Saturday, September 12, 2009

Transparency does not mean trustworthy.

Being upfront and open to people has always been a challenge for companies. They live in a world surrounded by paranoia and legal teams that influence when things are disclosed or off the record. Nobody wants the competition to steel that secret and nobody wants to be sued for using some misunderstood headline. The presence of companies online has only added fire to the debate about the requirement to be transparent. They're on Facebook, anonymously dropping videos on YouTube, and talking back on Twitter. They should be upfront and transparent. If I write a blog post about a product and that product pays me, I should let readers know. If I'm a credit card company advertising a 4% interest rate, but I'm really just trying to sell an18% interest rate, I need to put a * beside my 4% followed by some legalese that states my goal. Transparency has various degrees of truth. It usually is motivated by a short term impact or action.

When something goes wrong - profits fall unexpectedly, CEO is investigated for fraud, or customers get ticked because they thought the ad actually meant 4% - companies point to transparency. Since they have been transparent you should have known all this stuff could go wrong. Even though you didn't, they would still like you to see that because they have been transparent, you can trust them.

Transperency is not enough.

It's a one way action with an expectation of return. A contract with your mobile phone company is open and transparent, but the fact that it states that they can change your monthly fee without notice and your only recourse is to pay them $200 to end your relationship is not a customer/company relationship based on trust. It's more like a protection agreement, where you pay me to look after your shop or I'll burn it down. Transparent? Yes. Trustworthy? No.

Trust is also one way, but with no expectation of return. Actions result from the decision to just be better. To look at the world through a different lense. Profits come from happy people, so rather than focus on profits, focus on happy people.

Trust is a gradual process that results from consistent behaviour and time. If a company says that they will refund your product, no questions asks and actually does it repeatedly - people will notice. Athough it doesn't make short term sence to lose the proftis on all these refunded products, some of which could be just customers taking advantage of the trust, in the long term most people will feel compelled to return to those companies that have earned their trust.

Trust is the long ball game. It's the differentiator you've been paying all those consultants to find. The reason the new company in the industry can make a big splash is that they can be reasonably trusted. They have no track record. Trust is theirs to lose. They say they'll deliver their product in 2 days and do it - they're already better than the market leader who was late on one shipment.

One final point. If a company only looks a whether customers trust them compared to the competition then they are probably no better than the competition. If people are skeptical of telemarketers, then being the most trusted of untrusted telemarketers is no prize. This is true for any industry. If your company is focused on being transparent, it probably in not actually concerned with being genuinly trustworthy. The shift to looking at each consumer as an individual and actually doing what you say you'll do - with every action and communication - will build a consumer base who is your for the long haul. They weren't baited by some promo price and won't compare you to your competition.

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