Marketing: Why a Lack of Transparency Will Kill Your Business


Are you counting the money whilst your business is slowing dying?
 

Let me explain, on a recent trip to Spain I went to collect my hire car and was asked whether I wanted to take out the additional insurance to cover damage to tyres and glass, which I declined.

 

I was then told I needed to pay for a full tank of fuel and return the vehicle empty (of fuel).  Not a big surprise as I had hired cars before and expected this.

 

What was the shocker was the charge itself which (with tax) was over 117 Euros for a tank of fuel!  This was more than the original cost of hiring the car for a whole week.

 

Based on previous trips, the figure of 117 Euros was 45% more than I expected to pay.

 

Buyer Beware

Now is this a case of ‘buyer beware?’  Well yes and no.  Yes in that we are all old enough and ugly enough to deal with the harsh realities of commerce and I admit I did shop around online for what I thought was the best deal.

 

However there is a case of providing transparent pricing where clients can make a fair judgement on what they are prepared to pay.  Remember, I was offered additional insurance which I declined which meant I had to face the consequences if I damaged the wheels or glass. 

 

This fuel charge could be described as extortion as you have no option but to pay it.  As a result you are left with a feeling of being taken advantage of.  This is made worse when you are provided a car which has a missing hub cap and damaged paintwork!

 

You could argue that ‘that’s just the way it is’.  Of course I expected to pay for fuel although I did not expect this amount to be hiked up by 45%.

 

A Better Customer Experience

Apathy as well as well as infrequent purchase often results in organisations ‘getting away with it’.

 

However these customers will stop responding to your offers and look elsewhere without letting you know why – which is dangerous for any business and can prove fatal.  As you rely solely on ‘acquiring new customers’ to sustain your business your cost of sales will remain higher than they need to be.

 

So a message for any business which aims to generate incremental revenue with back loaded costs, just because you have got away with it in the past, don’t assume you will again.

 

Being transparent will highlight the real cost of your goods and services, which may not sit well when promoting ‘headline’ rates.  But the customer experience will be better for it.

 

In a highly competitive market, transparency might not only help avoid a slow death, but prove to be a real differentiator.  Now how’s that for a thought? 

Posted by: Nimish Sawjani on Oct 17, 2012
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