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Engage your customers with performance transparency

By Dr. Omar Merlo

A friend of mine told me that your milkshakes have wood pulp in them. Is that why they are so thick and tasty…?

What’s the real story about pink slime in chicken nuggets?

Why do you no longer care about peanut allergies?

These are a few examples drawn from the thousands of questions sent in by McDonald’s customers as part of the food chain’s ‘Our Food. Your Questions.’ campaign. Launched in 2012, the campaign invited customers to ask McDonald’s any question – either on social media or on their purpose-built website. The company convened a dedicated team tasked with giving honest answers, available for all to see online.

Industry observers predicted that this unorthodox initiative would backfire. However, McDonald’s proved their critics wrong.  Campaign reported that in Canada, where the question platform was first launched, the ‘Our Food. Your Questions.’ campaign accumulated 10 million interactions online, McDonald’s food quality and brand perception measures increased and monthly store visits grew by 50% in the second half of 2012, when compared with the first. [1]

McDonald’s food quality and brand perception measures increased and monthly store visits grew by 50%

‘Our Food. Your Questions.’ is an example of performance transparency – a marketing strategy which seeks to provide customers with a clear and objective view of what they might expect from a company. You might have noticed performance transparency when online shopping for example – a common approach is to show unfiltered customer reviews next to product listings. The goal is to give customers a complete picture of what they can expect from a product or service, including identifying limitations as well as strengths.

There is strong evidence that performance transparency strategies have significant business benefits. I recently published a paper on performance transparency with my Imperial College Business School colleagues Professor Andreas Eisingerich and Jaka Levstek and with collaborators at the Thunderbird School of Global Management. We found that transparency increases the level of trust that customers place in a brand and, perhaps most significantly, makes them more likely to pay a price premium for that brand’s products.

We found that transparency increases the level of trust that customers place in a brand

Performance transparency can benefit service firms as well as suppliers of goods and retailers. Andreas and I found that customers are more willing to do business with a service firm which they feel is transparent and pay a price premium for its services.

We also found that the positive effects of transparency persisted even when customers perceived a service firm’s ability to deliver their promised service to be low. So for a company new to market and yet to build a reputation for quality, or for a company going through a tough time, transparency could be a particularly effective strategy to address customer concerns.

Despite growing evidence for the business benefits of performance transparency, I still find that many executives are reticent to implement transparency strategies.

I still find that many executives are reticent to implement transparency strategies

In our research we conducted a survey of managers working in a variety of industries and found that eight out of ten had not considered ways of proactively employing transparency to enhance their company’s competitiveness. Managers described to us how transparency initiatives like sharing negative information can feel counterintuitive and contrary to their instincts to focus only on the positive aspects of their products.

To help managers who are yet to consider performance transparency, my colleagues and I have developed best practice guidelines. You can find out more about these in my next article: 5 strategies to leverage transparency.

 Dr Omar Merlo is Assistant Professor and Director of the MSc Strategic Marketing programme in the Imperial College Business School. His main interests are in the areas of strategic marketing, services and relationship management, customer engagement and customer management. With Professor Andreas Eisingerich he also teaches on the School’s Executive Education programme  Digital Mindset for Customer Value.

 

[1] https://www.campaignlive.co.uk/article/mcdonalds-honest-approach-fast-food/1343221

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