How transparent are corporate terms? How it affects brand affinity

How transparent are corporate terms? How it affects brand affinity

Do you read online privacy statements? Or car rental agreements? Or insurance policy terms? Do you understand how transparent are corporate terms?

I certainly don’t as a rule. Going over 3 pages of detailed terms, sprinkled with ‘heretofore’ and ‘therein’ isn’t my idea of fun. If I’m renting a car, as long as I get a reasonable rate, I’m good to go. I turn off when I see this kind of muck (picked up by VisibleThread Web from the US Bank web site):

If you do elect to provide your personal ID, password or other information about your accounts with us to an aggregation service, you will be unable to contest the validity of any U.S. Bank transaction initiated by the aggregator, whether or not you were aware of the specific transaction.

This is just 49 out of 3365 words that we picked up in the US Bank online privacy policy. Flesch readability level of 3 for this snippet. That means you or I require an advanced degree to understand it.  So understanding how transparent are corporate terms matters.

So I wanted to blog about transparent ‘terms and conditions’. How transparent are leading brands terms? What effect does complicated language in the terms have on the brand experience for your customers? Does it affect brand affinity?

If you’re responsible for corporate communications, are a CMO, or have a brand integrity remit, you should read on.

What prompted me to write about transparency?

Recently, I had a small run-in with Irish airline Aer Lingus, who I have to say I really like. Although now, a little less so. I doubt they are even aware of my grievance, but it left a sour taste. I’ll explain. The issue concerned frequent flier miles. Turns out the miles I had accumulated during 2011/12 were not usable any more. Apparently, I had not flown with them enough in the current year to be part of their premium level frequent flyer club. I could understand that. I went online however intending to book a trip using previously accumulated miles, only to find I was unable to. There was some clause that I never read in the ‘terms and conditions’, stating I needed to be a premium member to avail of miles.

Now in my opinion, this policy was not reasonable, and it was non-transparent.

When do transparent terms matter?

For many of us, the only time we really look at the terms is after the fact. After a fender bender in a rental car, or when some scammer has put $3000 worth of phone calls on our credit card. Or in my case when I expected to be able to book a flight based on accumulated miles.

And here’s how it plays out: We find out we’re not covered. Maybe we can’t withdraw money from our bank. Maybe we can’t make an insurance claim.

We call the ‘customer care’ helpline. The call center rep quotes us back paragraph 3.2.4. It’s something about ‘indemnity’ or ‘qualification criteria’. It’s a clause buried in a long sentence, likely expressed in passive voice, with liberal sprinklings of legalese. Bottom line, we’re not covered. We argue on the phone that it isn’t ‘reasonable’. Joe, the rep spends 25 minutes with us; we hang up frustrated. Joe’s time costs his employer money. Our time costs us emotional energy and delivers a bad brand experience.

So, we promise ourselves we’ll never use that brand or company again. Maybe we keep that promise, maybe we don’t. The experience leaves a bitter taste. We feel powerless. Those with a calm disposition let it wash over, the majority of us simmer a little. We moan to our friends and share our negative story. Maybe we vent online.

The brand is under attack at ground level. Even if the terms were legally correct, we feel hoodwinked. Emotionally, the negative experience lingers long. The brand needs to work hard to make up ground.

For brands, a loss of trust or a negative experience like this will be a big factor in our next purchase decision. You’ll recall I mentioned my ‘miles issue’ with Aer Lingus. I’m writing this on a transatlantic with US Airways. not Aer Lingus. That might tell you something.

But, do other big brands do any better with transparency? I was curious.

Some more analysis – how privacy statements for 5 leading brands rank for transparency.

So, I did this small experiment. I took the online privacy statements of 5 leading brands (4 of the 5 are banks) and analyzed them with VisibleThread Web. Now clarity in this context means analyzing the readability attributes of the text. For instance, proportion of dense and long sentences or passive voice. I also wanted to see the readability score using a pretty well known readability measure called the Flesch Reading Ease Index.

Here are the brands I chose:

Here are the results of analyzing the online privacy policy on each brand site:

VisibleThread Web Online Privacy statement Analysis

Some quick takeaways at summary level on the 5 metrics:

  1. Length – A typical printed page contains 300 words. So US Bank and Apple both have over 8 pages worth of text, 3365 and 2510 words respectively. Now, that’s an awful lot of stuff to get through.
  2. Long Sentences – The Long Sentence % is a particular worry. In this analysis, long sentences contain over 20 words. We recommend aiming for 5% or less in web copy. All of our sample privacy statements ranged from 4- 7 times the recommended amount. With web content, people scan and move away quickly. This content is uniformly long. The net effect is that the message is likely hard to review.
  3. Average Sentence – The result is not good, ranging from 14 to 20. Just like long sentences, when your average sentence is long, you place a large cognitive burden on the reader.
  4. Passive Sentences – Ranging between 14% and 16%, the passive voice percentage should be so much lower. In fact some would argue when dealing with critical obligations, it should be 0% or close to it.
  5. Readability – Poor readability level. A ranking of between 20 – 35 on the Flesch readability index, means the reviewer must possess at least an advanced degree to understand the content. It means the content is complex and likely inaccessible when skimmed. Aim for 50 or above.

Interestingly, some brands that you assume would be quite transparent (e.g. Apple) didn’t actually have a very accessible privacy policy. Scarily enough, this is more complex than even financial institutions! On the other hand, Ally (a US based bank) which scores well on customer satisfaction, also came out on top in our little experiment.

I show an example sentence that VisibleThread Web picked up from the Apple policy below. Try to see if you can understand this on a single read:

For other personal information, we make good faith efforts to provide you with access so you can request that we correct the data if it is inaccurate or delete the data if Apple is not required to retain it by law or for legitimate business purposes.

Light Blue – long sentence
Maroon – passive voice

I wondered how Steve Jobs might have reacted to this!


In summary:

  1. Terms are important and generally only read when there’s a dispute or claim.
  2. Poor customer experience due to unreasonable terms hurts your brand.
  3. If you communicate terms in a complicated way, you will frustrate your customers and may lose them. Your brand affinity will lessen.
  4. When we look at online privacy policies, it looks like many brands have real issues with complexity in their communications.

If you want to see how your web site content scores for transparency, or even just to play around, sign up for a no-obligation 7-day free trial of VisibleThread Web.