“I’m not upset that you lied to me, I’m upset that from now on I can’t believe you.” ― Friedrich Nietzsche
We live in an era of mistrust. Fake news runs rampant and misinformation spreads on social media like wildfire. Consumers are understandably weary about everything from data breaches to how products are made. Because of this trust has quickly become one of the most valued commodities that we have. A study from Edelman says that 81% of consumers need to be able to trust the brand they buy from.
The relationship between business and consumer is like any relationship in life. A foundation of honesty and trust builds strong and lasting relationships.
In this article we will show you how transparency builds trust.
Transparency builds trust
There has been a lot of research to suggest that transparency builds trust with consumers. In fact one study found that 94% of consumers are likely to be loyal to a brand that offers complete transparency.
So what does transparency in business look like?
Transparency is operating in an open way without secrets and communicating clearly. The Edelman Trust Barometer report says that consumers want to be able to “trust the brand to do what is right”. This covers a range of considerations from supply chains to how companies manage privacy and data.
Consumers also care deeply how products are made. According to Nielsen consumers will spend $150 billion on sustainable products in 2021. Transparency means not just communicating what a brand is doing well but being open to scrutiny and being accountable even for challenges or things that could be improved. One example is McDonalds who ran a successful campaign to address negative rumours about its food head on and as a result, it built trust with consumers who saw the campaign as proactive and transparent.
Consumers expect transparency – empowerment
Transparency is not just about building trust, in fact conscious consumers expect and demand it. Younger people are particularly conscious about sustainability and do research about where they spend. Greenwashing will not fool savvy younger consumers. Moreover, a McKinsey study found that Gen Z are more likely to spend money on companies and brands seen to be ethical. These future generations are shaping how businesses will operate moving forward.
Social media has given consumers more control and forced big brands to be answerable to customers rather than sweeping things under the rug. A study by Sprout Social found that 81% of people say that social media has made brands accountable and in addition, 86% believe that transparency is more important than ever before.
Modern consumers give away data and money to businesses and expect honest and accountability in return. Transparency empowers consumers to make decisions about who they spend money with and what business practices they support. Transparency is an important part of the future of an ethical and sustainable economy.
Trust creates long-term loyalty
Action earns loyalty from customers. A recent global study found that purpose is key to earning loyalty. In fact people were four times more likely to to purchase from a brand that demonstrated purpose and six times more likely to protect that brand in a challenging moment. Another study found that 65% of consumers buy on the basis of their beliefs. This is basic psychology – people want to align with brands that they feel emotionally connected with and who give them a sense of purpose.
Brands can only prove purpose by taking real action, operating sustainably and being accountable.
The kinds of activities might include:
- Have transparent supply chains
- Create an open and transparent company culture with employees
- Offer insights into pricing and production publicly and with stakeholders
- Share vision, mission and values publicly and be accountable for them
- Be imperfect and show the human side of business
- Embrace social media as a tool for transparency
It is the dawn of a new age in business. Above all customers truly want the brand they interact with to be honest about how products are made. In fact consumers do not just want accountability and transparency but they demand it. Brands must embrace transparency in order to connect with people on a meaningful level and build trust and loyalty.