BRAND TRANSPARENCY: What It Means, How It Works & Why It Matters

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As the digital age progresses and millennials take over the marketplace, the average consumer is becoming ever more impervious to the smoke and mirrors of traditional marketing tactics and far more critical of the brands they choose to endorse. As such, most have had to re-work their marketing strategies to find ways of appealing to and connecting with these hyper-aware consumers on a more genuine level. While not a new concept by any means, one strategy that is gradually becoming the golden standard in marketing and advertising is that of brand transparency. 

In this article, we’ll break down exactly what brand transparency is, what it entails and why it is something that all brands and businesses should strive for.

What  is Brand Transparency?

Brand transparency is all about earning trust from consumers. Being transparent means being open, honest and genuine with consumers, owning who you are as a brand and standing behind everything you do as a company, from products and practices to management and marketing. It means being up front, answering questions, addressing concerns and treating people like people as opposed to business transactions. It’s about taking pride not only in what you do but how you do it. 

Not to be too on-the-nose metaphorically, but think of it like a brand functioning as if it were run out of a giant glass house. By allowing people to see everything you do for themselves, you assure them you have nothing to hide. Whether they decide to look or not, you instill trust in your brand by going out of your way to be open and honest. This trust extends to the products and/or services you provide when it becomes clear that you stand behind every single aspect of what goes into them. 

There is a lot more that goes into brand transparency, but the bottom line is that people want to be able to trust the companies they give their business to, and they want to be able to stand behind the brands they endorse in the process. 

Transparency vs. Truth

In marketing and advertising, there is a definite distinction to be made between truth and transparency. While related, these two terms refer to separate ideas and practices, so it’s important that they not be conflated when talking about them in this context. 

The main difference is that brand transparency is more of an optional approach while truth in advertising is a legal requirement. Truth in advertising refers to federally mandated laws that require any and all claims made in advertisements and marketing materials to be factual so as to not mislead consumers. These laws are enforced by the Federal Trade Commission (FTC) in order to protect the general public from fraudulent business practices, especially when it comes to health, finance and technology. We won’t get into the specifics of these various laws here, but the main gist is that businesses and brands can’t flat-out lie to their customers.

 In terms of honesty in branding practices, truth means doing the bare minimum and transparency means going above and beyond. All companies are required by law to exhibit truth in advertising, but they can easily do this without being transparent. Furthermore, there are certain legal loopholes – hyperbole, careful wording, fine print, etc. – that companies can exploit in order to effectively get around truth-in-advertising without technically breaking any laws. 

How Can Brands Be Transparent?

There are a lot of different things that brands can do to be more transparent, and it’s not an all-or-nothing type deal by any means.  Certain types of transparency will make more sense for certain business models. What you do will determine what your customers want to know, which will determine where and how you can be more transparent.

With tangible goods like food and clothes, for instance, consumers want to know what ingredients/materials were used, where they come from and how they were made. In finance, they want numbers, information on exactly what will happen to their money, guarantees on returns and the safety of their investments, any hidden fees, penalties or losses they may incur, etc.. If you’re in a service industry like HVAC or auto repair, your customers will value transparency when it comes to your processes and pricing models – they want to know why a repair is needed, what you have to do to make the repair, how you arrived at the final cost and so on.

Transparency doesn’t mean revealing every single detail of your business down to the data. Regardless of the business type, there is certain information you should obviously never make publicly available, whether for privacy and security reasons, or to prevent your competitors from using it against you. Coca Cola and KFC would never publish their secret recipes because their brands’ products would no longer be such commodities. These companies can, however, be transparent about certain ingredients, the quality of those ingredients and the nutritional value of their products. 

These are just a few different examples, but the point is to determine where transparency could do the most to benefit your customers and in turn your company.  

Transparency & Imperfection

No company is objectively perfect in all that it does, and consumers are well aware of that. And while transparency doesn’t require it, a little humility can go a long way. Within reason, being transparent about your imperfections can actually strengthen consumer trust by humanizing your brand. This strategy is extremely effective for companies that are facing real problems with their brand perception and overall public image. Admitting that you have room to improve shows honesty, humanity, humility, integrity, growth and willingness to change – all of which consumers value in the brands they associate with. 

If the issue you address is internal, as in occurring solely within your brand or company, it needs to be something that is easily understandable and forgivable from a consumer’s perspective. Obviously, you should never jeopardize your brand by trashing it, highlighting its weakest aspects or painting it in an irredeemably negative light. Rather, the point is to identify something that could be improved, own up to it and let consumers know that you’re actively fixing it and you will be better because of it. 

If the issue/s you identify are occurring in a larger context (ie. questionable industry norms, outdated ideologies, standard business practices, etc.), you will have much more leeway in terms of distancing yourself from the issue moving forward. Even if you were a part of the problem up until that point, consumers will place less blame on your brand if they know it’s not the sole source of said problem. They’ll also give you more credit for going against the grain and breaking with the norm for their benefit. 

If you wish to be transparent about issues that you don’t have the power to change, you can still change the way people perceive these issues by offering genuine explanations. A fine dining restaurant may be forced to charge higher prices than local competitors, but they can be transparent about why that is and where the extra money goes. They can be honest in explaining that their prices are higher because their standards are higher, because they want to offer the very best dining experience possible. Consumers are more willing to accept these kinds of trade-offs when businesses are up front and honest about them. 

Regardless of the type of business, any issue that you decide to come forward with needs to be followed by enough positives to override the negative. In some cases clever marketing can turn negatives into positives via forced perspective. Whatever you do, make sure you’re giving consumers an overall positive impression of your brand. 

Why It Matters Now More Than Ever

While not directly enforced in a legal capacity like truth-in-advertising laws, brand transparency is enforced by the court of public opinion, which wields more than enough power to make or break any brand. The Internet and social media have enabled consumers to hold brands accountable like never before.

From faulty packaging to questionable practices, anybody can now go public with anything they deem negative. The bigger the entity, the more liable they are and the better chance there is that any negative press will go viral. Every individual consumer now has the potential to bring down entire corporations. Couple this new power dynamic with the fact that all businesses now operate under a state of constant hyper-surveillance thanks to cellphone cameras and CCTV. Add it all up and the idea of operating out of a giant glass house hits a little closer to home. 

The reality is that technology is making transparency less and less optional. However, the increased likelihood of forced transparency only makes the need for voluntary transparency all the more urgent. If the latter can make you, the former can break you. Forced transparency is like telling the truth after you’ve already been caught in a lie – it doesn’t really count. The best way to prevent this is to stay ahead of the curve by being transparent in the first place and consistently maintaining your standards as a brand. 

Conclusion

Overall, brand transparency is a good thing for everyone involved, and business owners should embrace it for the better. There’s a reason more and more brands are adopting this strategy, and that’s because it works. When done right, it can attract more customers, improve public perception, prevent certain issues and give you an edge over competitors. So if you stand behind your brand and take pride in everything you do, transparency is a no brainer. 

Thanks!

That’s all for this week’s article! In our next piece, we’ll go over some famous examples of brand transparency and how they worked. Let us know if you have any questions or additional info in the comments below. Thanks so much for reading and be sure to keep an eye out for more content coming soon! 

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