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

Transparency
What it means to your customers
and its impact to your business…

Jennifer Dapko, Ph.D. © 2012 1

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Road Map & Summary
Why transparency is important • Consumers are more skeptical now than
to your sales and marketing any other time in history…they are more
efforts distrustful and on guard against firms’
persuasion attempts…

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

Key benefits of transparency to • More favorable customer attitudes,
your company decreased skepticism, increased trust,
increased purchase intention…
How to create transparency in • Provide learning opportunities, allow for
your sales and marketing mutual conversations, make it easy for
communications customers to learn about you, share
both the positives and the negatives…


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.

Jennifer Dapko, Ph.D. © 2012

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

THIS IS YOUR MARKETING
ENVIRONMENT…


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?


You can reduce skepticism and increase trust through

TRANSPARENCY…

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 feedback
3. Being upfront
4. Not hiding relevant information
5. Being honest
6. Providing access to information
7. Sharing relevant information
8. Creating a shared understanding
9. 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 Transparency
Skepticism Low Transparency High Transparency
Low 16.67% 71.84%
High 83.33% 28.16%
Trust 100% of the time,
Low 87.50% 3.85% respondents indicated
High 12.50% 96.15% low purchase intentions
Purchase Intention when they were
Low 100.00% 6.94% exposed to low levels of
High 0.00% 93.06% firm transparency.
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.


Transparency

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

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.


And Finally…

A FEW EXAMPLES OF COMPANIES
GETTING IT RIGHT…


Thank you.
Jennifer Dapko, M.B.A., Ph.D.
jdapko@yahoo.com


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