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How customer transparency helps companies maintain loyalty

In an age when customers have more options than ever before, it's essential that businesses gain and maintain customer trust -- and that happens through customer transparency.

It's more important than ever for organizations to gain and maintain the customer's trust.

Retention can be difficult because customers have so many options at their disposal. If something goes wrong in their dealings with a company, they can simply take their business elsewhere. Customers have so many options for places to buy, including in store, online, social media and mobile apps. And information about the products and services that customers seek is readily available.

The key to customer retention is achieving customer loyalty -- and one of the strongest ways to create a loyal customer is through transparency.

The importance of transparency

Customer transparency means honesty and integrity in all customer communications. This includes keeping the customer up to date on good news -- "Your order has shipped ahead of schedule!" -- and bad news -- "We were mistaken; we are out of stock at the moment." It also means keeping the customer informed by asking for their feedback and notifying them of improvements to products and services, treating the customer's data as sacred and making policies clear.

The first step to pursue transparency with the customer is to achieve it within the business itself.

In a digital universe where customers can easily shift allegiance to a competitor, trust is a powerful commodity. Transparency fosters trust; customer experiences that build trust march in a straight line to customer satisfaction, and a satisfied customer will remain loyal.

Benefits of customer transparency

The central benefit of transparency is customer loyalty and retention, but it's not the only one.

  • Customer transparency unifies the business. Organizations that commit to transparency can't do it by executive decree, nor is it strictly the province of customer service. It must be a commitment made at every level of the business -- including the C-suite, help desk, public relations and product development. An honest, frank approach to all customer contacts, regardless of context, is a pledge that all team members need to share throughout the company.
  • Customer transparency improves performance. When a company is transparent with customers, it becomes more important to get order fulfillment, problem resolution and quality of customer contacts and experiences right. Everyone in the company must step up their game -- and that generally means employees will take pride in their performance, resulting in greater satisfaction on the job.
  • Customer transparency enhances the brand. If a company is honest and transparent with its customers, the marketplace will regard it highly and respect it more. Organizations establish brand loyalty by strengthening the bond of trust between company and customer.
  • Customer transparency boosts sales. Brand loyalty means repeat business, which is desirable. But enhanced brand reputation in the marketplace means attracting new business, based on that reputation. And that means even more business.

How to be transparent with customers

There are many steps to customer transparency, and it's wise to incorporate as many as possible. 

  • Build trust in-house. The first step to pursue transparency with the customer is to achieve it within the business itself. It doesn't make much sense to attempt a policy of transparency with customers if it doesn't exist within the company culture. Transparency needs to be top-down. Employees need management -- especially upper management -- to be open and honest with them before they feel free to be open with customers.
  • Don't play games with pricing. Nothing obliterates a customer's trust faster than being told one price, only to find that price creep up without notice. It happens all the time with utility companies, and it generates customer anger. If acquiring and keeping customer trust is a priority, complete transparency in pricing -- and earnest, truthful notifications when changes occur -- is an absolute must.
  • Be honest about customer data collection. Most companies collect customer data passively. Data such as a customer's purchase history or their browsing behavior on the company website goes into a database somewhere. A CRM system can track a customer's purchase history while web analytics can give a business clues about customer browsing behaviors. And that's fine; the company that doesn't collect this data is crazy not to. But it's vital to be upfront with customers about what data the company gathers, and for what purpose -- and to provide an opt-out if the customer is uncomfortable with it. Businesses should never sell the customer's data without permission.
  • Publish company values. A reputation for honesty goes a long way, and it will go even farther if it is part of the company's values. Businesses should make expectations of work quality, corporate citizenship and approach to relationships clear to the customer. This puts a meaningful frame around the transparency that lies at the center of the customer relationship.
  • Never stop communicating with the customer. The essence of any successful relationship is strong communication. Social media makes communication easier, as it is where customers spend a lot of their time. Businesses shouldn't overlook broad communication with the entire customer base. Regular press releases are a great way to remain in the customer's awareness. Dialog with the customer is also important. At every touchpoint in the customer journey, businesses should encourage the customer to offer candid feedback. In return, companies should respond to that feedback in a timely manner and as completely as possible. Whenever possible and appropriate, customer contacts should be proactive; reaching out is a way to make anyone feel more valued, and the customer is no exception.

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