If you have experience running a business of any kind, you would know how critical it is to practice transparency in business operations and procedures. In this article, we will discuss the importance of transparency in business. Learning about this will help you ensure you deal with your business partners, clients, employees, and other stakeholders on a fair basis.
What is Transparency in Business?
Having transparency in business means openly sharing information about your business with your customers. It helps develop trust for your brand within your target market and builds healthy communication patterns between you and your customers. It enhances the cooperation and engagement of your potential customers with your brand.
A study posted in the Journal of Business Ethics showed that transparency in business positively impacts consumers’ trust, purchase intent, and general attitude towards a brand. When your customers trust you, they see your brand as having competency and integrity. This means they will prefer buying from you over your competitors. When your consumers can see and understand how you operate to fulfill their needs and requests, they feel more satisfied and less impatient about your products and services.
Transparency in business also has a positive impact on the performance of your employees. Suppose you automate your processes but make everything transparent to your staff and customers. In that case, you will appreciate your output and products.
4 Tips for Transparency in Business
Transparency in business is important for maintaining business ethics. However, you can't be transparent in every single facet or aspect of your business. Your customers will definitely care about the things that affect them, which can vary. For example, one customer may be more concerned about where you get the meat from than you put in their hotdog, while another customer may just appreciate your reasonable price for the hotdog.
The practices of your company may or may not be entirely worth sharing. For instance, the customer who prefers buying cheap products may not be concerned about the manufacturing details. Knowing your customers’ primary concerns will help maintain a feasible level of transparency in business.
This means 100% transparency in every aspect of a business is unnecessary. There are just certain habits that you can adapt to focus your efforts towards providing a reasonable amount of transparency in business. This means you need to tackle those areas first that matter the most to your valued and happy customers.
Here are 4 tips for transparency in business.
1. Own Up to Your Mistakes
Secrecy and pride could become your two biggest vices against your customers. Suppose you admit to your mistakes in front of your customers. In that case, your audience will see you as a trustworthy brand. Owning up to your mistakes shows that you practice transparency in business, sets you apart from your competitors, and make you a good example for other agents. The way to properly own up to your mistakes is by using clear and emphatic language while speaking to your customers. Successful businesses use empathy marketing to promote their products and services.
2. Avoid Inconsistencies
If you have inconsistencies in your business procedures, your customers will end up confused and lose trust in your brand, even if you practice transparency in business. For example, if your customers incur hidden costs in the purchases they make from your website or store, they might not trust your product prices in the future. Another example of inconsistency could be one customer hearing a return policy about your brand from an agent that’s very different from what they read on your brand website.
3. Communicate During Waiting Time Periods
Maintaining communication with your customers when they have made the payment and are waiting to receive the product or service is a good way of practicing transparency in business. Uncertain and lengthy waiting times can make your customers feel powerless and frustrated. If the process is automated, your customers do not even know the operational steps for you to fulfill their requests. Therefore, it is best to tell your customers what’s happening when waiting to receive what they paid for. For example, mail delivery services can provide updates on the shipment status at every checkpoint. These updates can be given on the company’s website and traced through the shipment’s tracking code or sent via email to the customer’s email address.
4. Encourage Customer Feedback
If you really want to know what kind of transparency in business your customers would like to see, the simplest way is to ask them about it. Customer feedback can serve as fuel for your business growth. Suppose your customers are speaking about too many issues in your procedures. In that case, consider opening up more to them about why your processes are designed the way they are.
4 Benefits of Transparency in Business
Reading about these 4 benefits of transparency in business will convince you how important it is to be transparent, ethical, empathic and cooperate towards your stakeholders.
1. Transparency in Business Establishes Trust
As mentioned above, getting the trust of your audience is the biggest among the benefits of transparency in business. By being open about your policies and processes, you build trust among your customers and among your employees. When your staff knows what they are doing and how their job contributes to the overall organizational goals, they pride their work. They feel proud to be working for a company with high ethical standards. If employees feel that their boss is not upfront with them, they will not value the company’s vision. They will only be interested in completing their own job scope and remain detached from the organization's objectives as a whole. Discussing your procedures and making things clearer will open up their hearts towards the overall business growth.
Maintaining transparency in business helps you build and maintain healthy client relationships. This means you increase the chances that your existing clients will renew and extend their contracts with you. They are also more likely to recommend your company or brand to others in their network. This can help you grow your business with minimum marketing efforts. Being transparent about work processes also creates good relationships among the employees working in your organization. If you build an open and transparent corporate culture, your staff will feel more comfortable sharing ideas without fearing being judged or reprimanded.
3. Transparency in Business Enhances Productivity
Most employees would agree that if their boss is more open with them about their vision and mission, they would want to perform better at their jobs. Having the right information helps people feel motivated to succeed in their jobs. If you lack transparency in business, your employees will feel a lack of commitment to work at their best potential. You can start applying tips for transparency in business by conducting training programs that can help align the values and goals of your staff with those of your organization.
4. Transparency in Business Strengthens Innovation
Companies that understand the importance of transparency in business usually drive more innovation and get more opportunities for growth and expansion. The difference between successful companies like Amazon and others is that the successful ones can come up with ideas to disrupt the marketplace faster. This is because their leaders are transparent about their goals, values, mission, and objectives. Once they implement a strategy, they are again transparent about how it will work and benefit society. Companies that follow the tips for transparency in business can also drive more social innovation within the community.
Sometimes, in order to reap the benefits of transparency in business, you need to come out of your comfort zone and develop new strategies. This might include shifting your focus towards building a solid online presence for your brand. This means if you do not currently have a website to represent your business or have not updated your brand website in a very long time, you need to take steps to upgrade your brand’s online existence.
An easy and fast way of building a professional and up-to-date website for your business is to create it on Strikingly. Strikingly is a growing website builder that offers tools for any layman to build a complete website in only a couple of hours. Our editor is simple to use and allows you to update or edit your site’s content any time you like. We provide a drag and drop interface, which means you do not have to deal with any coding or programming as you create your web pages.