Why Being Honest with Your Customers is Better than Being Transparent

Note:This article contains 1,232 words and 1 image, with an estimated read time of 5 minutes.

 

Honesty doesn’t only have to do with doing things the way they ought to be done, it also expresses the values in which a company/business/organization is founded. Telling the truth and acting accordingly is a good virtue and a measure of ethics and moral honour. Honesty is one of the best ways for an organization to achieve long-lasting success for its employees and customers.

There is a huge difference between being honest and being transparent. Honesty is when you reveal what you feel needs to be known, while transparency is when others can’t see something that YOU feel they need to know but might not be appropriate or relevant. An example of someone trying to be transparent could be; I was looking at buying a new vehicle and the business manager at the dealership wanted to be ‘transparent’ by showing me I am getting the vehicle ‘at-cost’, that they aren’t making any money on the vehicle. Firstly, I don’t need to know if they are making money or not because as the consumer that isn’t my business or responsibility, and secondly, if they are not making any money then why are they in business, and thirdly, is that information appropriate or relevant for me to know before I can make my decision to purchase the vehicle?

It is preferable to focus on being honest with your customer rather than giving the perception of being transparent. Being honest gives you a bigger sense of your responsibilities and comes with great reward. It entails the following:

  • Trust: People tend to be loyal to the people they trust and you gain customer’s loyalty by being honest with them. Customers are easier to lose when they do not trust you. If your conduct is exemplary, people will trust you. If you want to increase trust either with your customers, employees, or others ensure the following;
    • When you make a mistake, admit it.  People tend not to lose the trust already built up over time/occurrences that they had already in you
    • Ask for help, don’t be afraid to be honest with people when you need help
    • Apologize, this is often underutilized, when we can say we are sorry this helps others know you have identified a problem, it shows vulnerability that you are also human, and it allows both you and them to move forward

 

  • Vulnerability: Vulnerability is a “state of being” that you naturally should utilize with the people you trust. Honesty brings about trust, then trust leads to vulnerability – because it will/should feel natural for you to be vulnerable. A person’s decision to become vulnerable to another person is a risky one which comes with a lot of courage and feeling comfortable in a safe space. When you are being honest with people it begets honesty back which leads to them being vulnerable with you. They feel a safe connection and they feel secure enough to be genuine in their interactions.  The honesty you put into your business determines how much people become vulnerable to you.

 

  • Increases engagement and leads to getting feedback: your honest acts towards your clients will not only invite their trust and vulnerability, it will also make them feel engaged to you and always want to make comments, give feedback and suggestions which can be useful for the success of your business. Feedback is a way of making social connections and it can be problem solving and can only be gotten when you have created room for it. Feedback doesn’t necessarily need to be positive in this context but it gives room for improvement or consistency as required.

 

  • Allows for a habit of doing business with you: most people are impressed when you are being honest with them instead of this perceived ‘transparency’, providing information that they don’t need access to. Your level of honesty determines if they will do business with you and the good thing is that they won’t have a second thought before deciding if they will be involved with an honest person. A majority of consumers check out companies online before doing business with them, because people will provide feedback if you or your business are trustworthy or not. A reputation of honesty can attract new clients who want business partners they can trust.

 

  • Customers can be very forgiving if you are honest with them: if you make a mistake and own up to it, there are high chances that the customers will be impressed with your honesty and forgive or be empathetic with you for the mistake made. Your honesty will create a positive picture and they won’t be hesitant to do business with you.

 

Being Transparent

Back-office process: customers do not need to be involved in the back-office process. It is less important to leak business information that isn’t appropriate or relevant. Although, the market (industry) rewards companies that are perceived to being transparent with higher values because the risks of unpleasant surprises are believed to be lower. However, the road to transparency is not a straightforward one. Many business leaders still fear that not being transparent will make them vulnerable to criticism.

Transparency is a distraction while excessive transparency brings about excessive distractions. Business people who let the public know too much about the organization’s back-office process run the risk of creating an environment which is not conducive for its employees, because the employee might be distracted with things they shouldn’t instead of focusing on working towards the core deliverables for the organization.

 

The Bottom Line

Moreover, instability in most businesses is caused by sharing sensitive information about the organization online that is not appropriate or relevant. There is some information that shouldn’t leave the four walls of an organization.  This act can make good employees run for their dear lives as the job creates a sense of instability for them and the fear of losing their job because they don’t know if they will have a job to go back to. Imbalanced transparency is mainly responsible for high turnover amongst both employees and customers.

In reality, is transparency really for everyone? The answer remains No. Employers who ranked high for stability withhold sensitive information that is not appropriate or relevant for both their employees and customers working with them or doing business with them, and instead focus more on telling the truth and acting towards it, which allows them to recognize and reap the benefits of good virtue and an esteem for ethics and moral honour.

 

References

Taryn, N. 2017. The difference between honesty and vulnerability.

Mercer, K. 2018. Honesty versus vulnerability

MYP. 2016. Honesty in business

Silva L. The real benefits of honesty in the workplace

Quain, S. 2019. Why is honesty important in a business?

The Guardian, 2014. Corporate transparency: why honesty is the best policy

Arringdale C. 2016. The ugly side of transparency in the workplace.

 

Other blogs by the author (click here).

About the author: Kyle Kalloo is the Chief Executive Officer, Business Coach with Change My Life Coaching and Change My Business Coaching. Through his management training and experience with McDonalds, Famous Players (Paramount) and WestJet, and all of the ongoing learning and development he’s completed, Kyle has refined and perfected skills and processes and is eager to share how to execute them efficiently to help individuals and companies achieve even more of their dreams.  83% of Kyle’s business comes from referrals. https://www.changemylifecoaching.ca and https://www.changemybusinesscoaching.ca