Trust but verify: From transparency to competitive advantage

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Focusing on customer service

What CEO hasn’t asked the following question: How much does it cost to replace a customer? Unfortunately, some of those CEOs will discover the answer. Even a cursory scan of the business news reveals a growing perception that customer service is in decline. Why? Generally, customers are losing trust in the organizations they deal with.

Focusing on customer service is another way companies can build trust and enhance customer satisfaction.4 Examples might include establishing a customer retention rather than a customer service department or establishing a complaint hotline that is independent of the manufacturing or sales processes. Whatever the specific approach, embarking on a strategy of focusing on customer satisfaction can be a leading driver for providing transparency and trust to customers, suppliers, and the marketplace as a whole.

Take Southwest Airlines for example. Unlike some carriers that have been hit hard by bruising reports in the press and on blogs regarding outrageous runway delays, late takeoffs and arrivals, and cancelled flights, Southwest has made a concerted effort to focus on customer service, not only to prevent problems from occurring in the first place, but also to deal with them effectively from a customer-service perspective once they do occur.

Recognizing that great customer service requires a high-level focus, Southwest has managed this issue from the top, having designated a single individual to coordinate all information related to major flight disruptions and to handle customer relations (letters, flight vouchers, etc.) related to storm, air traffic, or other delays.5 However, this customer-service mind-set also permeates the rank and file. Southwest employees are active participants in the various aspects of the company’s service culture, which includes treating customers as if they were family or friends, and ensuring that employees enjoy their jobs.6 Southwest’s historical commitment to customer satisfaction and to achieving the highest customer satisfaction ratings has paid off for the airline in terms of customer loyalty objectives.

Leveraging social media

Today, social media have transformed online communications in ways no one could have predicted. Starting out as an enhanced means of networking among individuals, these technologies are becoming powerful tools for businesses that wish to provide an impactful level of trust and transparency to the marketplace. These applications also enable companies to reach a broader audience than was previously possible, achieving a transparency beyond the printed word. The result? An enhanced opportunity to capture the hearts and minds of stakeholders by building trust around statements and promises.

The approximate number of users on Facebook, making its “population” larger than that of all but two countries.

Various applications and social networking tools offer numerous opportunities to create and reinforce positive company images.7 As a business tool, social media are coming on strong. At about 500 million users, the “population” of Facebook, for example, is larger than that of all but two countries. While in the wrong hands social media can be used in manipulative ways, they have become valid and powerful forces in building trust in a company’s products and services. An effective use of these tools includes taking a proactive stance in social media by acting swiftly on the feedback these mechanisms can provide.

Historically, advances in technology have offered companies new avenues for building trust, transparency, and credibility. Companies like Ikea have long realized that involving stakeholders directly online in collaborative activities establishes better relations and increases goodwill. Ikea, for example, invites customers who visit the company’s website to co-create with them by providing design assistance about how to configure the company’s modular furniture to best meet the customer’s needs. Providing levels of proprietary information and intellectual property in open domain builds trust and transparency and strengthens reputation and brand in the marketplace.

Today, social media have transformed online communications in ways no one could have predicted. These applications enable companies to reach a broader audience than was previously possible.

But the transformative aspects of social media are not really about technology. Rather, they are about the unpredictability and speed that going viral implies—that is, about the unpredictability of where information goes and the speed with which it gets there.

More and more companies are embracing social media tools to build trust and transparency in creative ways. Insurer Progressive, for example, provides online not only its own rates, but also those of its competitors, a nothing-to-hide attitude that goes a long way towards establishing trust. Cable TV provider Comcast monitors Twitter to pick up on and immediately respond to customer issues.8 This came about through the efforts of a Comcast employee and Twitter user who tired of seeing unanswered service complaints in online communities and decided to do something about it. More than just a company defender, this employee set out to actually fix problems. This somewhat radical approach resulted in a proposal to Comcast’s Chairman and CEO to have company engineers available to answer questions on message boards.9 More innovative approaches like these are bound to appear as this significant trend takes hold.

4 Christopher W. Hart, “Beating the Market with Customer Satisfaction,” Harvard Business Review, March 2007.

5 Jena McGregor (with Frederick F. Jespersen, Megan Tucker, and Dean Foust), “Customer Service Champs,” Bloomberg Businessweek, March 5, 2007.

6 Susan J. Campbell, “How Southwest Airlines Became a Model for Customer Loyalty.”, June 2, 2010.

7 Renee Dye, “The Buzz on Buzz,” Harvard Business Review, November-December 2000.

8 Lauren McCay, “Transparency,” CRM magazine, December 2008.

9 Daniel Roth, “The Dark Lord of Broadband Tries to Fix Comcast’s Image,” Wired Magazine: 17.02, January 19, 2009. Available at

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