Most brands operate under a simple assumption: relentlessly focus on a core set of brand attributes that differentiate you from key competitors. Increasingly, however, there’s one attribute that every brand needs to own–and it’s not something that usually has anything to do with the product or service performance.
It’s called “open and transparent.” And it’s a brand attribute that every brand needs to own in the future.
What’s Changed
- One to Many Sharing — The web has enabled one to many sharing — think of the Comcast repairman YouTube video which has logged over 1.3MM views. Consumers can share information and knowledge about companies and brands far beyond their immediate social graph.
- Social Network Portability – Recommendations from people you know are increasingly portable. Facebook Connect and other similar capabilities are beginning to provide consumers with the perspectives of people they know as they traverse the web. Implications are large, as I covered in a previous blog post: How the Future Social Web will Transform Marketing.
- Knowledge & Information – Expectations of available knowledge before making a purchase decision have increased dramatically. Think about consumers doing TripAdvisor reviews before finalizing travel, Amazon.com reviews before buying a book, etc. Want to know what those Michelin tires you’ve been thinking about buying feel like on your car ? On TireRack.com, you can even read reviews of tires by people with your exact same car before you buy.
- Consumer Loss of Confidence in Institutions – Consumers increasingly distrust large institutions. Based on the General Social Survey, which has been tracking American attitudes and opinions on political and social issues since 1972, people are losing faith in large institutions, with the one exception being the military. This was true before the financial crisis, and it has been magnified many times over since–note the huge erosion of confidence in banks and financial institutions.
Consumer Confidence in Institutions -- Continuing to Erode
Company and Brand Implications
Corporations used to to be able to use a “stay out of the headlines” strategy when something went wrong.
- Broke someones guitar on a United flight ? Ignore the problem.
- Need to pay big bonuses at Merrill Lynch ? Avoid the press.
- Someone figured out a way to quickly and easily pick the Kryptonite bike lock ? Hope no one finds out.
- etc.
None of this works anymore. Consumers are able to see and learn more than ever. They know more about your company, the officers, shareholders, products, and services than ever before. They sometimes even know things about your company before you do.
The Importance of “Open and Transparent”
Open and transparent communication is important because of three things:
- Trust – Consumers want to trust brands. To earn that trust, brands need to consistently deliver against their brand promise. But now, given the changes above, they need to go beyond this. They need to communicate openly and transparently. Because consumers don’t trust something they don’t understand. And understanding requires open and transparent communication.
- Confidence — Confidence is created when actions or claims match words consistently over time. If a company promises something, and their behavior mirrors that promise on a consistent basis, then we have confidence in them. The new reality is that consumers can easily check to see if your company or brand is behaving consistently with your promise.
- Financial Performance — Trust and confidence are not just brand descriptors. They’re usually, in my experience, directly linked to company financial performance. Consumers that trust and have confidence in a brand or company are more likely to recommend the products and services of the firm, provide referrals, and increase their share of wallet. Trust and confidence aren’t just nice moral attributes, they’re key drivers of financial performance.
Years ago, as a Brand Manager, I never gave a seconds thought to the need for my brand to be “open and transparent.” But much has changed since then. Given the changes above — one to many sharing, social network portability, consumers increased access to information, and the growing distrust with large institutions — open and transparent communication and behavior becomes a touchstone for every brand in the future.
Do you want consumers to have trust and confidence in your brand–while achieving better financial results ? If so, then you should be asking yourself the question: “Is my brand open and transparent ?”
I completely agree with Randall’s assessment. Thanks for raising this as an important direction for brand marketing.
Trust – and the accompanying attributes of transparency, honesty and integrity – have always been at the core of successful brands (a brand after all is a ‘trustmark’), but now this must be followed through in every action and communication coming from the brand.
Fact is that traditional marketing vehicles are less effective — advertising is being tuned out and has become less credible from a generation of scrutinizers; public relations is much more of a challenge with fewer media outlets and overstretched journalists; and people are looking to their friends and family (and people like them) to guide their decision making.
The good news? Marketing in social media requires you to be friends with potential customers. This forces marketeers to live the values of trust inherent in the brands they represent.
Hi Dave — Thanks for the comment and reading the blog. I agree that brands that engage customers in a conversation have the potential to create more “friendships” and honesty and trust are at the core of these relationships. What amazes me is how many brands still don’t get it and haven’t internalized the changes that are, I think, permanent. This, of course, creates opportunities for those brands which do understand how to be open and transparent and use this to drive their business.
Randall
Randall,
Great post! I’m sure you saw the NYT article today about SIGG (the company that makes stainless steel water bottles). They got caught trying to cover up an issue with their product performance. Their CEO made it worse by trying to downplay the cover-up. SIGG is getting pounded as we speak on Twitter.
If they had followed your rules from the outset, they would be in much better shape!
Hi Greg — Thanks for bringing this up. I did, in fact, see the SIGG article this morning and thought–perfect example but only a day late !! Sometimes, the most difficult thing for companies to do is be open and transparent when things go wrong. To err is human, and consumers have a high tolerance for accepting mistakes — if they are dealt with openly and transparently, which means: 1) acknowledge the problem; 2) explain to people in SIMPLE terms how it happened; 3) Communicate what your plan is to fix it so it never, ever happens again; and 4) Update people periodically to show them you are taking the actions you committed to. This is the primary way to rebuild trust and re-engage your customers and key stakeholders to re-build your brand. Thanks for reading the blog, Greg.
Randall
Randall – I would love for you to do a blog post on Brand America and your perception of how branding principles from the product and corporate world could be reapplied to help make Brand America more competitive for global capital investment.
Hi Ed — Great idea. Let’s talk it more off-line. Thanks for reading the blog.
Randall
Randall – another great post.
Twitter has turbo-charged the speed at which one-to-many occurs (as evidenced by recent Dominoes issue) so, as you say, it is critical for brand organisations to be genuinely open and transparent.
Andrew — Yes, I agree that the one-to-many phenomenon has been turbo charged by Twitter, YouTube, etc. I still think WOM is most effective when it is passed along by someone you know and trust. Twitter followers are usually a mix of people who know and trust you, as well as anonymous followers who (hopefully) follow you because they value your thinking and views, but don’t really know you. These latter followers are still influenced by the WOM info passed along, but probably not to the same degree as the people who really know and trust you. In any event, Tweeters with large followings need to be engaged as they can have a real impact across both groups–positive or negative–on your brand.
Randall
Randall; Good thinking and excellent points by you and your responders. I have this thought to add; A shift of primary focus away from attributes that differentiate us from competitors and toward values needs and expectations of customers will reinforce principles of open transparency. Brands are often drawn into a war of competing claims to one up a competitor that leads away from open transparency as perceived by customers. When we are open and transparent in our desire to understand the real needs of a customer, and in our investment in products that serve those needs, and in responsiveness to their feedback; trust and confidence will follow.
Ken — Thanks for reading the blog and taking the time to provide your comments. Your point that listening to customers needs and delivering against those thru better products and services is linked to being open and transparent is an interesting one. I think brands can do a lot to let customers know that they are listening and responding. Clearly, when customers feel their feedback is taken seriously and acted on, they are going to trust the brand more and have greater confidence. So, brands can benefit from being open and transparent in the way they gather customer opinions and communicate how they are responding to these. Great build — thanks.
Randall
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