Editor’s note: at ClickSend we are all about Business Communications, Solved. And we do this for our customers and to our staff as honestly as possible. We believe an honest and transparent approach is better in the long run so when Nicholas from Writer said he wanted to do a guest blog for us on this topic, one he knows a lot about, we said yes straight away. Honestly, we did. There’s some seriously interesting stuff in here and we hope you find it as informative as we did.
They say charity begins at home. Well, so do honesty and integrity. Honest communication helps in building trust, loyalty, and healthy relations internally with your employees and externally with your customers.
Honest communication is the bedrock of a healthy corporate culture and should cut across all layers and levels of a business's communication, from leadership to employees, between co-workers, and from marketing to customers.
Honesty should permeate all internal and customer-facing actions of the company. This includes strategies from customer acquisition at the top of the funnel to conversion and retention at the bottom of the funnel.
Honesty and integrity are perhaps the two most commonly used words in mission statements of all companies. At the core, these are binary values. They are either 0 or 1. However, corporate cultures in the real world are characterized by shades of grey.
Before we look at the benefits of honest communication, let's cast a look at four basic levels of honesty that prevail in most corporate setups. Let’s look at the four shades of grey.
4 Levels of Honest Communication
Honest communication in the real world exists on a sliding scale. Some organizations are higher on the scale than others, and there's always scope for improvement.
The key for organizations is to identify where they stand currently and identify the steps required to transition to the next level.
Companies at the bottom of the pyramid lack honesty in internal and external communication. Before you think that these companies are mostly small, fly-by-night operations, know that some of the largest corporations have occupied this space. Enron, WorldCom, and Lehman Brothers are three examples that come to mind.
From here, there's nowhere to go but up.
Reactive honesty is where most companies find themselves. Here, people share their ideas honestly, but only when asked, the right questions trigger honesty.
The issue with reactive honesty is that by the time the right questions are asked, the problem has spun out of control. At which point the manager or customer might ask, "Why didn't anyone tell me this earlier?" To which the most common answer is, "Well, no one asked, and I wasn't sure if it was my business to comment."
If this sounds familiar, your organization is at the reactive stage of honesty.
The next step up is proactive honesty, where people share ideas and issues openly on a proactive basis. As a result, problems are identified and resolved before they get out of hand. Communication at these companies helps in building trust within the organization and externally with the customers.
Proactive honesty is a good place to be for most organizations, and a good foundation for customer acquisition based on trust. However, there is still room for improvement.
Foreshadowing honesty is the "gold standard" of honest communication. People share ideas and current concerns on a proactive basis while foreshadowing potential issues that may occur down the line.
The proactive and predictive honesty and transparency in business operations build robust internal and external relationships based on trust and openness.
Foreshadowing honesty is built over time at evolved organizations and based on the following elements:
- A safe environment – People need to feel secure that they won't be penalized for sharing unpopular ideas or negative feedback.
- Benefits and rewards – Honesty has to be appreciated and rewarded for creating a self-sustaining cycle.
- Risk tolerance – People shut down in a risk-averse environment. A culture of risk tolerance encourages free and honest sharing of ideas.
Pro Tip: Honesty percolates top-down at companies. Hence, the C-suite executives need to spend quality time engaging with employees to seek feedback. The best leaders base their communication on openness and an inclusive language glossary that precludes discrimination.
Let’s now turn our attention to look at the concrete benefits of honest corporate communication.
5 Tangible Benefits of Honest Business Communication
Honesty is a value that needs consistent delivery. Sometimes it needs to be managed with sensitivity, while at others, it requires courage.
The five direct benefits of honest communication can be summed up as follows:
- It builds trust
- Honesty inspires loyalty
- It costs less in the long run
- It amplifies your brand value and reputation
- It drives employee engagement
Let's look at each benefit in greater detail.
1. Honesty Builds Trust
Trust is a multi-dimensional construct built over time and based on the ebb and flow of every trust-building and trust-eroding experience. There are no quick-fix solutions to building trust, be it with your employees or your customers.
Every authentic and honest communication is a trust-building experience, and consistent authenticity is the bedrock for building internal and external trust. Building trust within an organization drives overall productivity as employees are motivated and commit to additional discretionary efforts.
This earned trust also helps businesses in managing risk with a higher level of safety. Earning the trust of your customers is the most organic path to gaining their loyalty.
2. Honesty Inspires Loyalty
Treat your employees the way you treat your customers. Your employees are the ones who deal with your customers on a day-to-day basis. Authenticity and honesty with your employees will build trust and loyalty, and in turn, they will reinforce these values at every touch-point with your customers.
Customer loyalty is the result of gaining their trust. According to a Labels Insight survey, 94% of customers remain loyal to brands that are honest and transparent in their dealings, while 74% of respondents said they would pay more for products if companies were always truthful.
Owning up to mistakes is a powerful way to build loyalty. Own up to a mistake to your customer and chances are they will respect your honesty and forgive the mistake. It will help in building both trust and loyalty.
3. Honesty Costs Less in the Long Run
The cost of employee turnover is equivalent to 2-3 months' salary, while the cost of customer acquisition is 5X that of retaining them. These are costs that may not be directly visible above the line but have an adverse impact on your bottom line.
Transparency and honesty may cost a company a lost sale in the short term. Saying no to a lead who has inflated and unrealistic expectations is not easy, but sticking to your moral compass prevents onboarding a problem customer and helps in retaining your existing customers over the long run.
4. Honesty Amplifies Your Brand Value and Reputation
Consistent delivery of authenticity and honesty has a cascading effect on the reputation of a company, internally with its employees and externally with its customers.
Over 84% of B2B and B2C customers read online reviews before making a purchase decision. Customers who have experienced an authentic and honest interaction with a brand are more likely to leave a positive review when asked.
Positive reviews across review platforms, as well as word-of-mouth feedback, helps in amplifying a brand's reputation and increasing its brand value (how the customers view the brand).
5. Honesty and Authenticity Raise Employee Engagement
Companies that foster open and honest communication are 15X more likely to have engaged employees and loyal customers. Higher engagement levels translate into higher productivity, loyalty, and profitability for the company.
However, according to a Gallup survey, over 67% of employees in corporate America are disengaged. The single largest reason for this disengagement is a lack of honesty and transparency from management.
The effect of disengaged employees is a double-edged sword. Either these employees are likely to leave, or they become less productive.
Like unhappy customers, these employees are more likely to share their negative experiences – for example on Glassdoor. The negative word-of-mouth publicity affects the reputation of the company and makes it tougher to attract top-level talent.
Honesty and transparency in communication and actions help a company build an open and healthy culture based on trust and loyalty.
In the real world, honest communication exists on a sliding scale and should evaluate where they currently stand and how to progress to the next level.
The benefits of honesty and transparency in communication include building trust with your employees and customers and gaining their loyalty. Consistent delivery of honesty and authenticity results in higher employee engagement, and hence, higher profitability for the company.
About the Author
Nicholas Rubright is the communications specialist for Writer, an AI writing assistant designed for teams. Nicholas has previously worked to develop content marketing strategies for brands like Webex, Havenly, and Fictiv.