More than two thirds of consumers in the U.S., UK and China rate “honesty and transparency” alongside price and quality when considering whether to buy a product or brand, according to a new report from global communications agency Cohn & Wolfe.
In the UK and USA, honesty was voted the third most important factor after price and quality. In China, honesty was considered more important than price—only surpassed by product quality as a key factor—as consumers now have increased spending power and the ability to make informed decisions in a market with greater choice.
Following a number of scandals affecting multinational companies recently, consumers in all three markets are now demanding that major brands be open and transparent about a range of issues—starting with product quality and safety. A total of 67% of those polled want to see how companies comply with product quality and safety standards. Again, China led the field, with 73% demanding such information.
Based on consumer research of 3,000 adults across the UK, USA and China, the new Cohn & Wolfe report, entitled From Transparency to Full Disclosure, explores what consumers in three of the world’s biggest markets really think about the honesty, transparency and ethics of brands today. The findings provide important insights for international brands.
“The key insight for major brands is clear: embrace transparency and openness like never before, and consumers will reward you for it. Conversely, they may well vote with their wallets if you don’t,” said Geoff Beattie, global head of corporate affairs for Cohn & Wolfe, in a news release.
“Even if a company is sitting on information which may cause negative public reactions in the short run, it is better to be open with consumers and admit failings where they occur. The public will forgive you for mistakes, but not for covering them up.”
From Transparency to Full Disclosure: Key findings
- Transparency has become more important in the past year, and now stands alongside quality and price in the decision-making process for consumers. In the past year, the amount of UK consumers rating transparency as an important factor in their purchasing decisions has jumped from 53% to 66%. Moreover, amongst Chinese consumers the transparency and honesty of a business is now even more important than price (79% vs 65%).
- Mistrust in companies’ transparency remains. More than a third (37%) of consumers in the UK, USA and China think that companies only disclose what they need to for legal reasons and over a fifth (22%) think companies only divulge the information that portrays the business in the best light. Underlining this mistrust, nearly one in six (14%) consumers think big businesses deliberately lack transparency and honesty in order to make more money.
- Consumers don’t just vote with their feet, but with their friends, families and influence. Half of consumers would stop buying a product or a service if they found out the company did not reflect their personal values, whilst 30% would encourage their friends and families to do the same. A quarter would go even further and support a boycott of the company.
- There are some companies getting it right. Respondents were asked in an open-ended question to name the three companies they consider to be most transparent. Out of the most transparent companies ranked by UK consumers, everyday brands such as retailers Marks & Spencer, The Co-operative, John Lewis and Tesco dominate the top of the list. For U.S. consumers, technology giants such as Apple and Microsoft score well in terms of their transparency and honesty. It was a similar story in China, with consumer electronics and technology brands Haier, Lenovo and Huawei dominating.
- Chinese consumers are the most demanding of businesses. While 61% of global consumers think it is important that companies they deal with reflect their values as a person, this rises to 69% amongst consumers in China. Moreover, Chinese consumers are also more likely to follow business issues than their Western counterparts (88% compared to 68% of consumers in the USA and 67% in UK) and be angrier about scandals affecting companies.
- Issues affecting food quality and safety top the consumer “anger meter.” Nearly two thirds of consumers would be extremely angry if companies produced food in an unsafe or unsanitary way, while half would be extremely angry if a company failed to report some of the ingredients used in its food products.
- CEO = Chief Ethics Officer. 84% of UK and US consumers and 90% of Chinese consumers believe that if you are the leader of a company you cannot claim ignorance about something bad happening in your business, showing that there are no excuses for today’s leader.
The research of 3,000 adults across the UK, USA and China, was conducted online in September 2013 by the research company Toluna. The report explores what consumers in three of the world’s biggest markets really think about the honesty, transparency and ethics of today’s brands. The report follows on from the Cohn & Wolfe Corporate Affairs 2012 Authentic Brands report, Transparency & Authenticity: A new communications landscape.
Edited by Richard Carufel