One of the most important aspects of building a brand name and winning over the trust of customers is transparency. For a business, transparency involves being open about the operations of a company and sharing all relevant information with customers and other stakeholders. The globalized business world revolves around competitive marketing approach, which means that firms offering a more open and honest experience would win a significant proportion of the market share. In order to build long-lasting relationship with customers, it is essential that businesses are forthcoming about the information that impacts customer experience.
Transparency acts as an assurance to customers that the company’s operations, financials and marketing campaigns are not designed to deceive or fool the customers; rather those systems are there to assist and improve customer experience. Customers are often wary of large corporations, their intentions, products and ability to financially exploit them. In order to put these suspicions to rest, transparency has become necessary for gaining back trust.
How Transparency Benefits an Organization
Transparency is the stepping stone to developing relationships with customers, since it sends out a bold message that the company has nothing to hide and customers will be treated fairly. If customers know that the business is going out of its way to proactively share information, it makes trusting the brand easier and it is likely to result in more loyal customers.
Builds Brand Value
Businesses need to understand the difference between a commodity and a brand, as commodity suppliers are replaceable, but a brand has an advantage of a loyal customer base. In order to build a brand, transparency is one of the most essential pre-requisites, since customers want to know what the business does and how it goes about achieving its goals. Transparency, for businesses, translates into brand equity, which in turn generates more revenues and profits for the company.
If a company is open about its operations and shares all vital information with the customers, it becomes convenient for customers to see how the process works, which is likely to encourage a sense of inclusion and recognition with the brand. In times of trouble, delays or mismanagement, transparency would make customers more understanding since they would know what went wrong and the company’s efforts to rectify the mistake will be visible as well.
Enhances Feedback Mechanism
Transparency boosts and enhances the feedback mechanism, since customers know exactly how the operations of a company work; they can provide more insightful and actionable feedback, since customers are familiar with the limitations the company faces. Starbucks received more than 150,000 ideas for new products and services through its online portal with more than 2 million votes which helped the chain determine the popularity of its products and locations.
Transparency is likely to boost overall business and sales, given the high level of confidence and trust customers place in a transparent business model. It is relatively easier for big brands to introduce new and innovative products/services, because there is greater chance of success as there is no shortage of early adopters. For example, when Apple first introduced its iPad, the company had trouble keeping up with demand, although the product was new and had not been tested in the market before.
Sharing information with customers is one aspect of transparency, but it is closely interlinked with internal transparency in an organization. Employees and managers should be able to see what is going on in an organization to carry out their duties effectively. Higher level management often falls short on sharing adequate information with the employees and managers, which creates a feeling of ambiguity, about their roles, responsibility and the direction of the company. As reported by a recent poll, 71% of employees felt there was a lack of internal communication and they didn’t fully understand the goals they are set out to achieve.
Lack of transparency impacts the work environment adversely, since it discourages engagement at workplace, which is bad for morale. Majority of workplace problems can be linked to lack of transparency and poor communication.
Ways for Businesses to Increase Transparency
First step in enhancing transparency involves judging the customer perception about the company. It is important to determine how customers see the company in order to decide what information to share and how. Surveys, focus groups and interviews can be conducted to gauge the customer perception.
Companies should ideally adopt a culture where information is available to customers, whether or not they ask for it. In the same way, companies should try and familiarize customers with the philosophy, mission and core values of the company.
It is important to be honest and open about information, because giving exaggerated or misleading information will only work for a while, after which the brand will lose credibility for a long time to come.
It must be ensured that the information is shared in an appropriate and timely fashion, which means that a company, should be forthcoming about details when needed and deliver them through appropriate and accessible channels.
If a company is using customers’ data for its operations, it must be disclosed clearly and it is important to seek permission beforehand. This will develop trust between the company and customers.