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Transparency: four circumstances when your company really needs it
1.
Transparency
Four circumstances when your company really needs it… Jennifer Dapko, Ph.D. © 2012 1
2.
Road Map &
Summary A brief review of what it Transparency is the extent to which means to be transparent… your customers perceive that you are open and forthright regarding matters that are relevant… Four circumstances when 1. Your industry’s transparency is your company really needs low. transparency… 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. Jennifer Dapko, Ph.D. © 2012 2
3.
First…
A BRIEF REVIEW OF WHAT IT MEANS TO BE TRANSPARENT… Jennifer Dapko, Ph.D. © 2012 3
4.
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 Jennifer Dapko, Ph.D. © 2012
5.
Transparency is the
extent to which your customers perceive that you are open and forthright regarding relevant matters. Jennifer Dapko, Ph.D. © 2012
6.
And now…
THE FOUR CIRCUMSTANCES INDICATING YOU REALLY NEED TRANSPARENCY… Jennifer Dapko, Ph.D. © 2012 6
7.
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… Jennifer Dapko, Ph.D. © 2012 7
8.
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. Jennifer Dapko, Ph.D. © 2012 8
9.
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. Jennifer Dapko, Ph.D. © 2012 9
10.
2. When you’re
facing crisis events… “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. Jennifer Dapko, Ph.D. © 2012 10
11.
2. When you’re
facing crisis events… Don’t Do (Transparency) 1. Assume you can hide it. 1. Assume you will be exposed by someone, at some point. 2. Engage in a “no comment” 2. Tell what you know, strategy. honestly and with sincerity. 3. Stall or delay in 3. Go swiftly to the public. responding. Jennifer Dapko, Ph.D. © 2012 11
12.
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 Jennifer Dapko, Ph.D. © 2012 12
13.
3. When your
customers can’t judge your quality prior to purchase… 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 Jennifer Dapko, Ph.D. © 2012 13
14.
3. When your
customers can’t judge your quality prior to purchase… 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 Jennifer Dapko, Ph.D. © 2012 14
15.
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. Jennifer Dapko, Ph.D. © 2012 15
16.
Be Transparent.
YOUR CUSTOMERS WILL REWARD YOU FOR IT… Jennifer Dapko, Ph.D. © 2012 16
17.
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 Jennifer Dapko, Ph.D. © 2012 17
18.
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. Jennifer Dapko, Ph.D. © 2012
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