Published on May 13th, 2015 | by Millennium Magazine Staff0
The Business of Transparency: Are You Doing All You Can to Win Over Customers?
Transparency is as scary in business as it is in personal relationships.
Should you share everything, even if it might leave you sleeping on the proverbial couch? Unfortunately, in today’s increasingly connected society, the fear of bad press has grown to positively phobic levels. It’s easy to get bogged down worrying about what will happen if your business isn’t doing well or you make a big mistake.
But the fact is that a lack of transparency can actually be more damning than a tarnished reputation. Customers value trustworthiness so highly that if they doubt your company’s honesty, they won’t think twice about taking their loyalty elsewhere.
Transparency Is the Currency of Small Businesses
The power of transparency is especially strong for small businesses — every client relationship is vital, every misstep is remembered, and one single piece of negative publicity can mean the difference between failing and thriving.
Transparency can create a sense of community, too. For local and regional businesses, being honest makes customers feel like they’re part of a family. For example, when one of our customers brought in her diamond ring to have it resized, the sales associate failed to notice that there was a small chip in the side of the gem. Once the ring was in the hands of our jeweler, however, he quickly noticed the oversight.
In this situation, transparency seems risky. After all, what if the customer thinks we’re blaming her for chipping the diamond or resents us for the extra cost of getting the stone fixed? Nonetheless, our transparency policy dictated that we had to contact the customer right away to explain the oversight and advise her to make the repairs. And a funny thing happened: She appreciated our honesty so much that she pledged her lifelong loyalty.
Here’s how you can harness the power of transparency to strengthen your small business:
1. Cut the red tape. To achieve this close connection with your client base, you need to do away with the impersonal aspects of your business. Rigid policies and procedures have a way of removing authentic human connection from business interactions.
Part of the reason my business has such a loyal customer following is our “no red tape” policy. We simply do whatever is needed to meet our customers’ needs — from rectifying problems that aren’t our responsibility to going the extra mile to personalize a customer’s experience.
2. Take responsibility for errors. The PC manufacturer Lenovo kept up an impressive reputation until earlier this year when a security flaw emerged in a piece of software it included in its computer packages. This could have spelled disaster for the company, but Lenovo decided to own up to the mistake.
“We messed up badly here,” said Peter Hortensius, the company’s chief technology officer. “We made a mistake. Our guys missed it. We’re not trying to hide from the issue — we’re owning it.”
Because the company exercised transparency, it actually increased the loyalty of its customer base, and as a result, it’s still the most popular PC manufacturer.
3. Be open about your sources. You can tell when a company is open and proud about its product sources. Take sustainable grocer Whole Foods Market, for example. It has a dedicated following because it practices what it preaches — it sources local products and is committed to transparent labeling.
Being open about your sources is especially crucial if you want to redirect your brand or diversify into a new area. Just look at Domino’s. The popular pizza company actively engaged its customers to determine how it could improve the ingredients it uses. This sent the valuable message that Domino’s cares about its customers’ tastes, and it gave Domino’s a huge loyalty boost. Being transparent about your sources helps customers trust your business.
4. Don’t confuse your customers. Of course, it’s certainly possible to be too transparent. Sharing every facet of your company with the public can cause needless confusion or lead to preconceived notions about your company that have nothing to do with your products or service. For example, your customers don’t have to know the CEO’s salary or the religious views of your executives.
Many companies fall into the trap of associating transparency with industry-specific language, but this can also be a misstep. Customers shouldn’t need a technical degree to understand what you’re telling them, so make explanations concise and conversational to avoid any misunderstandings.
Some businesses view trust as a nebulous concept instead of a business asset, and they miss out on a big opportunity. Trust is key to customer retention and revenue, and developing it shouldn’t be an afterthought. When customers put trust in a company, they start to create a long-term relationship with that brand and produce a stream of continuous revenue. Be generous to your customers, and they’ll be generous to you.
About the author
Mills Menser, president and owner of Buchroeders, is a third-generation diamond dealer and entrepreneur who’s on a never-ending quest to improve the customer experience.