If you want loyal consumers, you need to build a transparent brand.
That's the takeaway from a comprehensive consumer study completed by Label Insight, a company that specializes in product data out of the US. The Label Insight Transparency ROI Study targeted more than 2,000 consumers about the impact transparency has on their trust in and loyalty to brands.
While the study focused on brands in the food industry, its key discoveries are relevant to any company that wishes to generate lifelong customers. Here are the five most relevant lessons about brand transparency the study can teach you.
1. Consumers want to know everything about a product
No longer can you slap a label on a product and expect it to fly off the shelves. Consumers want to know more than what's in your products. They want detailed insights regarding where you sourced your materials, how the product was made, what values guided the production process, and any other information you can provide.
Consumers seek out this information in order to determine whether a company is trustworthy and 56 percent of those surveyed said that additional product information inspires more trust in a given brand. While investing in ethical systems and materials may require more costs upfront, it can have a massive payoff. According to the study, 73 percent of consumers say they're willing to pay more for a product that promises total transparency. Meanwhile, 39 percent said they would switch to a new brand in the pursuit of product transparency.
2. Consumers want to know more about your brand
In recent years, the internet and social media have allowed brands to develop personalities, value systems, and relationships with other brands and consumers in ways never before seen. Consequently, this makes consumers more curious and they now expect to know more about the companies and brands they are purchasing products from.
In addition to being totally transparent about products, companies are increasingly expected to be transparent about their overarching value systems and the way they do business. Any information fed to customers about a brand should also be completely authentic to avoid any bad press in the future.
In exchange for authentic brand information, consumers are more likely to place their trust in a company and its products. The study found that almost 94 percent of all consumers are more likely to be loyal to a brand when it commits to full transparency in this way.
3. If your brand isn't transparent, consumers will hunt for information elsewhere
If a company fails to provide consumers with all the information they desire about a product or brand it can backfire. Consumers will take matters into their own hands and hunt down information if companies aren’t so forthcoming with it.
As the study points out, this means that brands can easily lose control of the available information on their products as consumers turn to third-party sources to determine how products were made. Thus, by being completely transparent brands can retain control of their image and shape the narrative about their products.
4. Millennial mums are leading the consumer charge for transparent branding
The study found that mothers aged 18 to 34 emphasise brand transparency more than any other consumer demographic. They're also the most willing to seek out product information online and pay more for products that are produced with transparency. A whopping 86 percent of millennial mums reported that they would pay more for a product with full transparency.
Given that this demographic represents upwards of $200 billion in spending power, it's important to keep their preferences in mind when feeding information to consumers.
5. Brand transparency can produce lifelong consumers
These days, there's an unprecedented number of brands competing for consumer attention. Determining which products are actually worth buying can be a daunting task. So when consumers find a brand they feel they can trust, they're more likely to stick with that brand long term.
And what's the best way to build consumer trust? Brand transparency. In fact, 56 percent of those surveyed said they would be loyal to a company for life if it provided complete transparency. Additionally, 81 percent said they would be willing to sample a brand's entire range of products if they were comfortable with its degree of transparency.
Brand transparency isn't just a nice thing to strive for. These days, it's a business imperative. As trust in businesses falls to new lows, brands can differentiate themselves by committing to being open and honest with their customers. In so doing, they can build a community of dedicated consumers who will commit to their brand for a lifetime.
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