Transparency matters in every aspect of our lives. It matters in the relationships with our partners, our family and friends - and it especially matters with the businesses we buy from.
Indeed, research has shown that more than 90% of customers say transparency is one of the reasons they’ll buy from a company (or not).
But what is transparency exactly, and how can you be a more transparent business? And how much does it really matter?
In this article, we find out.
What Is Business Transparency? (And How Important Is It?)
Imagine a time when you were deceived in life and eventually learned that you were deceived.
It hurt, right?
Maybe you didn’t trust that person ever again.
Maybe the deception rankled so much that you couldn’t trust anyone ever again.
It’s the same when it comes to business. If you as a business deceive a customer and they find out, they won’t trust you anymore.
And the thing is, this has a huge knock-on effect. When a company is deceitful and is found out, they lose potentially loyal customers. And loyal customers are hugely important because it costs much less to retain existing customers than it does to constantly find new ones.
Moreover, if you’re deceitful and are found out, there is every chance that the customers who were deceived will leave negative customer reviews so that more people learn about your taste for deception.
Ethics, of course, isn’t what we do when people are looking. It’s what we do when people aren’t looking. As such, the core reason your business should be transparent is because it’s simply ethical. It allows you to uphold a gold standard of values by which your entire business - including all your employees - submit to.
Business transparency, then, is you as a business making a commitment to being open about who you are and what you do. This extends to everything, including how you source your products, where you source them from and so on.
For instance, we’ve seen so many examples of greenwashing that it’s untrue. Greenwashing is when a business claims to be environmentally friendly - but over-exaggerates their claims. In other words, they’re giving a false impression about who they are and what they stand for. They’re gaining customers who want to buy from a brand who’s doing their bit for their environment, but they’re misleading said customers in the first place.
Ultimately, business transparency creates trust. And when you create trust as a business, you’ll gain more loyal customers.
But something more than that happens. When you’re open and communicative with your customers, and when you do the right things for them and the planet as a whole, you lead and others follow. You’ll set examples, raise awareness and persuade your customers to buy into what you’re doing away from your business pursuits, such as charitable donations.
How To Be More Transparent
Demonstrate a Sustainable Purpose
71% of customers say they prefer to shop with businesses who share their values.
Meanwhile, more and more customers are environmentally-aware these days, which means that more people want business to be sustainable.
As such, there are two recommendations here: One, it’s important that your business finds a purpose that goes beyond mere numbers. In other words, as important as making sales is, it’s now equally important that you undertake charitable and sustainable endeavours. This could include sourcing your products sustainably, switching to organic packaging, donating a percentage of all sales to a charity and so on.
These are just some ideas.
Secondly, you need to communicate your purpose to your customers. Make them aware of what it is that you’re doing. If your company is championing a sustainable cause, let us know! :) Customers will buy into your positivity, and you may inspire others to - in their own small way - help change the world.
More than anything else, don’t mislead your customers by exaggerating your purpose (see above for greenwashing).
Get Your Employees To Buy Into What You’re Doing
It’s not enough that your business is transparent and sustainable. Your employees must follow your example and buy into your culture. Otherwise, this just won’t work.
Make sure that your employees understand your values, as well as what information you share. Keep them in the loop with everything that’s going on. This prevents rumours and distrust and encourages your whole team to be open and transparent.
Engage With Your Customers - Share Stories
Thanks to the rise of social media, blogs and the internet in general, we’re now able to see the faces behind the businesses we love.
For example, zero waste company Upcircle Beauty’s co-founders Anna and William Brightman have given interviews that explain the origins of their company, as well as their reason for starting a zero waste company. Their stories and their background resonate with people - their stories are our stories, and such transparency encourages us to do business with them.
Meanwhile, brands are using Instagram Stories and suchlike to share behind-the-scenes footage of what really goes on at their business - where their products come from, how they’re made and so on.
This kind of engagement makes people positive about brands. It also makes the brand itself more open and more trustworthy. But you can do more. You can also humanise your brand by sharing candid, real-life experiences that you as an entrepreneur/business leader have been through. How did you get here, where you come from - and where do you want this journey to take you?
By bringing your customers onboard like this, you’re creating trust and transparency, and this is perfect for building long-term relationships.
Be Clear About What You Do With Online Data
There are many ways to be more transparent as a business offline - but what about your online activities?
For the last few years, how online businesses store and use their customers’ data has been a hot topic. Indeed, a few years back customers never really knew what a business did with their data. Things eventually came to a head, and customers now want online businesses to be 100% transparent about how they handle data.
Naturally, data collection is really important for online businesses. There is certain data you as a business need to help you understand more about who your customers are and what they want and need. But it’s essential that you don’t use their data for unethical reasons, and it’s also important that you communicate on your website exactly how you’ll be using their data.
Don’t use vague language - be direct. Don’t leave anything open to interpretation.
There are many ways a business can be more transparent, but it starts with those at the top leading from the front. Where you lead, others will follow. When you set examples and don’t waver from your principles, your employees and your customers will listen and buy into what you’re doing.
This will not only help your business to thrive, but it can also inspire and encourage others to do the right things, too. Ultimately, a transparent business can create a better world.