There’s been a long-overdue sea change in marketing: Customers are now in control of the relationships with brands, not the other way around. Their standards for brand transparency are high and their tolerance for lackluster experiences is low. Dissatisfied customers quickly move on to other brands. If you want lifelong, loyal customers, you must meet their expectations.
And while lasting relationships with today’s customers are contingent on your brand’s ability to deliver highly relevant, contextual, personalized experiences, there’s another critical factor that cannot be overlooked: trust. If customers can’t trust your brand, you can’t have their business.
Earning a customer’s trust — and in turn, their loyalty — starts with being transparent. So if your goal is to increase customer loyalty, brand transparency is absolutely essential.
What is Brand Transparency?
Brand transparency is all about being open and honest when it comes to your products, your pricing, your values, and how you do business overall. It gives customers a view into what your company is all about. Google recently cited brand transparency as a critical competitive differentiator.
“Over 90% of consumers say transparency by a brand is important to their purchase decisions.”
(Forbes)
Transparency is conveyed through your openness, your communication, your company’s degree of accessibility (and how available its people are), and even your willingness to acknowledge and admit mistakes.
Businesses aren’t always perfect, and not everything goes to plan. So whether you abruptly change prices, remove or change a popular service, accidently deliver a faulty product, or send out an email blast that definitely shouldn’t have been sent, all customers ask is that you’re honest about the “why” behind it, and/or what you’ll do to fix it.
How Does Transparency Garner Customer Loyalty?
The cornerstone of any lasting relationship is honesty and transparency. So naturally, if customers are going to forge a long relationship with your brand, they expect you to provide this.
“94% of all consumers are more likely to be loyal to a brand when it commits to full transparency.“
(ink.com)
The more a customer shops with you, the more you learn about them, particularly if they share their data and preferences. But are you providing opportunities for that customer to get to know you? The customer-brand relationship is a two-way street.
Visible and accessible customer reviews (yes, even the negative ones), frictionless paths to contact your support team, detailed information about your products and sources — these go a long way in helping customers learn about your brand.
And the more transparent you are, the more trust you establish, and the more customer loyalty you can garner. 56% of customers will be loyal to a company for life if it provides complete transparency (ink.com).
Why Brand Transparency Matters
Let’s take a look at some of the key benefits of focusing on brand transparency:
Consumer expectations have never been higher
The modern customer demands transparency, and you need to deliver on those demands. With ever-increasing customer expectations – and no shortage of competitors waiting to swoop in when those expectations aren’t met – you need to be clear about how you run your business, from procurement and ingredients right through to social policy and environmental impact.
This kind of transparency is an absolute must if you want to build trust and loyalty – and keeping information from your customers can have severe backlash. Instances like Volkswagen’s emissions scandal and Facebook’s data breach go to show the negative implications a lack of transparency can have. If you want to avoid damage to your brand from lost customers, boycotting and negative reviews, you need to be transparent from start to finish.
It builds trust and loyalty
More and more often, your customers are wanting to know what they’re buying into. They don’t just care about the end product – they want a clear understanding of the values, processes and intentions behind the brand they’re engaging with.
If you can be open about your mission, vision and values, and how they’re impacting your operations and decisions, your customers are likely to feel more confident in the choices they make. Why? Because this level of transparency creates a sense of authenticity and reliability that builds trusting, strong, long-lasting relationships.
From how you source your ingredients to fair pricing strategies, transparency presents significant opportunity. When your customers know where their products are from, how they’re made, and why they’re priced at the RRP they’re at, they’ll feel much more connected to your brand.
It provides a serious competitive advantage
Your customers are more informed – and more skeptical – than they’ve ever been before. If you can be transparent about your operations and processes, you gain a significant competitive advantage over brands that aren’t.
Transparent brands differentiate themselves by openly sharing their values, processes, and business practices. This openness not only attracts consumers who prioritize ethical and responsible brands but also fosters loyalty among existing customers. Trust, once established, becomes a key driver for repeat business and brand advocacy.
Companies like Everlane and Warby Parker have successfully leveraged transparency as a key differentiator. Everlane’s “Radical Transparency” approach, where they disclose the true cost of their products and details about their factories, has resonated with consumers, leading to increased market share and brand equity. Similarly, Warby Parker’s openness about their pricing model and social mission has helped build a loyal customer base and elevate their brand status.
5 Ways to Improve Brand Transparency
If increasing customer loyalty and delivering business results is your 2021 goal, being more transparent must be part of your strategy. Here’s five ways you can improve brand transparency this year:
1. Be open about data storage and usage
For years, customers were kept in the dark about how their data was used and where it was stored. In the past, not all brands made the effort to be clear and concise about data storage and usage.
However, over the last few years, we’ve seen major changes to advertising and data collection regulations. The majority of data you use to fuel your marketing efforts must come directly from the customer. The more direct you are about how you will use the data and what protections are in place to make sure a customer’s data remains safe, the better data you will receive in exchange.
2. Be Honest About Pricing Practices
Customers understand that, at the end of the day, you’re running a business. Making money is necessary. Although satisfying the customer’s needs and desires must remain your top priority, you have obligations to internal and external stakeholders, too.
Even a simple (but direct) explanation about how you price your products and/or services does wonders for establishing trust with customers. It also helps you retain more customers when pricing changes. For example, when Netflix raised the prices on their subscription service, they were straight-up with their customers: “Prices are being updated so that we can continue to offer more variety of tv shows and films” (theverge.com).
3. Communicate Sustainable Endeavors
Although customers understand you are running a business, they also love to see that your company has a purpose beyond the singular aim of growth and revenue.
Share with your customers any of the charity-based or community-focused endeavors you may be involved in. You can even recruit your customers to participate. Not only does this help the cause your company is championing, but it makes customers feel good knowing that a brand they support and patronize is working toward positively impacting their community and the world at large.
Here’s how US coffee retailer Intelligentsia is transparent about its involvement with the community:
4. Cultivate Better Quality Interactions
Today’s customers demand personalized 1:1 omnichannel experiences. But to deliver those experiences, you’ll need lots of high-quality customer data. Personalized experiences will lead to greater customer loyalty, particularly from high income earners, according to eMarketer.
If you’re transparent in the fact that you need a customer’s data in order to provide them better quality experiences, they’re more likely to share it. This is especially true when you frame it as a collaboration in shaping their brand experience. You can invite customers directly to state their preferences so that you can provide them with tailor-made, relevant 1:1 personalization, just like Sur La Table does.
5. Implement clear data practices
Imagine trying to navigate a city with a decade-old map—streets have changed, new buildings have appeared, and old landmarks have vanished. This is what it’s like using outdated or inaccurate customer data in today’s fast-paced business environment. However, maintaining your data isn’t just key for creating seamless, personalized experiences – it’s also vital for building trust with consumers.
Transparently communicating your data management practices and privacy measures to customers reassures them of your commitment to safeguarding their information and maintaining data integrity. So, broadcast these processes loud and clear. Mention explicitly how data will be used when you’re capturing customer data through pop-ups and sign-up forms, and have a robust, easy-to-locate privacy policy on your website for customers to check out exactly how, where and why you will use their personal data.
Case Study: How Patagonia Turns Radical Transparency into Competitive Advantage
Founded by Yvon Chouinard in 1973, renowned outdoor clothing company Patagonia is widely recognized not just for its high-quality products, but also its focus on radical transparency. Let’s take a closer look at some of the more impactful transparency policies Patagonia has put in place that help them grow loyalty and trust:
Sustainable practices: Patagonia places a huge focus on environmentalism. They use environmentally friendly materials, use recycled materials and are actively investing in reducing their carbon footprint.
Fair labor practices: From posting regular updates on working conditions to actively working to improve the lives of their workers, Patagonia is openly committed to fair labor practices in its supply chain.
Worn Wear program: Patagonia buys back old clothing from customers and refurbishes it, helping it find a new home instead of ending up in the landfill.
By taking a stand on environmentalism – an issue that resonates with many of their customers – Patagonia has forged a transparent brand image that customers feel genuinely connected to.
The Future of Brand Transparency
As customer expectations continue to evolve, brand transparency is set to evolve with them. In fact, several key trends are already beginning to emerge:
Trends shaping the future of brand transparency
Blockchain integration: Blockchain’s reach is set to expand, with technology being used in supply chain transparency. This will give consumers a watertight way to track their products’ journeys, from sourcing and manufacture to their hands.
Consumer-driven initiatives: Consumers will increasingly hold brands to higher standards, with crowdsourced audits and public ratings empowering shoppers to hold brands accountable. This next-level transparency will foster a new culture of openness and continuous improvement.
Digital marketing transparency: Trends like ad verification and influencer disclosure guidelines will drive greater honesty in marketing, helping consumers make informed decisions and trust brand communications more.
Embracing transparency in branding
At the end of the day, customers have the final vote on which businesses succeed, and which ones fail. That’s because customers control the relationship, and their purchasing power is their voice. If they are going to spend money and remain loyal to your brand, they need to feel good about the relationship. They need to trust your brand.Honesty is not only the best policy, it’s one of the best business strategies if your goal is to drive repeat purchases and convert first-time buyers. As you look for ways to increase customer loyalty, consider this simple-but-powerful step: be more transparent.
