Executive Summary

• Business transparency involves open communication about your business practices between you and your stakeholders, including consumers, investors, and brand partners.
• Transparency is an important factor in building brand trust and strengthening brand reputation in the eyes of your target consumers. 
• Common challenges in maintaining transparency include fear of backlash, balancing transparency with privacy, and staying consistent in messaging.
• Reinforce your journey to transparency by being proactive, keeping your messaging consistent, and owning up to ways you can improve as a brand. 

Transparency and Brand Reputation 

Transparency is an underrated business strategy for brands looking to elevate their reputation. Although airing out your business practices and commitments in front of your audience and stakeholders may sound risky, examples show that it yields undeniable benefits.

With consumers demanding more from their favorite brands and artificial intelligence increasingly taking the zest out of brand interactions, brands that incorporate transparency in their business practices unlock a valuable new way to connect with their consumers. In fact, 94% of consumers say that they are more likely to be loyal to a brand that’s transparent about its principles, procedures, and products. 

Transparency demonstrates accountability, an ability to respond to feedback, and a commitment to serving consumers a quality product—in turn, making customers more likely to trust your brand and want to buy from you. Building transparency into your brand strategy will allow you to build stronger relationships with your customers and pave the way for more joyful interactions.

What is Business Transparency?

Business transparency is the tactic of providing clear, honest, and open communication between a business and its stakeholders about its policies, actions, and decisions—these stakeholders may be employees, investors, or consumers.

Business transparency involves a few key elements:

• Open, clear, and easy-to-understand communication 
• Accountability and willingness to address mistakes
• Visibility into business practices or procedures, including supply chains, pricing, and operations

Examples of business strategies that involve transparency might include a brand spotlighting the factory where its product is made or the farm where its materials are sourced from. Another example may be sending out an email campaign to consumers taking accountability for quality or shipping issues. Transparency may also involve using data and evidence to support your claims, providing tangible evidence of how your practices accomplish what you say they do.

Transparency has the value of demonstrating accountability to consumers, employees, and investors by creating a “we’re all in this together” type of approach. This approach can strengthen relationships and build trust among your consumers, employees, and investors while differentiating your brand in competitive markets.  

How Transparency Enhances Brand Reputation

Transparent practices can have resounding impacts on brand reputation if implemented properly. Consumers value authenticity—as much as 86% of consumers prefer an authentic brand image—and transparency presents a brand as more authentic and reliable, setting the foundation for stronger relationships. Just like we value friendships built on honesty and trust, consumers want brand relationships that center around the same values.

Through transparent practices, you may be able to accomplish all the following:

• Build brand trust – Consumers respect and value honesty about product origins, manufacturing methods, and business practices, making them more likely to trust a brand and purchase their product or service.
• Foster loyalty and advocacy – Brands with open communication and transparent practices are likely to build stronger, emotionally driven connections with consumers who resonate with their values, leading to brand loyalty and advocacy on the brand’s behalf.  
• Mitigate risks in crises – Transparent messaging during PR crises can demonstrate accountability and a commitment to improvement that can minimize damage and sustain your brand’s reputation. 
• Attract talent and partners – Employees, investors, and other collaborators prefer to align themselves with brands that openly and honestly share their values with genuine commitments.

With this established reputation, your potential is through the roof. A strong reputation built from transparent, authentic practices strengthens your overall relationship with consumers, allowing you to relish in the good times and navigate the tough ones. 

Challenges Embracing Transparency

The journey to transparent business practices isn’t always sunshine and rainbows, and there can be bumps in the road to finding the right balance between privacy and transparency. Being transparent is most challenging when your business is unprepared with a strategy built on unstable ground.

Some of the key challenges involved in reaching true transparency: 

• Fear of negative backlash – Transparency can, at times, be synonymous with vulnerability, and disclosing business mistakes can be a risky move that may make a brand appear weak if not implemented carefully.
• Balancing transparency with confidentiality – It may be a balancing act to determine what practices, data, or business information can be shared with the public and which should remain sealed in the internal classified folders. 
• Managing transparency across channels – You’ll need to stay consistent in your messaging across all your outreach channels, from press releases to social media.

Your ability to navigate these challenges largely depends on the foundation you’ve built. This speaks to the fact that transparency is only one piece of an overall successful brand strategy—your previous initiatives, current messaging strategies, and overall brand reputation will influence the success of your efforts toward transparency.

For example, if your brand has a reputation for delivering quality products, consistent messaging, and a high standard of doing business, then your efforts toward transparency are more likely to be well-received and demonstrate a commitment to improvement. Meanwhile, if your brand has other holes that involve inconsistency and questionable quality, your transparent messaging around mistakes may leave your customers turning their heads in the opposite direction.

Strategies for Implementing Transparency

Recognizing the value of transparency is half the battle—bringing that value to light is the other half. Being transparent is not just a passive part of a communication strategy but is a strategy in itself.  

Some of the following tactics will allow you to meaningfully exercise transparency. 

• Clear Communication – Share accurate and consistent information about products, policies, and processes through clear communication, like social media posts, website blogs, or video content.
• Be Proactive, Not Reactive – Be transparent always, not just in response to difficulty, by taking steps like publicly sharing sustainability goals or highlighting ethical business practices like fair trade sourcing.
• Encourage Feedback – Demonstrate a commitment to excellence by inviting customers and employees to share concerns and suggestions openly.
• Own Up To Mistakes – Don’t sweep issues like recalls or quality issues under the rug, and instead, be sure to quickly and publicly acknowledge errors as well as outline action plans for resolving concerns.
• Demonstrate Value – Communicate your values, mission, and ethics in your messaging and on your website while also maintaining and showcasing practices that align with them.

Mastering these strategies means building a cohesive effort—a goal of maintaining transparency should inform your messaging strategies, your content creation, your emotional marketing campaigns, and more. Using each area to reinforce each other in tandem will offer the greatest potential for your efforts and the greatest return on investment. 

Examples of Brands That Have Used Transparency to Succeed

The following brands have demonstrated excellence in implementing transparent business practices and strengthening their reputation in the process.

Patagonia

Outdoor clothing brand Patagonia has a strong commitment to environmental sustainability. The reputation is built not from the claims they make about sustainability but the information they provide to back it up. 

Exercising transparency, Patagonia crafts detailed stories about its business practices and activism. A section on Patagonia’s website highlights its focus on its “ecological footprint”, compiling stories that explain how it crafts products to a high standard of quality so that they last and prevent overproduction and excess resource consumption. It even highlights using measurable metrics through a scoring system to stand by its commitment—the brand explains that it uses website ratings, returns data, and repair information to score each product. 

This transparency resonates with consumers who also care about the environment and want to make more responsible purchasing choices to minimize their own footprint. Patagonia’s window into its mission and business practices makes it more reliable and trustworthy, providing peace of mind that a Patagonia purchase aligns with its values.

Zappos

Shoe brand Zappos is well-known for its open and honest practices, which have led to its success. Zappos stands out from other brands because not only did it implement transparent practices, but this transparency became a key component of the company’s internal culture.

Zappos created an internal monthly newsletter that shared in-depth information on operating procedures, such as spending on electricity, the site’s best-selling products, and answers to employee questions. The company also made it easy for manufacturers to find data around their specific sales margins. These methods brought better employee morale, retention, output, and manufacturer relationships, all leading to better customer service and satisfaction.

Even in times of difficulty, Zappos remained open and honest with consumers. When the company failed to fulfill orders on time due to inventory shortages or other unforeseen issues, the company didn’t cover it up or write it off with PR speak—instead, the brand was open about the root of the issues and worked quickly to address them. This commitment allowed them to develop a reputation for being trustworthy and deserving of consumer loyalty. 

Zappos’s example demonstrates the importance of establishing transparent practices internally and externally that will emanate through the rest of a business’s operating procedures. The brand’s commitment to transparency inside and out serves as an admirable example for others looking to capture the trust of their audiences.

Measuring the Impact of Transparency on Brand Reputation

Measuring the effectiveness of your commitment to transparency on your reputation is crucial for understanding how your consumers feel about your actions. The positive effects of transparency can be wide-ranging, from enhanced brand awareness to repeat purchases, so you’ll need to zoom in on the right metrics to gather a clear perspective of how your brand reputation has changed. 

Use these areas to gauge your success: 

• Customer sentiment – Capturing customer sentiment by reading reviews, monitoring social media mentions, and conducting surveys can provide tangible evidence of how your efforts are received.
• Brand loyalty metrics – Tracking repeat purchases and customer retention rates will highlight how willing customers are to stand by your brand and maintain a lasting relationship.
• Media coverage –  Analyzing how your commitments to transparency influence press coverage and public perception can give you insight into how these practices affect your reputation and the resulting benefits.

The above metrics will tell you whether you may need to adjust your messaging, storytelling practices, or campaign content to better resonate with your consumers and meet them where they are. If you don’t see the measurable successes you hoped for, then it may be time to regroup—constant progress monitoring will allow you to better refine your practices so that you are tailoring your strategies to what your consumers want to see. 

Strengthen Your Brand Reputation with Transparent Practices

Operating with transparent practices and messaging offers tremendous potential for positioning your brand as authentic and building brand trust among your target audience. Implementing transparent practices requires developing a cohesive brand strategy that intertwines conscious messaging, thoughtful content production, and clear positioning. Sometimes, effectively carrying out these strategies is all about finding the right partner. 

At PETERMAYER, we’re all about strengthening brand reputation through open and honest communication with consumers. We dig into meaningful data, market insights, and our expertise to help brands reach and captivate their target audiences. We’ve helped clients refine their messaging, strategize positioning, and craft campaigns that foster meaningful relationships. We do all of the above while turning the gears in our Brand Joy Lab to unlock your joy factor, discover ways that your brand brings joy to consumers, and solidify your reputation. 

Let’s get the ball rolling. Contact us today to chat about how we can help you tailor your brand strategy and messaging to implement transparent practices.