Transparency Is Key: How Information Reinforces Customer Patronage

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Going Above And Beyond

The amount of information available at everyone’s disposal today is unbelievable. In fact, this massive amount of information can be turned into an asset that brands can capitalize on to maximize transparency for their business surrounding the products and services they provide in order to gain their consumers’ trust.

In some countries, product transparency is mandated by law. For example, companies in the Philippines are required by The Consumer Act of the Philippines to disclose any and all information regarding their products in order to protect consumers from any hazards to health and safety and any deceptive sales acts and practices. The more information companies are able to disclose about their products―accompanied by a story or an initiative consumers can believe in―the more likely they will succeed and create an edge that will differentiate them from their competitors. 

It’s crucial to build trust with your consumers, as they continue to shop and absorb information with a hint of skepticism. In this era of distrust where fake news, data breaches and privacy concerns are prevalent, businesses continue to struggle to earn the trust—and patronage—of consumers today. 

Information is King

Companies can further build upon their transparency by staying active across different digital platforms. GoPro, the world’s most versatile camera, is an excellent example of a company that maximizes their huge following on social media. They use Facebook to promote their brand, reach new clients and connect with existing customers. They also use Instagram to showcase the quality of their camera and promote user-generated content. Additionally, they take advantage of Twitter for product announcements and customer support.

By being active and transparent on social media, GoPro is able to build a strong and loyal pool of followers that turn into customers. This kind of effort, paired with useful customer reviews and insights from other customers, can also help you gain new patrons who will become confident in your brand.

But while this level of communication and connection drives amazing experiences, it also puts added responsibilities on both parties involved. The consumers have laid down the gauntlet—they want more transparency, and they want it now. It’s time for brands to step up and provide them what they’re asking for. 

The brands that prioritize transparency in their approach towards the consumers reap great rewards such as gaining in consumer trust, increased sales, and an enhanced brand reputation. The effort a company puts in into providing accurate information is a key part in earning a consumers’ trust and building their loyalty. 

Outdoor clothing company Patagonia for example, enforced supply-chain transparency through their “Footprint Chronicles” initiative. They did this to reduce any negative social and environmental impacts the company might have. They took responsibility to make sure no harm is caused in the making of their products. Therefore, whenever a customer views an item on their website, that customer has access to a series of videos that show each step of the supply chain, including textile mills and sewing factories. If a step in the manufacturing process needs to be improved, Patagonia encourages feedback from their customers to tell them how they can improve.

Through this initiative, Patagonia is able to gain customer patronage and continuously generate sales.

Gambling with transparency

However, there have been cases where businesses falsify information just to gain positive traction and generate sales. There are always consequences when things are done the wrong way. Although this might come as a surprise, these consequences were met by German car manufacturer, Volkswagen. The automotive giant was accused of installing illegal software into their cars in order to evade the standards on diesel emissions.

It was in 2006 when Volkswagen had the desire to increase their share in the US market. However, their newly developed engine at the time could not meet the country’s stricter emission standards. At a meeting by their executives in Wolfsburg, they decided to install an illegal software to detect when an emission test was being conducted, which in turn would tell the software to ramp up the car’s pollution controls. Volkswagen would then proceed with their “clean diesel” campaign, putting forth some of their more popular models like the Golf, Jetta and Beetle to rival the segment-leading Toyota Prius. In addition to cheating emissions tests, the company continued to use the software in order to reduce the amount of maintenance their cars required.

The fallout began in 2013 when a team from West Virginia University discovered that two Volkswagen cars in their study produced a much higher amount of poisonous nitrogen oxides than was allowed. This led to an inquiry from the California Air Resources Board (CARB) as well. Volkswagen tried covering up the “cheating” software by giving falsified information and data to the regulators. They also later admitted that they destroyed thousands of potentially incriminating documents surrounding the software. The public learned of the whole ordeal when the Environmental Protection Agency (EPA) handed Volkswagen a formal notice for their valuation. This issue resulted in their stock price and net income to decrease drastically. The CEO at the time, Martin Winterkorn, agreed to pay a total of USD$21 Billion from three different settlements.

Transparent brand always win

The people have spoken, and they are more than willing to reward and champion brands who make a concerted effort towards transparency. Businesses today can either ignore the call temporarily and risk failing to adapt to the standards today, or seize the opportunity to get ahead of what is expected of them.

Companies can build value and stronger relationships with their consumers any time they prioritize genuine interactions wherever they may happen. In forging these lasting connections, brands are required to be dedicated to continuous evolution and improvement that is influenced heavily by listening to their audience. The capacity to be transparent should not only be viewed as a sales or marketing tactic, or even a mere shift in communication strategies. It demands every level of an organization to modify how they engage consumers, how they are perceived by them, and how they choose to behave in a world that’s perpetually changing.

Visual by: Rissa Kei Chua

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