Consumers want transparency in their everyday purchases. As our use of technology grows, we have become more and more educated about our decisions and where we do business. In decades past we relied on advertising to inform us about our decisions.
The concern with advertising was that truth in advertising was rare, and the honesty and trust of the advertiser were often questionable. We are no longer limited to one-sided communication from the company we patronize; now we have a community and we can seek opinions and details in advance of our purchases through reviews, websites, and our own viral inquiries.
Stakeholders hold all the power in brand-stakeholder relationships today. When businesses lie about their activities, stakeholders will react negatively and affect the brand’s value. Lying to your stakeholders and deliberately hiding information that stakeholders are curious about (such as the ingredients in a food product) creates mistrust in the brand, which is why practicing transparency is so important, stakeholders react positively when they feel a brand is trustworthy.
By using transparency as a branding and communication tool, you are setting your brand up for success, as your stakeholders will perceive your communication and brand personality as being “real” and trustworthy.
If you are clear and truthful about your business activities, provide truthful information when questioned, and practice transparency in your business, your stakeholders will understand the motives and mission of your brand. Furthermore, through practicing transparency in your communication, stakeholders will feel that the business, brand and person/people behind these are more trustworthy. Your stakeholders might even support and defend your brand. Through this perceived trustworthiness, your brand will gain value, and especially when your actions and promises are fulfilled.
What business activities should businesses be transparent about?
Quick answer – you should practice transparency in all your visible business activities. The more you tell your stakeholders about your plans, activities, and mission for the brand (and follow up on these), the easier it is for them to stand behind and support the brand. You should practice transparency on any activities that have an effect on your product/service, and create more value for stakeholders. Letting your stakeholders know about the changes you are making to your brand and business that will make their experience better, may even get your stakeholders excited about these future plans.
How can you practice transparency successfully?
Here are a few tips/examples of how you can practice business transparency:
Announce your future plans for your business so your stakeholders can see what new products, services, and value you will provide in the future. Remember that your stakeholders are the reason you started your business, you are creating value for them, and they are the ones who need to get excited about and benefit from future changes in the brand and business.
Treat curiosity and questions from your stakeholders respectfully, answer truthfully as long as you aren’t revealing any business “secrets” (such as your accounting/bookkeeping information, or in-depth knowledge that competitors may use to get ahead). The dialogue between you and your stakeholders is the key to positive results in co-creation, brand value, word of mouth and ultimately sales.
Let your stakeholders understand your working processes. For example, if you are an online coach and provide services aimed at small businesses, let your potential customers know what to expect from the process. Use present or past clients as examples (provided they allow you to use their information), to clarify how you work, and give stakeholders an opportunity to understand and connect with your methods.
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