Importance of Business Ethics from a Marketer’s Perspective
This post, “Importance of Business Ethics from a Marketer’s Perspective,” was guest written by Anthony Bart, Internet Marketing Strategist at The Bart Organization. The Bart Organization is a South Florida Internet Marketing company that helps businesses of all sizes either start internet marketing strategies or improve their current efforts.
Importance of Business Ethics from a Marketer’s Perspective
Building a business is more than just making money. In this post, we will be reviewing the importance of business ethics as it relates to treating your customers fairly with total transparency.
A long-term thinking business knows that building a positive brand image is crucial to success and growth. Some industries understand this much better than others. Top companies, such as Amazon.com, have disrupted the norm to be transparent and overly “fair” to their customers. Amazon understands that surpassing customer expectations can go a long way to build brand loyalty. Their A to Z guarantee is a great example of what other industries need to take note of, specifically, service heavy businesses. Think of a time in your life a company employee told you, “that’s just not our policy” or “in section 7e on page 295 of our disclosure, it clearly states…” Companies that mention anything remotely close to these responses clearly have a disconnect with their customer’s expectations. Just because something a company does is legal, does not make it ethical. When it comes to a company’s brand reputation, these outdated practices can cause serious harm.
Now that companies like Amazon have changed the game, great service means much more than picking up your phone and answering your emails. It means being truthful, being ethical, going above and beyond, and biting the proverbial bullet to rectify a situation when your customers are unsatisfied. From a marketer’s perspective, there are 3 things companies can be doing to highlight the importance of business ethics to improve their brand perception:
1. Offer Total Transparency
One industry that is notorious for having confusing terms and conditions are financial institutions. I am by no means advocating that a company eliminates their terms of service. What I am advocating for as a marketer is less jargon that is intentionally written to confuse. I am even more strongly advocating for companies to overlook petty fee structures and “rules” that anger their customers and tarnish their brands long-term. If an industry does rely on fees, such as financial institutions, they should go above and beyond to be transparent.
I most recently encountered a situation with Chase Bank. I had a savings account with rules that if my account value fell below the required amount (disclosed in the massively long disclosure when I opened the account), I would incur a monthly $20.00 fee. After not checking my savings account for 12 months, I noticed that this bank had taken $240.00. I was beyond infuriated. Customer service only offered to refund 4 months of the fees. Legally, this bank followed the law as they have disclosed their fee schedules to me. Technically, it was my fault for not remembering their account limits I had seen 2 years previously. But ethically, I feel that they missed the mark. This bank never sent me notifications (which they should have as soon as my account went below their required amount), and allowed 12 months of fees to accumulate until I noticed. Not only have I protested privately, but I have started to speak poorly about this brand to family and friends and am contemplating removing personal and business relationships I have with this bank.
Negative public reviews are even more detrimental for a brand. According to YouGov, 78 percent of consumers in the United States read reviews before making a purchase decision. Reinforcing this point, YouGov goes on to say that 87 percent of consumers trust online reviews as much as they trust friends and family. With enough negative experiences from enough people, a brand’s perception can take a massive hit which can directly impact their bottom line in a big way.
Even if your brand is technically following the law, practicing sneaky behavior to gain a few bucks is a short-term thinking strategy that will severely backfire if your brand’s policies are not radically changed.
2. Have a “Make it Right” Mentality
One of most famous company examples of “make it right” is Ritz Carlton’s $2000.00 rule. The Ritz Carlton Leadership Center notes: “At The Ritz-Carlton, everyone has $2,000/day per guest to make it right or delight, but the money is symbolic. No one is walking around with $2,000 in his or her pocket. However, from day one at your job, you’re encouraged and empowered to fix or improve a guest’s experience, and you may spend up to $2,000 to do this.”
Ritz Carlton has developed a long-term approach when it comes to building a brand. They are one of the most studied brands in regards to the way they treat their customers. Ritz Carlton understands that they may lose up to $2,000.00 dollars per instance to make it right, but in return they get so much more. Customers of Ritz Carlton often become brand advocates, or die-hard fans that aren’t afraid to let others know how great they are. Losing out on $2,000.00 per instance to make customers happy gives Ritz Carlton life-long customers whom are estimated to spend up to $250,000 each at Ritz-Carlton over their lifetime.
3. Stand by Your Products and Services
Many companies stand by their products and services by offering a warranty. While warranties are certainly a good step in creating brand loyalty, a company should not build their products or services to last only as long as the warranty is in place. While it’s difficult to prove that these companies build their products with the intention to last until the warranty ends (to save money), I think most people have experienced situations like this. I once bought a couch from a large U.S. based furniture company that gave a 1 year warranty. Shortly after the 1 year, my couch started to peel horribly. Is it my fault for purchasing fake leather? Perhaps. But why would this company sell this product? Had they not tested it? Surely this major furniture producer did… While my private pleas to rectify the situation were referred to their “1 year warranty” clause, I (being a marketer of course) went strait to their public Facebook page and posted a picture of the couch. I was immediately contacted, within 1 hour of posting, to rectify the situation. I was offered 70% of the original purchase price. Why did this company ignore me privately but immediately respond to me publicly? Rashmi always talks about how we should act the same privately as we do publicly. It’s a sign of someone’s (in this case, a brand’s) true ethics. This furniture company understood the power of having a positive brand online and what even one negative experience could do to their brand. But it should never have gotten to that point. They lost a potential lifelong customer and also had to perform damage control so that many others would still choose to purchase their products.
Imagine that this furniture company had been Amazon or Ritz Carlton, what would they have done? Amazon would most likely have refunded my purchase in full, and Ritz Carlton would have bought me a more expensive couch. That is how you treat customers, that is how you build a brand with die-hard loyalists.
Now that we see how the best brands deal with customers, it seems pretty silly to see companies practice unethical behaviors to get ahead in the short-term. The internet has exposed unethical company practices and has given power to us purchasers. Great brands that understand the importance of business ethics are breaking through the status quo, it’s only a matter of time before the next Amazon or Ritz Carlton comes along and disrupts another stagnant industry. Final note to all the business owners out there, build a brand that stresses the importance of business ethics and that takes the long-term approach to building brand loyalty. Your future bottom line will thank you.
Rashmi Airan‘s mission is to share the need for ethical vigilance and to inspire you to make good ethical choices in all areas of your life. Rashmi is an ethics speaker and consultant fighting to create a culture of conversation and bring ethical issues in business to light, to promote integrity, to enhance commitment to fiduciary duty, to build ethical leadership, and to shift the paradigm of ethics standards through ethics training.
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Posted by Internet Marketing Company, The Bart Organization.