transparency: what it means to your customers and its impact to your business

Jennifer Dapko, Ph.D. © 2012 1

TransparencyWhat it means to your customersand its impact to your business…


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Road Map & SummaryWhy transparency is important to your sales and marketing efforts

Transparency definition

Key benefits of transparency to your company

How to create transparency in your sales and marketing communications

• Consumers are more skeptical now than any other time in history…they are more distrustful and on guard against firms’ persuasion attempts…

• Transparency is the extent to which your customers perceive that you are open and forthright regarding matters that are relevant…

• More favorable customer attitudes, decreased skepticism, increased trust, increased purchase intention…

• Provide learning opportunities, allow for mutual conversations, make it easy for customers to learn about you, share both the positives and the negatives…

Jennifer Dapko, Ph.D. © 2012

A Quick Poll…

Financial services companies will take my money.

Pharmaceutical companies put profits over patients.

Politicians are all liars. Corporations will do anything for a

dollar.


THIS IS YOUR MARKETING ENVIRONMENT…

Your customers are more skeptical now than at any other time in history.


Consumers are (apparently) skeptical of everything…


Current Marketing Environment

Consumers• Are more skeptical now than at any other time in

our history.• Are increasingly more skeptical, more distrustful,

and “on guard” against firms’ persuasion attempts.• Even when marketers are obviously honest

Marketers• Have reacted with marketing tactics to increase

persuasiveness by ‘sweetening the deal’ and even by hiding persuasion efforts via covert marketing.


Your customers are on to your persuasion tactic shenanigans…

Consumers use the knowledge they have about persuasion in the marketplace to interpret, evaluate, and respond to persuasive attempts.

Consumers cope with persuasion attempts by resisting and avoiding the persuasion.


Marketer’s Dilemma

Consumers resist overt persuasion attempts…

But covert attempts not necessarily effective either (and in some cases illegal).

How can marketers reduce skepticism and still be persuasive?


TRANSPARENCY…You can reduce skepticism and increase trust through


Transparency is the extent to which your customers perceive

that you are open and forthright regarding relevant

matters.


Transparency means…

1. Being open with customers (and other stakeholders of your company)

2. Providing open feedback3. Being upfront4. Not hiding relevant information5. Being honest6. Providing access to information7. Sharing relevant information 8. Creating a shared understanding9. Communicating clearly


Transparency…

Changes the persuasion paradigm.

Transparency reverses the downward spiral of skepticism, distrust of consumers and consequential distasteful persuasion tactics of marketers.


What you’ll gain from being transparent…

Customers that are…• Less skeptical• More likely to like you• More trusting• More willing to buy from you


The supporting data…Research shows that when firm transparency is high: 72% have low skepticism, 96% have high trust, 93% have high purchase intention, and 93% have high favorable attitudes toward the firm…

Consumer Reactions at Different Levels of Firm TransparencySkepticism Low Transparency High TransparencyLow 16.67% 71.84%High 83.33% 28.16%Trust Low 87.50% 3.85%High 12.50% 96.15%Purchase Intention Low 100.00% 6.94%High 0.00% 93.06%Attitude toward the firm Unfavorable 96.30% 6.71%Favorable 3.70% 93.29%

Source: Primary, experimental research conducted by Jennifer Dapko (2011 )using an airline firm as the contextual reference for respondents. Respondent age profile: 21 and under (32%), 22-34 (45%), 35-44 (9%), 55-64 (5%), 65+ (3%). Other sophisticated statistical analyses were performed including correlations, regressions, and structural equation modeling which all indicated strong relationships among the variables, and strong direct impacts of transparency on skepticism, trust, attitudes, and purchase intention.

100% of the time, respondents indicated low purchase intentions when they were exposed to low levels of firm transparency.


WHAT YOU HAVE TO DO: THREE SMALL CHANGES WITH BIG IMPACT

Transparency


1 Reduce effort

What it is: making it easy for customers to learn about you• Be clear in your communications

―No fine print―No jargon

•Make your information easily accessible and easy to find


1 Reduce effort

Suggestions for reducing effort and increasing transparency on your website: •More bullets, less paragraphs• Larger more readable font (or options for

user to customize font size)• Less scrolling and clicking


2 Reciprocity

What it is: the opposite of one-way telling• Allow for mutual conversation with your

customers and stakeholders• Provide an opportunity for two-way

communication• Have a dialogue• Allow your customers to easily reach you


2 Reciprocity

Suggestions for increasing reciprocity and transparency:• Provide multiple contact methods in your

marketing communications.• Listen more, talk less.•Monitor ghost email inboxes and respond to

queries and concerns.


3 Unbiased Information

What it is: sharing the good and the bad• Provide both the pros and the cons

during your sales pitch or in your marketing communications― Instantly gain source credibility


3 Unbiased Information

Suggesting for sharing unbiased information and increasing transparency

• Share the past year’s successes and failures (in your annual newsletter or other communications).

• Openly communicate the pros and cons of your services.

• Provide comparison pricing (for not only your services but also for your competitors)

• Allow customers to share both the positives and negatives of your services with others (on your website, blog, etc.)


Benchmarking & measuring your transparency…

Include survey questions into your customer surveys which measure and benchmark your level of transparency.

A/B test your marketing communications to increase transparency levels.


Transparency survey questions…There is an art and a science to creating survey questions that:

Measure what they are intended to measure (valid)

Consistently produce similar results in test-retest scenarios (reliable)

When combined have high explanatory power (capture the full scope of what you’re trying to measure)


Feel free to use mine…

This company provides me with a learning opportunity about itself.

This company enables me to know what it's doing.

This company wants me to understand what it is doing.

This company is open with me.

Directions: These are 7-point Likert-Type scales (disagree-agree). Include all items in your survey when possible. Aggregate and average the score per response and per survey period. Benchmark your average score over time to track and improve your transparency.


A FEW EXAMPLES OF COMPANIES GETTING IT RIGHT…

And Finally…


Thank you.Jennifer Dapko, M.B.A., Ph.D.

[email protected]

transparency: what it means to your customers and its impact to your business

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