By Dr. Omar Merlo
In my first article I discussed the business benefits of implementing marketing strategies based on performance transparency. Performance transparency aims to provide customers with a clear and objective view of what they might expect from a company’s products and services.
So what strategies are available to managers seeking to implement performance transparency?
During our research on performance transparency my colleagues and I had the great privilege to speak to hundreds of industry experts. Here are some of the key themes arising from these conversations:
- Deliver quality information at the right time
Intuitively you might associate transparency with making as much information available as possible. We found however that when companies provide too much information it can fatigue customers and hinder their efforts to see relevance.
The key is delivering quality information to customers at the right time in their decision-making process.
The website of the currency transfer service TransferWise successfully achieves this.
Their approach to web design is aligned to their transparent ‘no nasty surprises’ approach to currency transfer. The first thing customers see on visiting their website is a prominent tool which calculates how quickly customers can transfer money and what fees they will pay with TransferWise. Website visitors are given all the information they need to make a decision – the tool even compares costs against competitor services and notifies customers when a competitor is cheaper. When this happens the website displays a message, reinforcing TransferWise’s emphasis on honesty and transparency:
We’re always honest with our customers. And honestly, we’re not the cheapest this time. But we don’t have comparison data for transparency or speed at the moment. So while there are cheaper options, they might not be the fairest or the fastest.
- Help your customers help you
Customer engagement is vital to achieving the benefits of performance transparency. As the chief marketing officer of a successful supermarket chain said to us: ‘People always trust other people more than they trust what any business will tell them’.
A powerful tactic is to give customers a voice. For example, Adidas created an online platform for its customers to share their experiences of their Boost running shoe. This empowered customers, connected current customers with potential customers, and provided vital intelligence for Adidas to help design its next line of trainers.
- Embrace negative feedback
Embracing rather than hiding negative feedback is one of the most important aspects of performance transparency. One senior executive of a large online retail store told us that his customers are more likely to click on a product with more reviews but a lower average score than those with fewer reviews but a higher score. He observed: ‘Customers expect some critical reviews because everyone’s experience with a product or service can be different. If they don’t see the bad stuff, they get suspicious.’
Publishing negative reviews alongside positive reviews enables customers to understand both the benefits and potential risks of choosing a product or service, which can help to manage expectations and lead to greater trust and satisfaction. To achieve this, businesses often embed content in their own websites from third-party review websites, social media platforms, or comparison websites.
- Manage transparency as a proactive and reactive process
As well as being deployed proactively in projects and campaigns like our earlier McDonald’s example from my previous article, transparency can also be an effective tool when used reactively as challenging situations arise. Elon Musk demonstrated how transparency can work well in a 2013 blog he published in response to a New York Times review of a Tesla Model S, which criticised the car’s battery performance. In his blog Musk reacted quickly to the negative review, releasing detailed journey data exported from the review car to offer a counterview to the journalist.
- Be honest about what you offer
Finally, transparency isn’t just concerned with being open about what others say about you – publishing reviews for example. An additional crucial element is for companies to be honest with their customers about their value proposition. By being open you manage expectations and have a better chance of delivering customer satisfaction and value.
Mars Food gave an example of this approach when in 2016 they sought to help customers identify the nutritional value of their products more easily by pledging to label their less healthy products ‘occasional’. The headline-grabbing consequence of this was the company advising that some of their savoury sauces and recipe kits should only be consumed once a week because they ‘are higher in salt, added sugar or fat’ in order to maintain the ‘authentic nature’ of some of their recipes. The company saw long-term reputational benefit in offering its customers information to make more informed choices, even if this approach risked reducing sales for a small number of its products.
I hope I have shown in these two articles how transparency can be a powerful weapon in a company’s strategic arsenal and a source of differentiation. It can build trust and help customers make decisions with confidence and clear expectations. Perhaps most compellingly, customers are more likely to pay a price premium for a transparent business’ products and services.