As we’re all aware by now, advertisements don’t exist to tell the full story about the quality or “real value” of a product – they exist to sell. The lack of transparency in this case is known as asymmetric information. Simply put, people make purchases without knowing everything about the product or the company that sells it – advertisements help us justify our purchases in a world of asymmetric information.
Enter Michael Spence, a world-renowned economist and recipient of the 2001 Nobel Memorial Prize in Economic Sciences. He was one of the first to formalize the argument for signaling, a common solution to the problem of asymmetric information. In economic terms, signaling is defined as the idea that one party (termed the agent) conveys some meaningful information about itself to another party (the principal). When you combine this idea with the notion that people don’t have time to do much of their own research, you can understand why a signal has to be just that – a mark that encodes a deeper, more meaningful message about something. People need to see it and immediately get it.
What comes to mind when you see these signals?
All of these organizations provide a clear signal that help you (the consumer) deal with information asymmetries. Specifically, these signals enhance the transparency around energy efficiency, environmental protection, and Web security. Ultimately these signals give you confidence that the company or product displaying it has been validated by a third-party which has done the research for you about a potential consumer question or concern. Consequently, these signals have proven to increase trust, comfort, and most importantly sales for businesses in situation where they need or want to convey something important…so important that it requires an independent third-party to verify it.
STELLAService solves one of the longest-standing and most painful and frustrating information asymmetries – customer service quality. How can you know anything about the customer service you’re likely to receive from a company if you’ve never purchased from it before? STELLAService is THE SIGNAL that puts this issue to rest. When you see the STELLA’ seal on the Web, you can rest assured that you will be taken care of as a valued customer by the company displaying the seal.
While the Web sometimes increases information asymmetries by widening the physical gap between consumers and merchants, it’s also an amazing tool for the pursuit of something seemingly impossible…perfect information. We’re thrilled to do our part in providing more transparency in the online marketplace, and who knows, STELLA might just be that signal that gives you the confidence to buy those sweet new kicks you’ve been eyeing!
