Transparency is now more important to consumers than brand appeal when it comes to buying products or dealing with a business or organization, according to new research released by Cohn & Wolfe. The research, which looks at the role of transparency in communications and business, also found that transparency trumps both recommendations online and from friends.
Defined in business terms as the willingness of a company or organization to share information openly and ethically with its stakeholders, the research found that transparency has increased in importance in the wake of recent high-profile scandals—including the News of the World phone-hacking investigation, the outrage around MPs expenses and the banking crisis.
Nearly seven in 10 (68 percent) of consumers surveyed said that transparency had become a more significant factor since these issues occurred.
The research also reveals those measures deemed by consumers to be most important when it comes to judging if a business or brand is operating transparently. Being open and honest about the sourcing of raw materials and ingredients is seen as most critical, with 38 percent of people citing this as significant.
Revealing a distinct lack of trust in the openness and transparency of large organizations, more than half of respondents (52 percent) agreed that big businesses “divulge only what they need to for regulatory purposes.” Going even further, more than one in ten (12 percent) of respondents believe that big businesses deliberately avoid transparency in order to make money.
According to Scott Wilson, Cohn & Wolfe UK CEO: “Given the troubling events of recent months, businesses and brands are facing a period of unparalleled and intensive scrutiny. At the same time, however, consumers have been emboldened by the opportunities offered to them by the Internet and social media and increasingly expect companies and brand owners to be open, responsive and transparent as a pre-condition of doing business or making a purchase.
“What this research is showing is that the demand for openness goes way beyond the age-old totems of trust and reputation. In today’s world of social commerce and customer relationship management, transparency is now becoming a powerful business tool and this presents both opportunities, but also significant dangers for some of our largest businesses.”
The research, conducted by ICM, also examined how the growth of social media is shaping the future of communications and transparency. Over a fifth of consumers (21 percent) expect businesses to respond to complaints left via social networking sites within 1-4 hours. Moreover, nearly half (47 percent) of 18-24 year olds said that by 2020 they expect all CEOs and senior business leaders will be visible and accessible to consumers on social media 24 hours a day, 7 days a week.
Ioannis Ioannou, Assistant Professor of Strategy and Entrepreneurship at London Business School says: “The findings of the survey indicate how critical it is for corporations to engage with a key stakeholder and their consumers, in an authentic, ethical and transparent way. To go beyond what simply the law mandates, and to effectively communicate what is material and why, within the industry in which they operate and as it relates to their product or service.”