Most start-ups and tech companies know that they need feedback to optimise their processes and understand their customers. Yet most miss that they can take this one step further to secure significant returns at low cost.
Giving customers feedback on processes and progress - called operational transparency - results in significant gains. This can be easily achieved using data already at the fingertips of tech companies.
Give certainty to your customer
Not everyone likes Jeff Bezos. According to one poll, he has a net favourability score of +29 points. Not bad if you compare it to President Biden (-7+) but trailing Apple’s Tim Cook (+41) and Microsoft’s Satya Nadella (+41).
Yet people love Amazon. Its net favorability rating is +70 - the highest of any of the big tech firms by some 15 points. What helps explain this difference?
One reason is Amazon is the market leader in what behavioral scientists call operational transparency.
You don’t trust Jeff Bezos but you do trust Amazon’s ability to deliver you what you want, on time. The reason for this is simple - they tell you. At each interaction with Amazon, from check-out to delivery, they update you on the progress of your order.
Take the London Underground - the British capital’s public transport network. They have a simple way of improving customer satisfaction without making the trains run any better. As Rory Sutherland explores, Transport for London collects live train data so they can manage their network - handling accidents, directing trains, managing peaks. They could keep this data to themselves and use it to improve efficiency from their control room.
That is not what they do.
Instead, they distribute this data to their users. Each station has a board letting customers know how soon the next train will arrive. This transparency creates certainty for the user - letting them know how long they will wait. No-one likes waiting, but you like waiting the least when you have no idea just how long it will be.
In technology, there are many examples of companies increasing trust by providing transparency to their customers. Today, this occurs particularly in products that straddle both real world and digital (such as Uber or Deliveroo) or anything that has a wait time (such as Ticketmaster).
The work of researchers Ryan Buell, Leslie John, and Bhavya Mohan shows the power of operational transparency. They sold wallets with a breakdown of their costs ($14.68 for raw materials, $38.56 for construction, and so on) as well as the size of their mark-up. Sales of these wallets were 26% higher compared to when no costs were shared. No improvement to quality or any other aspect was made to the wallet. They simply provided users with transparent information on their goods.
Too many companies have assumed the old adage “no-one wants to see how the sausage is made”. In fact, that is exactly what people want to see. When they understand the process behind a product they trust it more and become more engaged.
You are probably underrating transparency
Technology companies can spend millions and months creating incremental improvements when introducing operational transparency could achieve a similar pay-off in less time, for less money. For instance, imagine as a user if you received:
Clear information on processes and progress for customer support - rather than the murky wait times and processes of many complaint and support experiences
Personal feedback from Google Maps on how long it takes you to travel places compared to an overall average
Feedback and transparency about the interview and hiring process for a new role as you progress through each round
Listed data and feedback on sources and reader demographics at the end of a news article
Transparency is a powerful mechanism to drive engagement from users and operational efficiency. Generally, operational feedback is underused by businesses - even in tech. So get started with some small experiments. Consider where you have data today that you can easily expose to a customer to show where they are in your processes and what you are working on in the background. You’ll likely find you see large gains in satisfaction for low cost.
Let me know how it goes!