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In the age of the empowered customer, transparency is an essential attribute of any robust brand. In fact, without transparency, you're not a brand. You're a commodity.

That's a bold statement. But here are four reasons why:

1. Transparency creates the grounds for trust.
Trust makes a relationship possible.
3. Only with a strong positive relationship can you build loyalty.
4. Without loyalty, your product is a commodity and open to substitution.

Transparency means being open and honest about what your brand is and does - for better and for worse. It also involves being proactive about sharing information and not just confessing when caught in the wrong.

If you think about if from an individual level, the people you build the most effective relationships with - either professionally or personally - are people that you think are forthcoming and transparent. Those are the people you trust.

This need for transparency is not new. It's been with us forever. But what is changing dramatically is people's access to information. In today's connected world, it's no longer possible to leave a gap between what a brand says and what the brand does. Access to information is growing at an exponential rate and consumers are realizing the power they have. Businesses face a choice: either fight this need for transparency or embrace it.

"If a brand is proud about something, they'll make sure we know about it; if they're doing something they believe we won't appreciate they'll keep us guessing," says fashion designer Bruno Pieters of Honest By. "But actually, it is their silence that is already the answer we need in order to make a decision. This is where the danger lies for all companies that aren't transparent."

Transparency brings with it numerous benefits for the entire business. Research has shown that firms that are more transparent have higher valuations, because investors trust them more. And it has profound effects on employee productivity and retention too. A study of over 40,000 workers found that ratings of managerial transparency have a correlation of .94 with employee engagement. So transparency isn't just good ethics - it's good business.

Here's 5 ways to increase your transparency and set the stage for greater brand loyalty:

  1. Find out where your relationship is at by measuring how transparent your customers think you really are. Identify any questions or concerns they might have. And learn where you might benefit from being more forthcoming. It's an important step toward strengthening your relationship.

  2. Overshare. Make everything accessible. Be transparent about being transparent. Outdoor clothing company Patagonia has a section on its website called "The Footprint Chronicles." Its whole purpose is to publicly expose "Patagonia's life and habits as a company. The goal is to use transparency about our supply chain to help us reduce our adverse social and environmental impacts - and on an industrial scale."

  3. Be honest. Show your vulnerability. No one is perfect. But brands often pretend they are, and that doesn't inspire trust or admiration. It just evokes suspicion. Patagonia's Footprint Chronicles does not claim everything they do is ideal. They readily admit there are things they are working to improve. That's the kind of transparency that inspires trust and strengthens relationships.

  4. If you're using people's data, clearly tell them. Having twenty page long terms and conditions written in lawyerly language is not being transparent. Review all your information for clients and make sure your communications make your activities and positions clear. Take a page from the South African government where they have enshrined in law the "right to information in plain and understandable language." Make clarity a priority. Steven Althaus, head of brand management and marketing services at BMW, thinks it is the way of the future. "Marketing will no longer be the department that puts lipstick on the gorilla," he said. "It needs to be about truth well told."

  5. Actively solicit feedback from your customers and prospects and ask for permission to use their information to better serve them. Our research has shown that people are very upset about information from their online activities being used to target or monitor them, when they have not explicitly given permission. But our research also found that they love being asked for their opinions. Nine in ten agreed that "I feel like I am doing my part as a good consumer and citizen when I provide feedback" and that "I feel like I am being a trusted advisor when I provide feedback to a company on their products." Those are the kinds of relationships that all brands want to build. Being transparent and open is a perfect first step to building them.

If you're interested in using transparency to strength your brand or company's relationship with customers and prospects, download our short whitepaper "Communities of Consent" and learn more.

"In a time of universal deceit, telling the truth is a revolutionary act."
- George Orwell

Why you need to embrace new customer-centric strategies

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