{"id":1169,"slug":"rule-name-credence-good-problem-explicitly-propose-liability-structures","title":"R8 — Name the credence-good problem explicitly with prospects; propose liability + verifiability structures rather than projecting unwarranted confidence","kind":"rule","scope":"business","status":"current","audiences":["kevin","candid-team"],"topics":["psychology-aversion","credence-goods","trust-repair"],"reference_body":"**Rule:** Be **explicit with prospects about the credence-good problem**, not coy. Name it in sales conversations. Propose the liability and verifiability structures (clear scope, documented milestones, transparent metrics, third-party-auditable references) that mitigate it.\n\n**Why:** The instinct of a marketing agency is to project confidence and remove perceived uncertainty. The sophisticated trades buyer is **already aware that marketing services are a credence good** ([[marketing-services-as-credence-good-for-gc]]); pretending otherwise reads as either naivety or dishonesty. The Dulleck-Kerschbamer-Sutter 2011 finding ([[dulleck-kerschbamer-sutter-2011-liability-verifiability-credence-goods]]) is that **liability is what produces market efficiency**; offering liability is the highest-trust posture a vendor can take.\n\n**How to apply:**\n- In sales conversations, name the credence-good problem: \"Marketing services are hard to evaluate from outside — you can't tell whether what you bought was good marketing or just a good-looking website. Here's how we structure to address that.\"\n- Concrete liability structures Candid can offer: milestone billing tied to inspectable deliverables; references prospects can call **without notice**; written scope with named-deliverable check-ins; the kill criteria from [[rule-engineer-explicit-kill-criteria-into-engagements]]; published audited-reputation methodology from [[rule-build-candid-audited-reputation-infrastructure]].\n- Acknowledging the problem is itself **competence-attribution signal** (Brief #2: [[kim-ferrin-cooper-dirks-2004-competence-vs-integrity-trust-repair]] — competence-violation framings repair via apology-shaped acknowledgment).\n\n**Cross-cluster:** This is the explicit operationalization of Brief #1's [[rule-concede-credence-good-problem-make-marketing-inspectable]] at the sales-conversation level.","rationale_body":null,"metadata":null,"links":{"outgoing":[{"slug":"research-brief-trust-networks-in-group-reputation-may-2026","title":"Research brief: trust, referral networks, and in-group reputation in Ontario's trades economy (May 2026 — Foundation Brief #3)","kind":"reference","scope":"business","link_type":"relates-to"},{"slug":"dulleck-kerschbamer-sutter-2011-liability-verifiability-credence-goods","title":"Dulleck, Kerschbamer, Sutter 2011 (AER) — credence-goods lab experiment; \"liability has crucial effect, verifiability minor, reputation little influence\"","kind":"reference","scope":"business","link_type":"depends-on"},{"slug":"marketing-services-as-credence-good-for-gc","title":"Marketing services are a near-paradigmatic credence good for a GC buyer","kind":"reference","scope":"business","link_type":"depends-on"},{"slug":"kim-ferrin-cooper-dirks-2004-competence-vs-integrity-trust-repair","title":"Kim, Ferrin, Cooper, Dirks 2004 (JAP) — competence violations repair via apology; integrity violations repair via denial; opposite mechanisms","kind":"reference","scope":"business","link_type":"depends-on"},{"slug":"rule-concede-credence-good-problem-make-marketing-inspectable","title":"Rule: concede the credence-good problem; make marketing as inspectable as possible","kind":"rule","scope":"business","link_type":"relates-to"}],"incoming":[]},"created_at":"2026-05-25T13:34:11.279Z","updated_at":"2026-05-25T13:34:11.279Z"}