer Trust

May 31, 2018

By Michael Teich

Uber has spent millions of dollars on an ad campaign in which its chief executive, Dara Khosrowshahi, tries to win back customers' trust after the ride-hailing company was beset by scandals and a slumping reputation.

The ad was a departure for Uber, but a necessary one because "we're in an environment where people want to hate," said the Wall Street Journal reporter Suzanne Vranica.

Uber, Wells Fargo and Facebook, which all endured a backlash from customers related to corporate missteps, have spent more than $60 million recently to protect their public image, according to research from iSpot.

"You can’t discount trust," said Vranica in an interview Thursday with Cheddar. And though users may still be logging on to Facebook, their behavior could change as they lose faith in the platform.

"Long term, it will impede ability to attract advertising dollars," she said. "It takes a long time to evaluate to see if it's a problem. That's why they need to spend so much money."

The social media company's stock plummeted after it was reported that it failed to protect the private data of 87 million users exposed in the Cambridge Analytica data scandal. Facebook shares climbed back near all-time highs as investors' concerns appeared to wane after the company reported user growth in its last quarterly earnings that appeared to be unaffected by the scandal.

Vranica still warned, these are "long-term problems that could eat away at your brand" and "overall brand health really matters."

For the full interview, click here.