Honesty and transparency – two words that warm the cockles of my heart but that are not often associated with the world of business. I am writing this blog having just watched a Hollywood movie about the 2008 banking crisis – The Big Short, featuring Christian Bale, Steve Carell, Ryan Gosling and Brad Pitt is a tough watch – not because of the quality of the acting, but because of the almost completely unbelievable plot. Sadly, the global economic collapse on which the plot is based was not fiction. It was very real.
We live in a world where it is difficult to know exactly who we can trust. Since 2008, business related ‘horror stories’ continue to shock consumers – from Tesco, to Mitsubishi. From Volkswagen to Npower – you would have thought that commercial enterprises would have learned something since the days of Lehman Brothers and Bear Stearns. The reality is that there still appears to be a lot to learn.
There is one phenomenon that is undoubtedly having an effect on the way businesses behave. It is a veritable tidal wave that has been growing since the turn of the millennium. That phenomenon is you and I – the consumer. Eight years after the economy went into melt down, we are living in societies who crave and demand more openness and transparency. Before we do anything, we want to know the truth first – or to get as close to the truth as we can. Businesses are fighting this phenomenon, but they may be fighting a losing battle.
It is impossible to go online these days without seeing some form of ‘customer driven measurement’. From Google reviews, to Trip Advisor, to Trust Pilot – whether it is a holiday, a smartphone or a designer dress – the consumer is able to see how others perceive the product or service they are considering ‘investing’ in. Online forums, Facebook groups and Twitter accounts all add to a melting pot of consumer driven transparency. As a business it makes it significantly more difficult to do anything other than ‘exactly what it says on the tin’ (so to speak). Deviate from what you are supposed to do and the consumer will not just find out – they will tell everyone else as well!
As someone who passionately believes in organisations making money by being consistently brilliant at fulfilling their purpose, ever increasing transparency is a fantastic evolution in the world of Customer Experience. Whilst there will always be some who are cynical of online reviews (as to the genuine nature of them), I think that any form of publicly available measurement can only continue to help put the customer at the heart of business decision making.
In my opinion, the more we can see ‘the truth’ about the businesses we interact with, the better. One fantastic example of this is in the food and beverage industry. Since 2010, any establishment in the UK serving food has been given a ‘food hygiene rating’ by their local authority. Essentially, the rating determines how hygienic the establishment is – rather important if you are selling food. It is not mandatory to display the rating given – although any consumer can find the rating on the Food Standards Agency website.
For me, this measurement system is of tremendous benefit to both the company and the customer. Whenever I look to eat in a restaurant I have not visited before, the first thing I always look for is the food hygiene rating. If it is not displayed, not only does that fact make me suspicious, but it will usually lead to me taking my business elsewhere. It is such a powerful way of me being able to make an informed decision based on fact.
I also love the way that the food hygiene rating system can change the way companies behave. Who would NOT want to have a five (very good) rating? Being able to display the fact that you have been awarded a rating of five drives a focus on doing the right thing – for your customer and your own people. I know of national restaurant chains who insist on a five rating being absolutely mandatory – so they should be. If a restaurant manager knows that his performance is not just going to be measured, but also stuck on the front door of the building for all potential customers to see, it does not half have a powerful effect on his actions.
This public display of ‘standards’ is not an entirely new concept. Hotels have displayed a ‘star’ rating for many years. The ratings allocated to any establishment have a fundamental impact on the customer buying decision. With the added weight of customer feedback being left every day on sites such as Trip Advisor, the travel industry is as exposed as any other to the power of measurement for all to see.
Imagine a world where this kind of public measurement existed for ALL organisations – in all industries. What if your energy company had to display their local authority measured rating system on their website and communication material? What would happen if retailers had to display their ratings on the front door? What if your bank had to display its rating on its mobile app and all other touchpoints in the customer journey?
This may sound like the mutterings of a mad man, but crazier things have happened. I applaud the authorities for introducing the food hygiene ratings – I only wish they would make it mandatory to display them publicly across the whole of the UK. I think that the system is the benchmark for other industries to follow. It is not about bureaucracy – it is about transparency. At least if we all know the ‘score’, we can make an informed decision before parting with our hard earned cash. Now that is what I call the transparent Customer Experience!
Just ask Chipotle, the chain known for poisoning customers with e-coli, listeria, and salmonella, how important trust and transparency can be. Food hygiene assurance is emotional, and without trust and positive reputation a restaurant can quickly lose its customer base.
Ian: I agree that consumers are increasingly demanding truth before deciding to buy. I don’t see this as a new phenomenon, but rather a manifestation of our ancient emotional wiring, as author Jared Diamond describes in his book, The World Until Yesterday. Back when humans mainly lived in small, communal societies, and lacked the ability to travel long distances, the ability to trust (and distrust) was often a life or death matter.
The Internet disconnected many of the mechanisms that we evolved. A PwC report cited in an article, Firms Built on Trust Are Growing Rapidly, Report Finds, (The Washington Post, April 17, 2015) indicates that “only 29% of consumers said that they trust people more today than they did in the past. And 62% said they trust brands less today.”
But we do some extraordinarily trusty things online that make those findings seem paradoxical. The article asks important questions: “If society is growing more cynical, why are so many people letting strangers rent their bedrooms or drive them around? Why would you trust a company that ships you a dress worn by another woman last week if you don’t trust people that much? How is the economy suddenly creating billion-dollar businesses around the idea of communal consumption at a time when we’re not feeling communitarian at all?” Yep, I wondered the same things myself.
PwC’s answer, according to the article, was “If trust in individuals and institutions is waning or at best holding steady, faith in the aggregate is growing. Companies predicated on trust among strangers are rising as general trust in society is falling.”
That’s partly why I don’t favor a government (or quasi-government) institution performing cleanliness rankings, which would be fraught with other problems: What would restaurants have to do on days that they were non-compliant (e.g. no Certified Food Safety manager on site, no running water, or insect infestation discovered in ingredients – all fairly common violations that occur on random restaurant safety inspections that I read about every week). Would they be required to obscure their food safety rating until the violation were corrected? What would happen to the question, “how would you like your steak prepared?” After all, ‘rare’ means the center of the meat cannot reach the temperatures that might be mandated for ratings compliance. Should a single number variation, say a ‘4’ vs. a ‘5’ really matter to most consumers? If not, why create an issue before the customer walks in the door?
I live in the Washington, DC Metro area where restaurant dining is a near-obsession, yet we don’t have system similar to the one you described. I haven’t delved into the reasons, but I think it has to do with the fact that a) we already have random routine restaurant inspections, and violators are publicly cited, b) local jurisdictions don’t have the funds to oversee the program, c) getting restaurant owners, chefs, and consumers on the same safety page would be like herding cats, and d) when making a dining choice, most people go somewhere they already like and trust, seek favorable online reviews, or go with a friend’s recommendation.
This article is about a lot more than Food Quality. Electrical device manufacturers work hard to achieve their UL seal and many other verticals and geographies work for thier CE mark. U.S. auto manufacturers work to improve their fuel economny rating from the EPA and crash worthiness ratings from the IIHS. Many products are proud to display a recycle badge. In the CX world, buinesses and customers care greatly about the Temkin and Forrester ratings. And speaking of Forrester, how many companies brag about in the Forrester Magic Quadrant?
In the area of ingestible, FDA and USP approvals are important and toothpaste vendors love the USDA seal. In transportation, airline safety, on-time arrivals, and lost baggage data from the Department of Transportation garner lots of views. In consumer products there is Consumer Report.
So, where there are credible ratings the public uses them. The issue is in the areas where there is no independent raters available. I don’t like the government suggestion. I believe that if the government isn’t the problem then it isn’t the solution either. Communities seem to be the solution but they can easily be gamed – just ask Yelp views. I don’t have a good generic answer but maybe someone else does.