6 Tips for Transparency in Business

All dog kibble looks relatively the same. How do you convince consumers to trust its nutritional integrity? It comes down to transparency.

Just listing the ingredients won’t do. To grow trust , dog food brands that claim to be high-quality should give consumers easy access to information about production, ingredient sources, food safety procedures and more.

The same concept applies to all other businesses. You want people to buy your product over your competitor’s? Why should consumers invest in you instead? Like pet food ingredients, listing features won’t cut it.

Transparency about your practices, mission, ethics and culture is the key, but what does transparency even mean in a business context?

What is business transparency?

The definition of business transparency is the open sharing of information from a business to its consumers. It creates brand trust, good communication and perceived good citizenship. Internally, it is needed for collaboration, cooperation and collective decision making.

A study published in the Journal of Business Ethics tested the consumer/corporation relationship between transparency, social responsibility, trust, general attitude and purchase intent.

Researchers concluded that a corporation’s transparency and social responsibility positively affects consumers’ general attitude and trust toward the corporation. Competence and integrity are identified as vital components of this trust. For example, customers had more trust in a company that clearly communicated their sweatshop issues and labor conditions.

A study on operational transparency supports these results. Customers are more satisfied and less impatient about their wait time when they can see and understand the process behind fulfilling their request.

When people see the work going on behind the scenes, they value the service more.

Ryan Buell

Transparency has an effect on the performance of your team and your customers’ impression of your company. In a time of automation, it also leads to more appreciation of your products or services.

How to be transparent with your words and actions

Transparency is important to business ethics, but it’s also not realistic to adopt in every facet of your business. First, customers care about what affects them, and this varies. One customer may be concerned about where the meat in your hotdog weiners comes from, another customer may just appreciate your low prices.

Second, a company’s practices may not be completely worth sharing. The customer who wants a cheap product may not be interested in the manufacturing details. Knowing what “goes on behind the scenes” could call the customer’s own personal ethics into question.

Full transparency about every part of your business isn’t necessary. However, there are habits your company can adopt to focus your transparency efforts on what matters most to your valued consumers.

Own up to mistakes

Pride and secrecy are two of the biggest company vices holding it back from transparency. Admitting mistakes, applicable to even your personal life, is the trustworthy and responsible thing to do.

It also sets a good example for agents. Customer complaints can lead to agents being defensive on behalf of the company. It’s up to management to get agents on board with being transparent about company policies.

When owning and admitting mistakes, use clear language and an empathetic tone toward the customer. Former Samsung President and COO Tim Baxter demonstrates this in his formal apology for the Note7 recall:

Baxter addresses customers immediately, apologizes without any defensiveness and gives a clear explanation of what will happen next.

It is a simple, human way to make your company more relatable and socially responsible.

Keep information updated and avoid inconsistencies

According to the United States Light E-commerce Report, 88% of Americans regularly or occasionally research products online before buying. If a customer incurs hidden fees and hears a return policy from your agent that is way different than what’s on your FAQ page, trust dwindles.

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Keep your website copy up-to-date and your pricing consistent so there are no surprises at checkout. Fill agents in on new changes as they’re made, and communicate the changes that directly affect your customers to help manage their expectations .

Try the “because” justification

Imagine asking for a refund on an item that arrives in pieces and hearing from a service rep, “No, that’s not possible. Sorry.” and nothing more, no matter how much you pry. How unsatisfactory. What nerve!

In customer service, clarity helps. If you have to give bad news, use the “because” justification. For customers, the reason why isn’t important, but your honesty is.

Avoid weak excuses and share the reason upfront. You can learn more about the “because” justification in the video below:

Communicate during wait times

Uncertain wait times can make a customer feel powerless. When automation is involved, customers also miss out on the operational process behind their request.

Show or tell customers what’s happening during queuing times to soften the wait. For example, the airline Eurowings lets callers know how long their wait will be and updates the time throughout the call.

DHL updates the status of a shipment at every checkpoint. With a tracking code, customers can see when their package is picked up, processed and loaded onto the delivery truck.

screenshot of detailed tracking history

For online businesses, create a status page or use your company social media accounts to inform customers of technical issues, scheduled updates, website downtimes, etc.

Encourage feedback from customers and employees

Feedback, whether positive or negative, is fuel for growth. Frankly though, some companies still have issues accepting negative feedback and even fight it.

If your customers and employees are speaking up about issues or praising your service, the transparent approach is to listen and respond.

It’s important to acknowledge that not all customers leave feedback in good faith, and often they aren’t even customers at all. Competitors, trolls and bots may try to skew your online reviews.

Feedback from verified customers, however, can be incredibly valuable. There may be aspects of your product or service you were unaware could be improved, such as the user experience or features.

Not all ideas are diamonds, but make sure your service team is involved in product management and can move ideas forward. Keep a suggestion box open and regularly check for changes worth implementing.

Encourage employees to share their honest opinions about the company, its ethics and the working atmosphere to foster a culture of transparency. You may not like all the answers you receive, but like negative reviews, it’ll highlight what needs to be improved. Agents may then feel more comfortable with collecting and sharing personal and customer feedback if it sparks meaningful results.

Keep a healthy level of internal privacy

Transparency may make customers feel more favorably toward your business, but if it’s too far ingrained in your culture, employees may feel vulnerable and exposed.

If there’s a spotlight on their work process, employees may resort to distortions of fact or feel insecure in the workplace. Moreso, being personally transparent with a manager isn’t easy to do if you don’t have a good relationship. Worse, it may turn healthy relationships into toxic ones.

Try to find a “sweet spot” between transparency and privacy. For example:

Publicly communicate company efforts instead of individual team efforts. Customers care about the news that affects them, but not necessarily the person that helped make it possible. Unless they’re a consenting individual, leave employees out of mass communication.

Encourage feedback on existing processes and adopt changes that maximize results. You likely have guides on how to perform every job at your company, but employees may still develop their own workflow. If the output is good and there are few mistakes, encourage these individuals to share and suggest their improvements to your process.

Allow for experimentation and failures - and communicate when a failure affects customers. Whether you’re trying out your new chatbot or updating your website, there’s likely to be hiccups. Positive changes are good for the company, so they should be encouraged, but ask your dedicated users for their opinion before making these changes. This is something we do at Userlike , which has helped us make changes customers actually want.

Publicly discuss issues or critical questions raised by the team. Many businesses use apps like Slack to celebrate achievements across the company. However, mistakes, technical woes and critical comments are sometimes moved to private conversations. Encourage employees who are made aware of an error they’re responsible for to respond to criticisms publicly.

For this to become a habit, errors need to be viewed and discussed as an opportunity to learn and improve.

Openly discussing feedback while respecting individual privacy may lead to better work performance and external communication. Employees will feel more empowered and form better, long-lasting relationships with customers. In return, customers will appreciate their honesty and empathy and trust the company more.