As with any good partnership, your relationship with your customers is a two-way street. Not only do you need to understand your customers' needs and goals, but your customers need to have an understanding of your company and how it works.
The relationship between providing customers with a view inside your organization and revenue can be looked at as a chain reaction of sorts:
Transparency builds trust,
trust improves customer retention,
and customer retention increases profits.
Just how much does customer retention affect profitability? Well, widely published data indicates that acquiring new customers can cost five times more than keeping the customers you have. Simply reducing your retention rate by five percent can increase your profits by anywhere from 25%-125%.
Here is some more customer retention data, in case you need to brush up.
So, it's safe to say that customer loyalty is important. But how do you go about building that loyalty?
It is common knowledge that having a great product or service and providing a positive customer support experience contribute to customer loyalty. However, providing a window for customers into the culture and vision of your organization is becoming an important factor. In an era when culture is a central part of your marketing strategy, demonstrating a level of transparency that gives people insight into your organization is increasingly important to acquire and keep customers or members.
As customers gain increasing power and choice about who they do business with, transparency helps your relationship become that desired two-way street: you aren't just getting to know your customers"”they're getting to know, trust, and like you, too.
A mutual trust is essential to any functioning relationship. When it comes to your customer relationships, they need to trust that your company is going to follow through on promises, improve its weaknesses, and continue to provide necessary services.
They need to trust that you're working for them first, not yourself. Being transparent about your vision, operations, and progress can help bring that point home in a lasting way.
When people put their trust in your company, they're expecting to not have to deal with unwanted surprises. People don't like surprises and they don't like having to explain surprises to their boss.
Transparency provides a layer of responsibility for both problems and for driving toward ultimate success. That established trust helps customers and your company to know that obligations on both sides of the street are clear and will continue to be met.
If your company utilizes transparency to be more customer-centric, then your customers are more likely to understand the decisions that your organization makes"”regardless of if they always like them"”because they'll have the big-picture context behind them.
People want to do business with you because they feel like they know you. To know you, they need to understand you and to understand you they need to trust what you are saying and doing.
First, you have to decide whether you are going to make this communication public or publish it behind the login of your customer portal or private online community. There are advantages and drawbacks to both. It often depends on who your customers are, your brand, and the level of insight you are planning on providing.
Many of the business-to-business companies and nonprofit membership organizations that Socious works with focus more on being transparent to customers in their private online communities. This gives them much more control and allows them to segment their messaging to customers away from the public, the media, and prospective customers.
The following are proven and easily implemented ways to build stronger relationships with customers or members by giving them insight into your organization in your private online community or customer portal.
So, transparency can do good things for your relationship with your customers or members. But, how?
To help you develop a playbook for the kinds of insight into your organization that help build loyalty with your customers, here are eleven areas over three categories where you can be more transparent using your online customer or member community.
You've read the statistics: improved customer retention is one of the single best things you can do for the future success of your organization.
Giving your customers or members insight into some of the "behind-the-scenes" processes that go into creating your products or services helps build loyalty and keep their business.
However, being transparent isn't just a one-step deal"”it's a practice you can employ through various different elements of your private online customer community. Whether through your content, discussions, or events, customers want to feel like they know you. Your private online community provides a natural platform for strengthening your relationships with customers in this way.