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5 Reasons Brand Transparency Fuels Customer Loyalty
As the customers brand relationship evolves to fit into 21st Century living, it’s becoming more and more clear that transparency is key to cultivating that accord. In fact, 94% of consumers are more likely to remain loyal to a brand that offers transparency more than those brands that choose to remain closed off, according to a 2016 product data study by Label Insight. It’s vital for brands to be open with their customers, and here are five major ways brand transparency fuels that customer loyalty:
1. It Builds Trust
Like any relationship — be it professional, or personal — honesty is the foundation to making it last. When it comes to brands, that means being transparent with customers in all facets of the way they access that brand. Transparency is all about accessibility, and that leaves customers not only trusting the brand but also keeps them coming back. In fact, according to one study on brand transparency, 73% or customers say they would actually pay more for a product from a brand that offers transparency via all their avenues. That’s nearly three out of four customers.
2. It Cultivates Word of Mouth
When a brand fails to consistently satisfy customers, or has poor customer service, or puts out an inferior product, word gets out quickly through social media, texts, emails and conversations. And that could mean years of having to rebuild a reputation. Likewise, when a brand shows transparency, it tends to create a vibe that goes viral. That brand earns a reputation for being open and word spreads like wildfire. When Domino’s Pizza began an ad campaign in 2011 that was almost embarrassingly transparent, that honesty worked. The ads all but admitted that their pizzas tasted terrible, and a promise was made that things would change. The campaign worked, and the pizza maker reported a 33% jump in net profit in their third quarter of that year.
3. It Opens Better Communication
Social platforms are not only the best place to communicate with customers and promote products, but it’s also the best place for a brand to show transparency. For example, Twitter is the most common place a customer will go to complain about a brand’s failure to satisfy. This is where a brand can communicate directly with customers by opening up a conversation, be apologetic, and express a way to make amends. No brand is perfect, and customers know this. But the brand that owns up to their mistakes and directly communicates with the customer to fix said mistakes will cultivate trust and build a reputation as a brand that goes the extra mile to satisfy their customers’ needs.
4. It Clears The Air
Sometimes, a company will work hard to fix a former wrong. And coming out and being transparent about it fuels customer loyalty. For example, in 2015, bakery chain Panera not only admitted that it had used artificial ingredients in their products but came out and publicly promised that it would stop doing so by the end of 2016. This gave birth to a campaign that included a “transparency menu” that not only listed calories and nutritional facts, but a detailed description of ingredients used in each item served. The company even went so far as to give their customers’ an animal welfare report. The result was the company earning a reputation for serving clean food from cage-free animals. The company’s “Food As It Should Be” campaign not only made promises, it kept customer’s updated on its progress via Twitter, YouTube, and other social media outlets.
5. Customers Are Attracted to Authenticity
Thanks to social media and smartphones, customers are as savvier as ever when it comes to spotting a brand that is genuinely transparent and spotting one that is merely forcing it. Being authentic and real is an attractive and rare commodity. As listed above, companies like Domino’s and Panera have seen the fruits of being authentic and open with customers, even when it was painful and embarrassing. But transparency isn’t just about admitting to mistakes. Transparency also means being authentic. Southwest Airlines, for example, is adept at being authentic with its campaigns. The airline prides itself on offering low fares and is very good at keeping customers in the know on prices through hashtags and their “Transfarency” campaign. This approach to being authentic to customers has paid off and has earned Southwest a reputation as the go-to airline for affordable flights.