The survival of an organisation depends a lot on transparency
Customers are demanding more transparency from the brands they work with. As society prioritises ethical standards and rewards organisations growing toward a positive transformation, transparency of a business is more important than ever before.
Business transparency encompasses building trust between an organisation and its customers. It involves openness and honesty when communicating with clients in order to establish brand credibility by maintaining the organisation’s reputation in relation to disclosing information relating to brand performance, achieving outcomes, and business values. In fact, a recent study proves that 94% of customers would be loyal to a transparent organisation.
Building a culture of transparency can aid companies in setting themselves apart from competitors, mainly by focussing on the organisation’s strengths in delivering success for its customers – significantly reducing time and resources spent on meeting a customer’s needs. Business transparency holds many advantages in establishing a lasting relationship with clients, leading to customer loyalty, retention, and trust.
Transparency Builds Trust
Partners that trust each other, perform better. Both parties should clearly understand the decisions and actions they own. Consequently, organisations cooperate with less friction and enhance accessibility to relevant information. A study in the Harvard Business Review notes that managers frequently adopt a trust but verify approach, evaluating potential partner behaviours during negotiations to determine whether they are open and honest. As one manager in the study advised, “To see if [the] person is forthcoming; ask a question you know the answer to”. Transparent companies are viewed as ‘ethical’ as their customers believe they have nothing to hide.
Transparency Instils Loyalty
The new era of the business-to-business model demands transparency. Companies want to know that what they do matters and trace a project back to their organisation’s vision. In a modern world where sustainability is not just a buzzword, clients want to know that partnerships are built with brands that support their morals. Unsatisfied customers disengage with a company to find one that works together to achieve a greater outcome and takes accountability for their actions. Effective business partnerships essentially rely on the expectation that both parties involved will fulfil their responsibilities.
Transparency Results in Clarity
Organisations need context to their decisions and actions, whilst customers need an insightful overview of the strategy to achieve objectives. Transparent reporting habits aid the tracking of a project’s direction and ease adapting to unforeseen challenges along the way.
Peter Drucker, an Austrian-American management consultant whose writings contributed to the philosophical foundations of the modern business corporation, once stated, “Quality in a service or product is not what you put into it. It is what the customer gets out of it”. This ultimately means that customers expect a personalised, sophisticated, and desirable customer experience from the first time they learn about your brand until all the objectives are met. When measuring customer satisfaction, organisations need to look at three primary KPIs from their products or services – increasing sales-process efficacy, saving costs, and overall client fulfilment.
Customer experience measurement metrics have been created in order for organisations to gain more insight into what their customers are thinking. A Net Promoter Score (NPS) can be calculated to assess the effectiveness of a brand’s transparency and the quality of its customer service. NPS is a metric of how the market calculates an organisation’s value to its customers and the probability, on a scale of 0 to 10, of them recommending a brand to others. This score can then be utilised to address any problem areas, improve the customer journey, monitor loyalty trends, and consequently grow new business opportunities through referrals or upselling. This is a universal measurement that can track change over time and allow a business to benchmark against its competitors.
Transparency between business partners is a game-changer that can lead to future-proofing a company. Organisations that practise transparency build strong, positive, and lasting relationships that enhance customer loyalty. Furthermore, organisations that is determined to be open and honest with customers set themselves apart from the competition, generating increased ROI. KPMG mentions that customer loyalty is ‘the gift that keeps giving’ and organisations that practice transparency can relish in the benefits of this gift for years to come.
About the Author
Jarosław Granat is Head of Client Engagement at Future Processing.
Featured image: ©Andrii