In 2016, Label Insight launched their Transparency ROI Study to quantify the viability of transparency marketing as a source of meaningful brand growth. The study prompted consumers to consider how brand transparency resonated and whether transparency could contribute to shaping or changing consumer buying habits. Here is the only number you need to know: 94% of respondents were more likely to be loyal to a “transparent” brand (1).
This is especially true in the age of COVID-19, where consumers may feel compelled to ensure their purchasing decisions are backed by well informed research in order to take control of their family’s health and safety (2). Companies that engage transparency marketing as a keystone facet of their overall brand growth strategy can connect with consumers and potential partners in this fruitful part of the market.
What is Transparency Marketing?
Transparency marketing is exactly what it sounds like. It’s a strategy wherein the underlying coherence of a company’s marketing and brand growth plan is informed by an inclination towards open, honest, transparent messaging and communications across platforms. With so many disingenuous and seemingly obscured mechanics behind other strategies like targeted ads proliferating across social media and search engine platforms, consumers and business partners seem more likely to gravitate towards a company they feel they know and can trust (1).
Transparency Marketing for Production and Operations in 2020
Consumer brands targeting millennial buyers can embrace transparency marketing to set themselves apart from throngs of similar product offerings. For example, Everlane, a popular clothing company based in Los Angeles, and Mejuri, a fine jewelry line based in Canada, both emphasize their direct online price offering versus “retail price,” wherein the “retail price” is displayed as a much higher cost to the consumer. The effect is apparent transparency—Everlane even has virtual “factory tours” so consumers can see online where their goods are produced.
How does this translate into production and operations across sectors? Transparency marketing doesn’t need to involve a massive investment, it simply relies on turning the company gaze inward and developing messaging based on what your company does well.
For example, many food producers and processors, like our friends at Portofino Wholesale Bakery on Vancouver Island, fought to retain all of their employees during the worst of the COVID-19 downturn (3). Sharing this information with consumers or potential business partners can translate favourably: a recent research collaboration between Goldbeck Recruiting Inc. and Canadian Alliance Terminals via an Angus Reid Forum found that 64% of respondents were more likely to purchase from a company that avoided layoffs; 74% were more likely to engage with a company that improved safety measures for their employees (4).
Given the economic turmoil brought on by COVID-19, consumers and potential industry partners are being more careful about how, and where, they spend their money (5). If consumers feel that companies are doing their part for the betterment of their employees, wider social equity, and the environment, they are more likely to buy from that company (1). How will they know the steps being taken if all of these measures are absent from messaging?
Case Study: Everlane and Transparency Marketing Gone Wrong
It’s worth revisiting the case of Everlane and its transparency marketing to see not only how powerful such marketing can be, but also to see how transparency strategies can go terribly awry.
A major part of Everlane’s success as a brand has come from its transparency marketing. The company freely supplies information about the cost of the materials, labour, marketing, and transportation that go into the production of their goods and they place an emphasis on recycled goods and fair working conditions in factories as well as claiming work towards an environmentally sustainable supply chain. All of these points aided the whirlwind rise of the brand to the millennial hall of fame (6).
But recently, ex-employees have spoken out about Everlane’s exploitative short term contracts and low wages for American workers, as well as the company’s apparent union busting which saw dozens of employees laid off earlier this year (7). Further, ex-employees recently released a document detailing first hand experiences of racism and prejudice within the organization (8). They deemed Everlane’s central marketing strategy “Convenient Transparency.” This convenient transparency has led to calls for a boycott and the company remains under fire as more ex-employees come forward.
Real Transparency, Real Growth
How should your company take up transparency marketing the right way, then? It’s not as difficult as Everlane would make it seem. Companies should share their “wins” with consumers or potential business partners—thorough employee support, excellent health and safety standards, and environmentally responsible practices, for example. But companies should also share their losses-those areas requiring improvement-along with what is being done to fix those issues. This is the real transparency that counts: taking responsibility for aspects of production and operations that need to change and being frank about rectifying real company problems.
The new corporate social responsibility is not only about image; it’s about walking the walk. Transparency marketing allows companies to maximize the value of great company policies by sharing them with consumers, thereby creating authentic and profitable relationships. From happier employees to more loyal customers, transparency marketing might be the boost your company needs.
1 Inc, Label Insight. “Transparency Leads to Increased Brand Loyalty and Perceived Brand Worth.” Accessed June 25, 2020. https://blog.labelinsight.com/transparency-leads-to-increased-brand-loyalty-and-perceived-brand-worth.
2 Vogue Business. “Covid-19 Has Emphasised the Importance of Brand Transparency.” Accessed June 25, 2020. https://www.voguebusiness.com/sustainability/fashion-revolution-transparency-index-2020-covid-19.
3 Personal communication between Matt Cimon at Portofino Wholesale Bakery and Rose Agency, June 2020.
4 Research collaboration between Goldbeck Recruiting Inc. and Canadian Alliance Terminals using the Angus Reid Forum, June 2020.
5 Deloitte, Inc. COVID-19: Voice of Canadians and impact to retailers. Accessed June 25, 2020. https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/finance/ca-en-covid-19-voice-of-canadians-and-impact-to-retailers-aoda.pdf
6 Garik. “We Tested Everlane and They Failed. Here’s What Happened.” Eco-Stylist (blog), July 24, 2019. https://www.eco-stylist.com/we-tested-everlane-and-they-failed/.
7 Schiffer, Zoe. “Everlane Customer Experience Workers Say They Were Illegally Laid Off.” The Verge, April 2, 2020. https://www.theverge.com/2020/4/2/21069279/everlane-customer-experience-union-majority-illegal.
8 The Ex-Wives Club. “EVERLANE’S CONVENIENT TRANSPARENCY.” Accessed June 25, 2020. https://docs.google.com/document/d/1fRAdftTxRvcq4tsUryXl_Sjcot0H_mG_liyXuQrMcOg/edit?usp=embed_facebook.