A Guide to Brand Transparency

Beyond a mere buzzword, brand transparency has evolved into a pivotal factor that shapes consumer trust, loyalty, and purchasing decisions. 

In this post, we’ll unravel the essence of brand transparency, its significance, and explore actionable steps to cultivate it.

What is Brand Transparency?

Brand transparency refers to the practice of a brand fostering honest, accessible, and open relationships and communications with the public. In simpler terms, it involves being candid and open about your products, the way you produce them, your business operations, pricing strategies, and core values.

To uphold brand transparency, the following steps are crucial:

• Communicate your policies and performance metrics to both internal and external stakeholders
• Demonstrate a readiness to acknowledge and accept mistakes
• Be prepared to offer genuine and sincere apologies in the event of errors
• Keep your customers informed about changes in pricing, instances of subpar services or products, and other significant modifications that impact the customer experience

In essence, transparency signifies the willingness to recognize that your organisation is not flawless. It also underscores your commitment to addressing customer concerns and enhancing the quality of your products.

Importance of Brand Transparency

Consumers are becoming more interested in understanding beyond just the contents of your products. They seek comprehensive insights into your material origins, how your products are made, your commitment to corporate social responsibility, and other related aspects.

In the event that you decline to make such details public, customers will actively seek this information from alternative sources. What’s even more concerning is the potential for negative sentiments about your brand to circulate. The following are some benefits of embracing brand transparency.

Cultivate Consumer Trust

In today’s interconnected and complex world, where issues like misinformation, data breaches, and privacy concerns are widely discussed, the brand that can earn consumers’ trust will come out on top. The way to build this trust is through transparency. A recent survey by Sprout Social provides interesting insights about transparency and trust:

• 89% of people believe that a brand can regain their trust by admitting a mistake and being transparent about the steps taken to resolve it.
• When brands are honest and consistently transparent, nearly nine out of ten people are willing to give them another chance after a bad experience. Additionally, 85% are more likely to stay loyal to them during times of crisis.
• Brands that prioritise transparency in their social media marketing strategies receive significant benefits, including increased consumer trust, higher sales, and an improved brand reputation.
• Consumers’ expectations for transparency are increasing daily, and establishing long-term relationships fosters lasting trust.

Foster Brand Loyalty

Transparency is the cornerstone of trust, and trust forms the vital groundwork for enduring relationships. When a brand nurtures strong customer connections, it lays the groundwork for fostering loyalty among its customer base.

A research from Label Insights reveals that 94% of respondents will remain loyal to a brand that prioritises transparency. Among these customers, around 75% are willing to invest more in products or services from a brand they perceive as authentic. Conversely, if a brand lacks transparency, customers have little tolerance for its mistakes and are quick to switch to alternatives.

When you openly communicate your actions, you demonstrate to your devoted customers that you value them. This conveys your understanding and appreciation for the role they play in your business’s growth.

Boost Business Expansion

Establishing robust customer trust and loyalty provides you with advantageous positioning, enabling you to command higher prices or introduce new products with ease.

Surveys have demonstrated that a minimum of two-thirds of customers are prepared to invest more in a brand that practises transparency. Such customers are more inclined to advocate for the brand, share positive experiences with friends, and leave favourable reviews. This surge in brand perception contributes to heightened growth and continued triumph.

Transparency also contributes to a business’s thriving by nurturing employee engagement and contentment. In fact, multiple studies underscore the significance of company transparency as the leading factor in determining workplace satisfaction. 

Promote Ethical Conduct

Integrity is frequently described as the practice of upholding ethical standards even when one is unobserved. It involves conducting oneself honestly and maintaining consistency in actions, guided by personal moral principles and beliefs.

For a business to embody integrity, transparency must be its foundational step. Transparency enables a company to establish its own set of principles, values, procedures, and regulations, while also showcasing a willingness to operate openly. Yet, it’s not merely about verbal affirmations; a brand must genuinely commit to upholding its values and fulfilling its promises to substantiate its authenticity.

How to Ensure Brand Transparency

Inquire About Customer Information Preferences

To begin, it’s essential to ask what customers are interested in knowing about your business. Make use of polls on social media and your website to gauge their concerns and preferences. The nature of inquiries will vary based on the range of services and products you provide, so understanding their specific expectations will guide you in determining the information you should share.

Define the Information to Disclose

Once you have compiled a list of inquiries to address, the next step is to outline the details you intend to share. Examine online engagement patterns, records of customer support interactions, competitive analyses, and keywords to identify the topics that should take precedence in your responses. It’s crucial to prioritise addressing significant and potentially contentious matters—like those concerning data privacy or child safety—to instil public confidence in your brand.

To put it differently, begin with addressing the “low-hanging fruit,” which are the concerns that can be easily tackled. For example, if your business operates a global supply chain, you can enhance transparency by divulging that your products are manufactured by adequately compensated adult labourers, as opposed to underpaid child workers.

Prioritise Data Privacy

As more business transactions move online, consumers are increasingly worried about how brands handle their data. With the rise of cybercrimes, especially due to COVID-19, many consumers are now hesitant to engage with brands that have experienced data breaches. A Verizon study found that almost half (45%) of individuals aged 18 to 24 are willing to share their data for a more personalised user experience. However, 69% of these respondents said they would avoid a company that has suffered data breaches.

This means that eCommerce businesses need to focus on safeguarding consumers’ data by implementing strict data privacy measures. In simple terms, you need to:

• Clearly explain to customers what data you need and why.
• Inform customers about how you will handle their data and whether they can choose not to share certain information.
• Establish internal standards for data processing and usage, ensuring your data policies comply with laws like the California Consumer Privacy Act (CCPA) or the European Union’s General Data Protection Regulation (GDPR).
• Publish and regularly update a comprehensive privacy policy that addresses these concerns. The public should be able to access your privacy policy whenever they want.

Create an Ethical Social Media Guidelines

In addition to establishing a data privacy policy, it’s essential to implement an ethical social media policy. A social media policy is a formal document that outlines how your company uses social media platforms, online communities, and forums. Essentially, it serves as your startup’s manual for using social media effectively. The primary objective of a social media policy is to define boundaries for appropriate conduct and prevent potential legal issues, negative publicity, or controversies.

Here’s what a standard social media policy includes:

• Your brand’s tone and manner
• Definition of confidential information
• Protocols for addressing customer grievances
• Guidelines for responding to customers and appropriate timing
• Collaboration guidelines for working with influencers
• Topics that should not be discussed
• Approaches for handling media coverage and engaging with media platforms

Ensure Your Company Adheres to the Modern Slavery Act

If your business involves selling products, it’s imperative to ensure that your company meets the standards set by the Modern Slavery Act. The Modern Slavery Act, a legislation introduced in the UK in 2015, has influenced numerous countries worldwide to address the issue of modern slavery within supply chains. By 2018, seven G20 nations had implemented anti-slavery laws, taking cues from the UK’s Modern Slavery Act.

Non-compliance with the Modern Slavery Act could lead to significant repercussions for your company. A notable example is Shein, the popular Chinese fast-fashion retailer. In the UK, Shein faced criticism in August 2021 for failing to disclose working conditions in its supply chain, a requirement under the law.

Ensure Your Organization’s Accessibility

To demonstrate your commitment to treating all consumers with dignity and respect, it’s essential to ensure that your company aligns with legal obligations for website accessibility. The specific laws may vary based on your jurisdiction, but generally, they typically entail the following:

• Offer text alternatives for non-text content, such as videos and images
• Guarantee that your website and app are compatible with screen readers
• Ensure that users who rely solely on keyboards can access your site and app
• Enable users to control timed content

By adhering to these principles of accessibility, you contribute to providing an inclusive digital experience for all users.

Establish a Supplier Code of Ethics

Developing a supplier code of ethics is a crucial step for your organisation to foster transparency across environmental, social, and financial aspects within the supply chain. This practice will not only encourage open reporting but also uphold responsibility concerning matters like environmental impact and human rights. However, codes of ethics hold value only when accompanied by actions that facilitate the desired transparency. You must consistently oversee your supply chain to ensure that all stakeholders adhere to your established supplier code of ethics.

Consider Environmental or Social Responsibility

Another aspect to contemplate while enhancing your brand’s transparency involves environmental or social responsibility.

Research has indicated that companies demonstrating social awareness tend to be more favourably received. A global survey conducted by Accenture Strategy unveiled the following findings:

• 62% of consumers in the US desire companies to take a stance on matters such as environmental sustainability, equitable employment practices, and openness.
• 48% of US consumers who are disappointed by a brand’s actions or statements regarding a social issue will express their discontent.
• 42% of consumers will distance themselves from a brand they find disappointing, and 21% will never return.

Develop a Robust Company Mission and Core Values

When your company’s mission and core values resonate with customers, it enhances the likelihood of their continued engagement and repeated purchases. Therefore, it’s crucial to effectively convey your company’s beliefs and the causes you support. Ultimately, brand transparency stands as a potent avenue to foster customer loyalty.

Promote Anti-Racism and Diversity

Merely stating that your organisation is inclusive and anti-racist is no longer sufficient. To showcase your commitment to racial justice and diversity, offer concrete instances to the public that illustrate how your company truly values these principles and actively works to advance the well-being of people of colour (POCs). Share demographic information about your employees and release reports that outline the strides you’ve made in promoting diversity.

Communicate and Share Policies and Guidelines Online

To ensure genuine transparency, it’s essential to make your transparency policies and guidelines are readily available online. By doing so, you enable everyone, including customers, to access the same information and hold your organisation accountable.

Establish Operational Procedures

While having formal transparency policies and guidelines is crucial, it’s not sufficient on its own. You must also implement processes to ensure that your team adheres to these policies. Develop an assessment mechanism to gauge the extent of transparency across the organisation, and institute a mentoring program to provide support to individuals who may need assistance in meeting these transparency standards.

Ensure Customers are Informed

Lastly, it’s essential to consistently update your customers about your business. Whenever there are modifications to your policies or guidelines, you should notify them of these changes. Failing to do so might lead to a lack of understanding about your business and hinder their ability to stay aligned with any evolving values your company may have embraced.

Some Great Examples of Brand Transparency By Companies

Christy Dawn: Brand Transparency

Slow fashion brands like Christy Dawn adopt a distinct approach from the practices of fast fashion labels. Christy Dawn prioritises sustainability through eco-friendly fabrics, fair compensation for its workers, and value for craftsmanship over mass production. However, these sustainable practices often lead to higher costs, which can be challenging for price-conscious consumers who still recall the budget-friendly prices associated with fast fashion brands.

To offer customers a clearer understanding of their pricing structure, Christy Dawn presents a comprehensive breakdown of garment expenses on its website. The company openly shares insights into labour costs, markups, rental fees, and fabric sourcing methods. Furthermore, it highlights that its production process takes twice as long as that of fast fashion counterparts. The brand’s commitment to transparency extends to its workforce, as it employs local artisans and seamstresses.

Research has revealed that unveiling cost details can have positive impacts on sales and customer interest, irrespective of whether the costs turn out to be surprisingly low or high.

Since most brands choose not to disclose their cost breakdowns, such transparency initiatives foster trust and enhance the brand’s positive image. In the case of Christy Dawn, cost-conscious shoppers find greater comfort in investing over $200 in a dress when they comprehend the brand’s commitment to fair wages and domestic production. Likewise, affordable brands can employ cost transparency to reassure customers of product quality while elucidating their strategies for maintaining lower prices.

Milk Makeup: Diversity and Inclusion

Since the introduction of Fenty Beauty’s foundation lineup in 40 shades, with other brands following suit, diversity has risen to the forefront of priorities for beauty companies. Similar to Fenty, Milk Makeup offers a diverse range of foundation shades and goes further by emphasising diversity throughout its operations. 

In 2020, Milk Makeup established five explicit diversity and inclusion objectives, openly displaying them on its website. The brand shares demographic details about its workforce, including the representation of BIPOC individuals. It also discloses its efforts to support marginalised communities and the extent of representation of models and content creators from diverse backgrounds on its social media platforms. These figures are updated biannually and offer insight into the company’s advancements in fulfilling its diversity and inclusion commitments. Importantly, these updates underscore the company’s ongoing dedication to the cause.

Surveys indicate that 4 out of 10 consumers view the inclusion of diverse individuals in advertisements with scepticism. Thus, maintaining full transparency concerning diversity efforts can help the public perceive a brand’s actions as genuine.

One Degree Organics: Transparency in Products

Product transparency extends beyond openly disclosing ingredient details. A significant portion of consumers, approximately one-quarter, also take notice of the sourcing methods for those ingredients. In instances where the components originate from farms with unfavourable labour conditions, failing to provide this information is misleading. 

One Degree Organics, a plant-based food company, takes transparency to a higher level. Not only do they reveal the ingredients they use, they also divulge the origins of these ingredients down to the specific farms. Each product page features an ingredient list that includes the names of the respective farms. 

Furthermore, they showcase brief videos that introduce the farmers behind the ingredients. Complete transparency forms an integral part of One Degree Organics’ business philosophy. The company goes the extra mile by personally visiting farmers to observe their operations firsthand. They’ve even established a dedicated Farmers page, which allows customers to delve into the backgrounds of the farmers. This approach enhances trust in their products and conveys the brand’s support extends to farmers globally.

Conclusion

Companies can leverage openness to pave the way for authentic relationships and loyalty. As businesses embark on this path, they bridge the gap between intentions and perceptions. This fosters an era where integrity and accountability drive not only profits but lasting brand resonance.