Transparency: four circumstances when your company really needs it

Jennifer Dapko, Ph.D. © 2012 1

TransparencyFour circumstances when your

company really needs it…


Road Map & Summary

A brief review of what it means to be transparent…

Four circumstances when your company really needs transparency…

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

1. Your industry’s transparency is low.

2. You’re facing a crisis event.3. Your customers can’t judge your

quality prior to purchase.4. Your product is not much

different than your competitor’s.


A BRIEF REVIEW OF WHAT IT MEANS TO BE TRANSPARENT…

First…

Jennifer Dapko, Ph.D. © 2012

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


THE FOUR CIRCUMSTANCES INDICATING YOU REALLY NEED TRANSPARENCY…

And now…


1. When your industry has a bad reputation…

When your industry is lacking transparency, your customers will tend to think you are too.• Especially when they have little

experience interacting with you.Industries with low transparency?• Automobile, financial, oil, healthcare,

pharmaceutical, public sector/ government…


1. When your industry has a bad reputation

If you’re in one of these industries...• First, you will probably have to be convinced that

transparency is a good strategy• Compared to your competitors: consumers will

be less skeptical of you, more trusting, have more favorable attitudes toward you, and more likely to purchase from you.

• Still unsure?• Baby steps…aim for a transparency level just

above the industry’s level.


2. When you’re facing crisis events…

If an event has occurred that, if it were exposed, could impact your company’s reputation…• Quickly be transparent with stakeholders in order

to minimize damage.• Once exposed, delaying in responding publicly will

cause increased skepticism and decreased trust.― And most likely your message, when you

get around to responding, will be perceived as dishonest.



“If Stewart opened her records on day one, had come clean and forthrightly answered questions from the media and investigators, chances are we wouldn’t have enough coverage to analyze”

– PR News Magazine 2002, regarding Martha Stewart’s non-transparent strategy in dealing with her insider trading scandal.



Do (Transparency)1. Assume you will be exposed

by someone, at some point.

2. Tell what you know, honestly and with sincerity.

3. Go swiftly to the public.

Don’t1. Assume you can hide it.

2. Engage in a “no comment” strategy.

3. Stall or delay in responding.


3. When your customers can’t judge your quality prior to purchase…

The more difficult it is for customers to evaluate your products/services prior to consumption, the more likely they are to:• Scrutinize your marketing messages• Adjust their levels of skepticism toward your

marketing appeals (and you) • Assess your truthfulness and trustworthiness



They will likely use your level of transparency as a cue to decide how skeptical to be and how much trust to give you:• High transparency will lead to perceptions that you

(and your marketing messages) are highly trustworthy.

― And, thus, they will be less skeptical• Low transparency will lead to perceptions that you

(and your marketing messages are not trustworthy.― And, thus, they will be more skeptical



Examples of companies in this category:• Consulting firms, travel agencies, salons, and

most all services.What you can do:• Increase transparency within the tangible

cues of your business at each customer touch point

― Website, on-site, phone, email


4. When your product is not much different than your competitor’s…All else being equal, customers are likely to want to buy from companies that are transparent compared to not.

Examples of companies in this category:• Undifferentiated products, generic brands, commodity

goods

What you can do:• Aim for a level of transparency just slightly ahead of

your competitors to gain a competitive advantage.


YOUR CUSTOMERS WILL REWARD YOU FOR IT…

Be Transparent.


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


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

This presentation is based on Jennifer’s Marketing Dissertation, “Perceived Firm Transparency: Scale and Model Development”. For more of her Transparency work, please visit dapko.com or search “Dapko” on slideshare.net.

http://www.dapko.com/

http://www.slideshare.net/search/slideshow?searchfrom=header&q=dapko

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Transparency: four circumstances when your company really needs it