The owner of a vintage thrift store stands in front of his storefront. He is looking away from the camera. There are various items set up on the sidewalk in front of his store for customers to peruse.
Authenticity isn't a marketing strategy. It's a commitment that you make daily that is integrally tied to your mission and values. — Getty Images/Maskot

A recent study in the Strategic Entrepreneurship Journal suggests that consumers not only want brands to be authentic, but they're also increasingly skeptical of what it means to be "authentic."

"The modern consumer is jaded, skeptical, and even cynical about brands — and this is especially true with authenticity claims because, the authors say, authenticity belies self-promotion by nature," reported the Strategic Management Society.

Consumer distrust is at an all-time high. A 2023 Qualtrics survey reported that only 50% of consumers have confidence in the brands they do business with. Moreover, only 28% of Generation Z consumers trust the brands they do business with.

The study by Stanislav D. Dobrev of the University of Wisconsin-Milwaukee and J. Cameron Verhaal of Tulane University uncovered some key ways that entrepreneurs can demonstrate authenticity without overtly stating it. Here are some strategies for being a more authentic entrepreneur and boosting trust in your business and higher customer loyalty.

Own your business

Dobrev and Verhaal's study examined the craft beer industry to determine what strategic assets could be leveraged to convey authenticity in the consumer's eyes. Ownership was one factor that consumers used as a proxy for authenticity. When craft breweries retained sole ownership, they were perceived as more authentic.

"​​Many successful craft producers enter production alliances with mass producers to increase volume, which tends to suggest to its audience that it's shifted to placing profits first," the study showed.

Many entrepreneurs need to bring on a partner or merge with another company at some point in the business lifecycle. If and when that happens, do it in a way that aligns with your brand mission. Customers want to feel like your business growth follows the path you promised and that you don't abandon your purpose along the way.

To build a strong and authentic brand, it's not enough to state your values and beliefs; you must also act on them.

The Brand Council

Put your purpose over profit

There's a reason why successful brands like Patagonia are considered to be authentic: They aren't afraid to sacrifice profit when it helps further their stated mission.

In 2011, Patagonia famously took out a full-page ad in the New York Times with the headline Don't Buy This Jacket. The ad copy detailed the environmental and social costs of buying items you don't need, challenging consumers to think before they spend.

Dobrev and Verhaal say this approach communicates true authenticity. Consistent commitment to your mission shows your customers that you don't take their support for granted. You can show customers that their patronage is valued and part of a bigger movement by continually reinvesting your profits in business activities and causes that further your company’s mission.

[Read more: To Thrive in a Male-Dominated Field, This Female CEO Says 'Be Your Authentic Self']

Don't rely on paid influencers to tell your story

There's a time and a place for influencer marketing. Influencers can absolutely get the word out about your business and recommend your products or services to their followers. However, consumers are increasingly skeptical of influencers, knowing they've been paid to share their opinions.

Entrepreneurs may benefit from some endorsements more than others. "For example, winning an award by an independent third party can be thought of as an authenticity endorsement because that organization is charged with upholding and promoting the status of independent craft beer," the study reported.

Small business owners and entrepreneurs are perceived as being passionate, hard-working individuals who have a positive impact. When you let other people tell your story for you, it dilutes the power of that narrative. Industry awards, positive reviews, and recognition from other local businesses are all better endorsements of your venture than paying an internet personality to share your story.

Be consistent

Consistency is fundamental to authenticity. Consumers notice when you make claims without backing them up.

"To build a strong and authentic brand, it's not enough to state your values and beliefs; you must also act on them," wrote the Brand Council. "Today, customers are incredibly savvy and discerning, which means that they can quickly spot inconsistencies between words and actions, and they’re not afraid to call you out on them."

Authenticity is not a marketing exercise. It's a commitment that you make to your mission and values every day. For consumers, it's also about putting purpose over profit. When your customer base puts their trust in you with a purchase, honor that trust to foster long-term relationships with higher customer lifetime value.

[Read more: How Can I Be Myself and Still Be a Great Boss?]

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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