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Most U.S. consumers expect transparency from businesses on their social media channels.

Over 8 in 10 people believe that social media has increased accountability for businesses, according to a new study from sproutsocial, From Risk to Responsibility: Social Media and Evolution of Transparency.

What does it mean to be transparent on social media? What kind of information should brands share to satisfy consumers? Sproutsocial’s study unpacks consumers’ expectations and how transparency shapes customers’ opinions.

We summarize key findings from this study in this entry in four sections: defining transparency, how it impacts consumers, how companies can show transparency and why the CEO should be transparent on his or her own social media channels.

Defining Transparency

86% of Americans say transparency from businesses is more important than ever before. Yet consumers only rate 15% of all companies as “very transparent.”

Transparency means “the quality or state of being transparent,” which has four relevant definitions in the Merriam-Webster dictionary:

1. free from pretense or deceit

2. easily detected or seen through

3. readily understood

4. characterized by visibility or accessibility of information, especially concerning business practices

Consumers define transparency in simpler terms:

• 59% openness

• 53% clarity

• 49% honesty

• 26% authenticity

• 23% integrity

• 19% communication

Consumers say transparency is important for 6 reasons:

• 58% companies are morally obligated

• 45% consumers expect it

• 44% most interactions are digital

• 40% social makes it more important

• 36% social makes it easier to monitor

• 33% employees expect it

Consumer Impact

A lack of transparency on social media makes 86% of consumers likely to take their business to a competitor.

But being transparent generates a lot of goodwill from consumers:

• 89% of people say a business can regain their trust if it admits to a mistake and is transparent about the steps it will take to resolve the issue

• 85% of people say that a business’ history of being transparent makes them more likely to give it a second chance after a bad experience

• 85% of people are more likely to stick by a business during a brand crisis if it has a history of being transparent

• 53% of consumers are likely to consider brands that are on transparent on social media for their next purchase

Transparency inspires consumers to become company advocates. The top consumer reactions to company transparency on social media include:

• 53% of consumers say a brand’s transparency on social media would cause them to consider that brand for their next purchase

• 42% recommend them to family/friends

• 37% say they would purchase more from a company that is transparent on social

• 31% share something positive on social media

• 29% publicly praise the brand

Transparency Show and Tell

Clearly a business cannot share every detail with consumers via their social media channels. But zero content would leave the 77% of the U.S. population with a social media profile hanging.

What should brands be transparent about on social media? The top topics that consumers say show a company’s transparency on social media are:

• 61% admitting mistakes

• 58% honest responses to customer questions

• 45% product/service pricing

• 43% manufacturing practices

• 39% marketing practices

• 39% employment diversity/demographics

• 37% financial performance

• 35% business performance

• 31% political/social issues

The specific topics that consumers want brands to be transparent about on social media include:

• 53% product/service changes

• 53% company values

• 50% business practices

• 49% company policy changes

• 46% employment practices

• 43% pricing decisions

• 41% marketing practices

• 40% diversity and inclusion

• 38% financial performance

There are 5 specific social media actions that consumers interpret as a lack of transparency:

• 69% withholding information

• 68% ignoring customer questions

• 58% ignoring employee questions

• 34% avoiding relevant political/social issues

• 20% not posting very often

Transparency from the Top

To most consumers, it’s not enough for a company to be transparent in its social media channels. Consumers expect company leadership to show transparency in their own social media channels.

63% of consumers say that CEOs with their own social media profiles are better representatives for their companies than CEPs who don’t have a public social media presence.

When CEOs display transparency on their own social media channels, consumers react in the following ways:

• 38% show their brand more loyalty

• 32% purchase more from their brand

• 28% post about their brand on social

• 26% refer their brand to friends/family

• 24% learn more about the CEO online

• 23% follow the CEO on social

• 23% publicly praise the brand

• 18% consider a job at the company

The social media content from CEOs that positively impacts consumers’ brand perception:

• 84% reasoning for business decisions

• 82% industry thought leadership

• 82% inside look at the company

• 81% next steps after a brand crisis

• 78% inside look at role as CEO

• 78% individual employee stories

• 73% a mistake the company made

• 71% a mistake the CEO made

• 64% the CEO’s family and friends

• 63% the CEO’s personal interests

Millennials’ perceptions of CEO transparency on social media:

• 71% say CEOs make a positive impact when they post transparently about personal interests

• 70% believe CEOs are better company representatives when they have their own social media profiles

• 69% want CEOs to have a personal presence on social media

• 30% say they will follow the profiles of CEOs that demonstrate transparency on social media

• 22% say a CEO’s transparency on social media would positively influence interest in working at their company