by Privcap
October 31, 2016

Why ‘Open and Transparent’ Brands Win

The head of consumer products for RSM explains the brave new world of social media and transparency for brands—whether they’re ready or not for this marketing game change

Privcap: How important are peer-to-peer recommendations in the consumer and retail business?

Carol Lapidus, RSM: According to a Nielsen online survey, consumers only trust about a third of the information that they receive directly from brands. But they trust 90 percent of the information they receive from their personal connections. What that says is [you should] develop consumers who are going to share, who are going to like, who are going to refer your brand to others.

Consumers value brands viewed as honest and transparent. What does that mean in practice?

carol-lapidus-1
Carol Lapidus, RSM

Lapidus: The consumer wants to know that the brand is open about what the product does, what it doesn’t do, how best to use the product. They want to know all the information that’s necessary about a product. And they want to hear it in a concise manner. And if it’s the right information and it’s given to them in the right manner, they’re going to share it with their friends.

What can a brand do when it encounters a real or perceived drop in quality?

Lapidus: It’s so important for brands to not hold back information, especially in times of trouble when there is a question as to the product. Act on it immediately. As we saw years ago when we had these security breaches, a company like Target wasn’t as open and honest, and they lost a huge amount of their share of business in that year and in the following year. But you have other breaches where you had companies like Home Depot that are upfront, honest, told everybody exactly what happened. They didn’t lose any of their customers for something like that.

Using social media, brands must now put out sharable content. How different is that from old-school marketing?

Lapidus: Well, what we say to clients is, “The best thing to do is to put out good content.” So put out content about that product, but also put out content about your company, about the beliefs, about how you do your business, about your social and environmental, even political views. This is what’s getting the consumer talking right now.

What should brands do with feedback they receive on social media from customers?

Lapidus: One of our clients that sells fashion to millennials is online. They’re on Instagram. They’re on Facebook. They’ve got a really good social media platform. They listen to their consumer and they say, “Wow, that’s a great idea.” Or if it’s not feasible, they respond to them and tell them why it’s not going to work, but that’s such a great idea. And sometimes they’ll get some type of a bonus or a personal invitation to attend an event when they’re responding to something like this, because it’s really important to listen to the consumer.

The head of consumer products for RSM explains the brave new world of social media and transparency for brands—whether they’re ready or not for this marketing game change

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