Why Your Business Can’t Afford to Keep Secrets - Hope 103.2

Why Your Business Can’t Afford to Keep Secrets

Times have changed. Consumers today expect openness, and brands that hold onto secrecy do not remain unscrutinised for long.

By Michael McQueenWednesday 1 Jun 2022LifestyleReading Time: 5 minutes

A few years ago, I was running a strategy workshop with the leadership team of a global medical device firm. As we explored the disruptions impacting their business, one came up that I hadn’t previously considered.

Someone shared that while increased competition and demographic changes were having a significant impact, a new trend proving enormously disruptive to their business was how increasingly aware their customers were of price variations across different markets.

“In the past,” he said, “a customer in Spain was unlikely or unable to compare the price they were paying for a medical device with that of a patient in New Zealand. That’s all changed now. Our customers do compare and it is doing significant damage to our brand’s perceived trustworthiness.”

This challenge is far from unique. Across the board, consumers are demanding more and more information regarding the products they use on a daily basis.

In response to a 2018 report that warned synthetic chemicals in perfumes could be disrupting the endocrine system of wearers, consumers mobilized in a big way demanding information and certainty. Reacting swiftly to this consumer-led pressure, global giants such as Unilever, Proctor & Gamble and Johnson & Johnson began disclosing fragrance ingredients in products like shampoo and cosmetics. Such a move would have been unimaginable just a few years ago.

The push for transparency

The expectation of transparency characterises consumers in the current age.

It is no longer just price comparability or product safety that counts. Consumers today expect and demand openness at every point of interaction with a brand. The brands that hold onto secrecy do not remain unscrutinised for long and customers are increasingly willing to challenge companies to tell the truth.

Working with a large tyre retailer a couple of years ago, this theme emerged yet again. One operator lamented how much things had changed in recent years. “It used to be the case that a customer would walk into one of our stores and ask what the price of new tyres for their vehicle would be. Our store person, standing on the other side of the counter, would enter the customer’s car make and model into computer software and generate a price. And that was that.”

“However, this doesn’t work anymore,” he said.

“Customers began wanting to come around to the back of the counter and see exactly what we’d entered into the system and how we arrived at the price – just to make sure we weren’t adding anything additional or overcharging them.

“As a result, we’ve moved away from the traditional counter arrangement entirely and now do up quotes on touch-screen televisions mounted to the wall of the waiting area, in full view of the customer.”

Office building
Photo by Patrick Tomasso on Unsplash

Can we trust institutions?

Examining why building trust in the age of transparency is so challenging, Who Can You Trust? author Rachel Botsman suggests that the very notion of putting our faith in institutions – and those at their helm – has become increasingly untenable in the 21st century:

“Institutional trust, taken on faith, kept in the hands of a privileged minority and operating behind closed doors, simply wasn’t designed for the digital age… To hide, well, anything really, is a high-stakes gamble. It doesn’t work in a world where PR puffery can no longer cover up dirty secrets or closed-door antics.”

“Suppression, secrecy and subterfuge simply no longer work.”

While many of us have our own privacy concerns regarding data in the digital world, it is this very lack of privacy that is forcing businesses to operate transparently with their customers.

As Botsman observes, the realities of this age of transparency mean that the rules of the past no longer apply. Suppression, secrecy and subterfuge simply no longer work.

An opportunity for businesses willing to adapt

This expectation of transparency opens up new opportunities to build trust and loyalty in customers for those businesses willing to embrace openness. It is clear that while consumers are willing to hold secretive businesses accountable, they are also willing to generously support those businesses that do operate honestly.

Back in 2017, eight professors from various American Universities joined forces to examine just how powerful disclosure and transparency were in building trust in institutions. The professors selected a sample group of college students and sent regular updates to them about a government agency the students knew very little about – the Nebraska State Water Regulator.

Every three months for a year and a half, these students received details on practices, innovations and news about the regulator. Interestingly, at the end of 18 months, the sample group’s trust in water agencies jumped significantly compared to a control group who had not received the updates. Reflecting on the lessons from this research, award-winning business writer Shane Snow suggests: “The more we learn about what’s really going on inside an organisation, the more favorably we judge it.”

May Miller-Dawkins of the Open Government Partnership suggests that building trust with today’s consumers must go beyond providing quality and consistent goods and services. According to Miller-Dawkins, what’s required today is radical transparency around how a company does what they do and what contribution they are making to society.

Companies are working to earn trust

While operating with values and a sense of social responsibly is innately important, credibility in the eyes of today’s customer is only achieved when these things are clearly evident and verifiable.

Brands like Konica Minolta, Patagonia, Nike and Levi Strauss have worked hard to earn the trust of customers by being transparent around their supply chain practices. Others such as BHP Billiton, Repsol, LUSH and Vodafone have openly disclosed their corporate tax policies, practices and payments. Then there are businesses like Salesforce, Buffer and PepsiCo that have made public commitments about achieving pay equity.

Much of building trust with consumers can be as simple as keeping them in the loop with business strategies, practices and decisions.

Customers want to know who runs the companies they are buying from, what those companies stand for and how they operate.

Allowing customers insights into the behind-the-scenes of your business promotes the kind of trust that will maintain loyalty and respect from the market.

Businesses that refrain from telling the truth or operating with openness will soon find themselves on the path to irrelevance.


 

Article supplied with thanks to Michael McQueen.

About the Author: Michael is a trends forecaster, business strategist and award-winning conference speaker.

Feature image: Photo by Benjamin Child on Unsplash