The Honest Economy: A New Way of Doing Business

by Marcus Sheridan

transparency

It wasn’t long ago that in order to buy a car, you couldn’t even get cost information on the phone, much less view a web page that gave you every spec, photo, and no-haggle price you could possibly imagine.

But companies like CarMax realized their industry was screwed up.

In their mind, the way cars had been bought for years was ridiculous, and instead of “wheeling-and-dealing,” consumers just wanted to know they were buying an honest car, from an honest company, while getting an honest price.

CarMax filled that need, and today, their business is killing it while turning the industry and supposed “thought leaders” on their heads.

CarMax honesty

CarMax is changing the way people view the phrase “used car salesman.”

McDonalds: Unabashed Honesty

It wasn’t long ago that fast food chains were scared to death to tell consumers what was in their food. And they certainly didn’t want consumers seeing stats like calories, fat grams, etc., even though the government started requiring them to show this nutritional information somewhere in the restaurant—albeit in a hidden corner where no one bothered to look.

But today, companies like McDonalds are holding nothing back. Not only are they creating incredible educational and transparent campaigns like “Our Food. Your Answers.”—but they are also the first major fast food chain to post the number of calories next to all the food and drink items on their main menu.

Say what you want about McDonalds, but they’re embracing transparency like it has never been done before in the fast-food industry, and the positive PR they’re getting because of it is exceptional.

McDonalds Honesty

Not only do their store menus now show the nutritional information, but their website is loaded with all the facts.

“The Way Daddy Did It”

When I was still a “pool guy” back in the day, there was an 8-year period where I went on almost 2000 in-home sales appointments, many of which were an utter waste of time, all because my company was seriously lacking in consumer education and qualifying on the front end, which meant massive time wasted and money spent as a result.

Today, instead of continuing this cycle of wasting time on prospects that aren’t a good fit, my swimming pool company is literally the only one in the country that gives all pricing before we go out on a sales appointment. Instead of enticing shoppers with the “buy today or lose your chance to save big” crapola that is prolific in our industry (as well as thousands of others), we instead have elected to quit “dealing” and start being real in every way imaginable, basing our business model on 3 fundamentals:

1. We’re the best teachers in the world at what we do.

2. We embrace and celebrate our products, prices, and procedures.

3. We do dang good work.

Pretty simple, huh? This simplicity allows us to reach a pricing agreement in principle with literally 90% of all of our customers before we ever set foot in their home, something that most swimming pool contractors don’t come close to believing when I discuss our sales processes to the rest of the industry.

Notwithstanding, this transparent way of doing business has us on pace to crush sales and revenue records from our previous 12 years in operation—a trend only made possible because we’re steadfast outliers in a relatively antiquated industry that has always been full of slow adopters.

River Pools quote

At River Pools, we moved away from sales tactics and shifted towards a completely open and honest approach.

The Honest Economy

The examples of CarMax, McDonalds, and River Pools are just a small microcosm of what is a major shift happening in the world of business and marketing today. Instead of looking to keep business secrets in a smoky, dark back-room with a bunch of fat guys in a black suit, the trend we’re now seeing is a literal renaissance of doing business in an honest and transparent way that’s truly built to last.

Although it may sound cliché or silly to some, I’m calling this “The Honest Economy,” and I earnestly believe, because of the proliferation of the internet and its ability to help outliers stand out, this is the beginning of a trend that will dramatically impact the way marketing and business are done around the world as we know it.

My friends, the world is thirsting for transparency. They can’t find it on the news. And they certainly can’t find it in politics. So why not in business? More specifically, why not in your business?

Don’t wait for the others to join you. Be an outlier now—a  “Youtility” as my friend Jay Baer would say. Set the tone and watch the magical results speak for themselves. Trust me, it will be worth it.

With me?

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{ 36 comments… read them below or add one }

Jim April 1, 2013 at

I remember the first time I bought a car armed with the dealer invoice, dealer hold back and dealer commission, hidden rebates and other information I found on the internet. At the time, it was a new thing and I really felt that I knew exactly what I should pay.

With the massive amount of information available at our fingertips, businesses don’t have much choice. Add in the power of social media discussion and it’s even more important.

Businesses as open and honest teachers–who doesn’t like that.

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Marcus Sheridan April 2, 2013 at

Exactly Jim. They are being forced to make a decision that is a quite interesting one– tell the truth or be the next Kmart.

Oddly, some are still choosing Kmart. ;-)

Thanks for adding to the discussion bud,

Marcus

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Christina Schaefer April 1, 2013 at

Quite a crusade upon which you have embarked! I am in complete agreement, of course. Now, the trick is to get people to realize that the truth is not only right, it is smart. Your blog also brings to mind the classic I Love Lucy episode, where Ricky and the Mertzes wager that Lucy can’t go a full day without telling a lie, her husband and friends feel more than a bit stung by her unabashed honesty. http://www.dailymotion.com/video/xx7fbt_i-love-lucy-lucy-tells-the-truth_fun#.UVmV8TebrG8

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Marcus Sheridan April 2, 2013 at

Hahaha, GREAT video Chris, that gave me quite the laugh :-)

Thanks for stopping in for a visit,

Marcus

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George Thomas April 1, 2013 at

Marcus,
Great article as always.
Transparency = Trust / Trust = Customers / Customers = Word of Mouth / Word of Mouth = Authenticity through Brand advocates

So Marcus, what you have taught today is litteraly the first step for businesses to be ultra successful! I know our company uses your techniques and the formula I have listed above. Thanks for the awesome content.

George Thomas – @bigeasy_wbd

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Marcus Sheridan April 2, 2013 at

Love the equation George. Frankly, I don’t know why so many make it so hard. It works :-)

Marcus

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Nisha May 1, 2013 at

That just about sums it up.

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Jay Baer April 1, 2013 at

Excellent post, Marcus. You’re 100% right. Honesty is becoming a marketing and business attribute. It worked for Domino’s, too. Check out the great book on trust from Jonathan Salem Baskin, as well. Very smart.

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Marcus Sheridan April 2, 2013 at

Ahhh yes, I forgot about Dominos Jay. Another GREAT example.

Thanks my man. :-)

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Ruth Zive April 1, 2013 at

Marcus, companies are going to have no choice but to be more transparent and honest because social media and the Internet have finally put the power squarely back in the hands of the consumer. The consumer can lodge a complaint in only 140 characters, in an instant. We can do our due diligence, lickity split on Google. We don’t need to spend hours with a sales rep anymore, listening to their spin. Funny you should mention McDonalds. Check out their ‘Our Food. Your Questions’ campaign that they launched in Canada – http://yourquestions.mcdonalds.ca. It’s attracted a lot of attention as a brilliant marketing move. I think the attention is warranted. Would love your thoughts.

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Marcus Sheridan April 2, 2013 at

Absolutely Ruth. I’ve written and spoken at length about this campaign in every single conference and workshop I’ve done over the last year. People can say what they want about McDs, but this is simply incredible and something to be proud of.

Thanks!!

Marcus

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Barbara April 1, 2013 at

Hey Marcus!
I was one of the pioneers in Internet Auto Sales. Actually, it was my friend John who was the true pioneer and then brought me in. It was 1999 and he had been in car sales most of his adult life. He was also a big nerd who embraced the internet at inception. I had sold just about everything except cars, and I used to say “I can sell anything, but I won’t ever sell cars. It just feel slimy.”

John convinced me to join him in his brand new internet dept. at a major dealership here in Philly. He swore to me it was all transparent..”.like shootin’ fish in a barrel”, he liked to say.

That was a stretch, but I can tell you it felt great to help someone get the car they wanted with no B.S. We would answer emails, contact the client, find the car they wanted, bring them in for a test drive after we faxed them the invoice. Being the pioneers we took them ‘cradle to grave’ with the sale.

Since I’ve long left that business it has improved ten fold. Now the internet dept., at most dealerships, strictly handle the pre-sale and hand off to a sales rep on the floor to follow through. It moves more smoothly and eliminates the hate between the departments. When I started we were pariahs, according to the old school guys on the floor.

I just want to say to Jim…Yes, you can get all the info online now, but people still have to allow the dealership to make their share. It costs a lot of money to stock a dealership. Yes, most of them have earned their slimy reputations but, Rome wasn’t built in a day.

I can’t imagine you operating any business less than 100% upfront, Marcus. Success is earned, and you’ve certainly earned yours.
b

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Marcus Sheridan April 2, 2013 at

Wow, what a great comment Barbara, I loved this and the fact you were on the ground floor of web based auto sales.Very cool. Even better, you have witnessed the positive changes, and that’s something we can all witness with a smile.

Appreciate you support Barbara and thanks again,

Marcus

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Mark April 1, 2013 at

Hi Marcus,

Honesty is a human quality hard to grasp for many… Especially when mixed with business, money and power.

Here’s where government and bankers enter the picture with a mind for profit, profit and more profit, because it’s simple; they serve money and not what is best for the people.

I think it’s great that social media has spread throughout the world, but it has done little at this point of bringing real honesty and transparency to the online business world.

Search generates most sales and revenue online today and in the grand scheme of things, the majority of sales and consumers money still goes to buying shit that doesn’t help them.

Hacks, tech’s and very unsocial people happily make profits every day off of ignorant consumer’s losses.

I would hope at some point that social media would change the world and bring transparency and honesty to the business mix; the problem is it doesn’t exterminate bad people with bad intentions.

Transparency, honesty, openness – these are all human conditions and to be quite honest, most people outside of social media don’t give a shit; otherwise this wouldn’t be the case.

Lazy people will buy what they want to hear and unscrupulous marketers will gladly tell you whatever you want you want to hear so they can get in your wallet – regardless if they can deliver, or not.

Social media to change human condition; I don’t think so…

But I do certainly join you in the theme of your post; I would highly recommend folks to manage their businesses in an honest, open and transparent manner. This is where worthwhile work gets done.

The rest are just a bunch of greedy bastards that just want more money.

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Marcus Sheridan April 2, 2013 at

I somewhat agree Mark. The way I see it is that the internet has amplified all things– the good people, and the bad people. The good businesses, and the bad ones. The crappy products and the good ones.

But I think that’s always the case, in every dispensation, and the key is detaching ourselves completely from those we don’t align with and completely letting them go. Most will never change, and it’s best to wish them well.

Time will tell.

Thanks for your passion bud,

Marcus

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Don Stanley April 1, 2013 at

I’m locked, loaded and ready to go brother! Can’t wait to share this message during my keynote in Vegas this week. We’re gonna change the way marketing is done for the better! Thanks for leading the charge.

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Marcus Sheridan April 2, 2013 at

Don my man, I literally can’t wait to hear how it all went for you brother. Seriously, kick some butt and let me know how it goes!!

Marcus

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Darnell Jackson April 1, 2013 at

Excellent topic Marcus but I have to say McDonald’s has been hiding what’s in their food like MOFO for years.

How do I know?

Oh, that was my first job when I was 16 years old and I remember even back then they were advertising that they’re patties were 100% BEEF the boxes that we opened in the back to cook the patties said SOY right on the side of the box.

There was a big issue over this back then and even recently they got caught putting that pink slime in their meat. There’s nothing real about that stuff except for real profit for companies that would rather serve people near meat than the real thing.

Also McDonald’s food can’t be real if it won’t go bad, have you seen that video on YouTube where the food is left out and it never spoils?

I found a McDonalds french fry that had been under my car seat for who knows how long and it looked exactly like I had just dropped it. That was the last time I ate anything from Micky D’s.

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Marcus Sheridan April 2, 2013 at

So what you’re saying is that you love McDonalds, ehh Darnell?? ;-)

I get you man, I do, but pink slime or not, these guys are pushing health and nutrition and awareness and leading the way, and it deserves praise where praise is due in my opinion.

Even if their food never goes bad ;-)

Marcus

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Jeff Simmons April 1, 2013 at

Great examples of “honest marketing” in the consumer market Marcus.

Can’t wait to see more old-school B2B industries follow suit — it will be a refreshing change. Big opportunities await those who lead the way, I believe.

As my old boss used to say, “Our best clients started out as educated prospects.”

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Marcus Sheridan April 2, 2013 at

Your old boss was a smart man Jeff. :-)

And yes, the B2B world really, really needs to pick up the pace on this.

Best,

Marcus

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Jeremy Abel April 1, 2013 at

Hi Marcus,

This is an excellent post and speaks to the state of ethics in marketing. The more honesty and value we can deliver to customers (by answering their questions), the more trust they instill in the business. While content marketing has its benefits from an SEO standpoint, it’s also key for maintaining top-of-mind awareness. Who are people going to think of when making a purchase: (a) the company with bells and whistles, or (b) the company who answered each and every one of their questions (including those for which they never thought to ask) and brought them to the buying phase of the consumer decision making process?.

(Also brings to mind the story of the wind and the sun, competing to see who could make the passing traveler remove his coat. In the end, persuasion works best with calmness.)

Great post Marcus. Lives- keep changing them, my friend.

Thank You,

Jeremy

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Marcus Sheridan April 2, 2013 at

Jeremy, LOVE the story of the wind and the sun, great analogy there and it hits the nail on the head.

Always appreciate your support,

Marcus

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Lana April 2, 2013 at

Hi Marcus,
I am so on board with this. This is the exact approach I want for our Real Estate business. We are not a franchise and I like to refer to us as a Boutique Real Estate Company. We may be smaller in terms of the number of Realtors that work with us, but can offer more personalized service. We are not in the business to become landlords to manage a bunch of Realtors and make our money that way. We have much more flexibility with not being part of a franchise in what we can offer and I am working hard on trying to follow your example. I want us to be leaders in the new way of running a real estate brokerage. Starting with the website and blogging about all the most common questions we get asked to educating prospective customers prior to an appointment. Great stuff as always Marcus, yours is a blog that I never miss reading.

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Lana April 2, 2013 at

Not sure why my last comment does not show my picture.

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Laura Click April 2, 2013 at

Totally with you on this, Marcus. I also think another component to this is that people want information quickly and easily. They don’t want to call or go to the trouble of contacting a company only to find out their product or service isn’t in their price range. It saves everyone a whole lot of time to be upfront about pricing.

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iGoByDoc April 2, 2013 at

Hey Marcus,

Great post buddy.

So what happens when the world becomes transparent? It is one thing to know how many calories are in my McKillMe, and to know how much a pool costs.

I think good old Gary Vaynerchuck nailed it with his book “the Thank You Economy”. I think it will come down to what company cares the most for it’s prospects and customers.

The web is a funny thing, years ago we could tell clients that their website can make their company look as big or as polished as they want, but at the end of the day, especially in today’s world, that is just putting lipstick on a pig.

So, 100% agree with your Honest Economy… now lets raise that to, or pair it up with “Really give a crap about your customers economy”. The buck starts and stops there.

Thanks again for doing what you do man!

Doc

PS, just heard you on Brogans podcast. Even more respect for ya man!

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Andrea T.H.W. April 2, 2013 at

These days almost everyone searches for information before buying something, if the prospect finds everything then when he calls the sale has already been made. Maybe there are less contacts but more sales closed by themselves, so to say.

The second step of the Honest Economy should be to keep things simple and not written in legalese or buried in a 5 thousands words TOS. Imho. :)

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Helene Poulakou April 3, 2013 at

This so-called “transparency” culture… Well, sometimes, it’s just revealing what you want to reveal & making big fuss over it, so that it s e e m s like you’re being completely transparent, that you’re talking about your business, bla, bla — but without actually doing so.

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Quote Software April 4, 2013 at

very nice post ……..

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Wade Balsdon April 4, 2013 at

Awesome post once again Marcus. This reminds me of the movie “Tin Men” with Danny De Vito and Richard Dreyfuss-They pulled every con in the book to sell their product. That attitude is probably why the sales profession has got the bad rap that it does today.

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Marcus Sheridan April 9, 2013 at

Appreciate it Wade, and hope you’re well bud!!

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Johnny Bravo April 10, 2013 at

Honesty and integrity is the most important aspect of any business. I first saw how this can work in the online arena from Pat Flynn’s blog. I run my own business and blog the same. Thanks for sharing.

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Pitt Goumas May 2, 2013 at

I didn’t know McDonald’s were the first to mention calories with their food and drink items. Thanks for the information. Great post as usual!

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Jeff G May 8, 2013 at

I’m seeing the same need for honesty and transparency in the category I work in, retail banking. The need is even more pronounced now that more and more people prefer to bank using a mobile device (about 60%) instead of visiting a branch (20%). PwC came out with an interesting series of studies on retail banking which show that increasing focus on relationship building is core to improving bank revenue. Your notion of honesty fits right into this recommended trend.

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umbrarchist May 14, 2013 at

Ever heard of the British Spitfire? What about the P-51 Mustang?

Those machines were flying 25 years before the Moon landing. 400+ mph!

Why are we redesigning cars? So we can get specs from Car-Max. Why are we supposed to care about the specs of antiquated technology that they are only changing as part of the marketing strategy?

Where does the economics profession tell the people of every country what they lose on the depreciation of automobiles every year?

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