Business transparency is a leading influencer when consumers choose brands

Have you heard the BBC mentioned in the news lately by any chance? The scrutiny the corporation is under right now highlights how difficult it is to please all your audience, all of the time. But it helps if you are honest and open. Will Spratt, director in the corporate affairs division at PR firm Cohn & Wolfe London, says: “In the last month alone, the BBC and Starbucks have felt the full glare of scrutiny over what the public and media would say is a lack of transparency. The same issues have significantly impacted other organisations like News International over the phone-hacking scandal.

“Individuals aren’t safe either – whether you are an MP trying to hide expenses or a cycling superhero, the skeletons just keep tumbling out of the cupboards.”

In light of the banking crisis, MPs' expenses and the News International scandal, would you say the transparency of a business has become a more important factor when deciding to buy from them?

Source: ICM Research

To gain insights into how recent issues have impacted and will continue to affect consumer views on transparency, PR agency Cohn & Wolfe commissioned research. It found that nearly seven in 10 (68 per cent) of consumers said that transparency had become more significant in the wake of recent high-profile scandals such as the News of the World phone-hacking investigation and the outrage around MPs’ expenses.

Perhaps the most striking finding was that transparency is now more important to consumers than brand appeal when it comes to buying products or dealing with a business or organisation.

Which is the most important indicator of a transparent organisation?

Source: ICM Research

The research also revealed 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 per cent of people citing this as significant.

Most important factors in decision-making process when choosing to buy from a company

Source: ICM Research

Revealing a distinct lack of trust in the openness and transparency of large organisations, over half of respondents (52 per cent) agreed that big businesses “divulge only what they need to for regulatory purposes.” Going even further, more than one in ten (12 per cent) of respondents believe that big businesses deliberately avoid transparency in order to make money.

Following the research, Cohn & Wolfe hosted a discussion seminar with panellists including James Ashton, head of business at London Evening Standard, The Independent, The Independent on Sunday; Dominic Burch, head of PR and Social Media at Asda; and Ioannis Ioannou, assistant professor of strategy and entrepreneurship at London Business School.

Which of the following best describes your actions upon encountering an organisation that you do not feel is transparent?

Source: ICM Research

What was clear from the discussion, says Spratt, is that when seen positively, transparency and to a further extent authenticity, provides a powerful opportunity for businesses operating in the always-on fully engaged digital era to turn the magnifying glass on themselves: “This can generate a new communications currency that will build trust with customers, regulators and other stakeholders.”

Methodology
 

The consumer research polled 1,000 UK adults and was conducted in October 2012 by the research company ICM.