The Importance of Transparency in Business
Transparency is an issue that is becoming increasingly important to today’s consumer, and as a direct result increasingly important to modern business. Customers want to feel they can trust the companies they interact with and purchase from, and transparency helps to engender that trust.
However, there are limits to how much information can or should be shared, as certain sensitive data being made public can lead to unwanted negative attention from the media.
We work with thousands of clients to improve transparency and generate trust, without crossing the line into negative attention.
Attracting and Retaining Customers
Studies have shown that businesses with improved transparency are better at attracting and retaining customers than those that are cagier about sharing information. Around two-thirds of all consumers are happy to increase their spend if it means being able to purchase from a company that operates transparently, and as many as 94% say the biggest factor in brand loyalty is transparency.
These figures show that refusing to be transparent will ultimately undermine a business as consumers turn away to shop elsewhere. Businesses that are more transparent will naturally build better, stronger and longer-lasting relationships with their consumers as they are generating trust, which results in loyalty.
Ethical Supply Chain
One key issue customers are increasingly concerned about today is how ethical the supply chain is for the products they purchase. People want to know that the materials used are sustainable and responsibly sourced; that labour is fairly paid for and workers have a safe and healthy working environment; that the carbon footprint of the products has been minimised or off-set; and that any form of damage to the environment caused by the supply chain has been compensated for. Minimising the social and environmental impact of the entire supply chain and being open and transparent about this will help to attract the more ethically minded consumer.
Hidden fees are one of the biggest reasons people abandon online shopping carts. A 2017 Baymard survey found that as many as 60% of abandoned online shopping carts were left because of price discrepancies or extra costs being added at the checkout stage.
Being fully transparent all the way through the purchasing process can help retain consumer trust and get customers all the way to the purchasing stage. Simple things such as being completely upfront about costs, fees and charges from the beginning can make a huge difference to the number of sales that are closed, rather than abandoned.
Financial records are one area where some caution may be required in terms of openly sharing information. While releasing information such as tax payments or yearly earnings can help build trust, this information also has the potential to cause problems in some cases. This is because business finances are highly contextual, but the media will rarely focus on these factors.
We can help businesses of any shape or size improve their transparency to build customer trust, without causing damage to their online reputation.