The digital age is transforming the way we do business in all aspects. From a marketing perspective, truth can no longer be considered an oxymoron in sales or advertising but rather a necessity as businesses compete in an increasingly transparent marketplace.
The role of marketing in the past has been to communicate a message to consumers that their brand or product offers qualities they don’t necessarily possess or even to go as far as telling consumers which qualities matter. This strategy worked well in the past when the brand’s voice was the only voice to be heard. Truth in advertising was something to down play or ignore. In the social media age, that era is over as consumers become savvier with the ability to engage in their own product research and reviews.
Changing Business Dynamics of the Digital Age
All consumers have a voice that can instantly communicate and be heard around the world through the use of digital tools and social media. As a result, consumers are now increasingly using their voices to call out injustice and dishonesty. For businesses and brands, this means that truth is the only justifiable competitive advantage with honesty and integrity being imperative for success. Companies will now be judged not on what they say but rather what they do. What will count are not the promises companies make but the promises they keep and consumers will now hold you to account for it. Honesty and fostering trust are two cornerstones of ethical norms and values for marketers. Marketers must realize that consumers now determine what is true and that every communication medium will be used to form those conclusions.
Hotels are excellent examples of businesses that have been forced to relinquish control of their marketing message in favour of managing new social media channels like Trip Advisor where real customers post reviews and photos of the product contrary to what the hotel may have marketed. Consumers are listening to each other more than ever rather than the business.
When Marketing becomes a Liability
Mis-selling has garnered major attention around the world and is becoming a huge liability for companies that have failed to give up control of its marketing message and concentrate more on building a culture of authenticity within the company from the employees up. Legal cases are especially rising in the United Kingdom particularly in the financial and telecommunications sectors while lawyers are re-positioning themselves to capture business from what is becoming widely known as a source of litigation. According to Money.co.uk, one of the largest providers of credit card insurance and ID theft protection in the United Kingdom was declared guilty of mis-selling. In India, the Securities and Exchange Board of India recently stated that it was highly concerned with the surge of rampant mis-selling of financial products in the country. The regulator is now working with the Indian government to implement rules to regulate multi-level marketing firms and other businesses. Regulatory bodies around the world have already made statements or implemented policies with the intent of protecting consumers.
Unfortunately for some businesses like major banks in the United Kingdom, the advice and warnings come too late as they are now being forced to compensate thousands of consumers who were mis-sold insurance products. In a pilot study conducted by the Financial Services Authority of the UK, it was found that 90% of deals sold to “unsophisticated” customers broke at least one rule.
Truth remains a Competitive Advantage
Ultimately, companies must acknowledge that employees play a critical role in the marketing message and they are now more than ever “brand ambassadors.” According to an article in the Direct Marketing Association blog, businesses must eliminate flawed bonus schemes and commission packages in order to realign business practices so that the customer is put at the heart of what they do. Many businesses are now reviewing their consumer messages, practices and policies to ensure that they prevent mis-selling and future liability while consumers are engaging in their own research to learn how to protect themselves and complain about their financial services if they have been a victim of mis-selling.
Past research and in-depth case studies by Unerman and Baskin report that more than 50 global brands has showed us that truthful brands deliver sales, profits, and life-long relationships. Truth is the competitive advantage. Manage your organization’s transparency and create a culture of authenticity to ensure your marketing messages don’t become a liability. Before reviewing your company’s insurance policy, take some good financial advice and make sure you have double checked your honesty policy. You might just need it!