One easy way to improve customer experience (and potentially increase your profit margin)
It’s all down to operational transparency.
What is operational transparency?
Operational transparency is a curated window into the behind-the-scenes production of a product or service. It works both in the business and out — it can improve understanding and heighten appreciation for customers, and it can also help employees feel their work is meaningful and appreciated[1].
The digital revolution has presented a number of challenges to operational transparency, with the automation of previously manual processes making some transactions immediately less visible. An oft-quoted example is the introduction of ATMs; ATMs were less expensive, more efficient and more accessible than having a bank teller manually access the account and draw the cash for the customer — but they had a downside. When customers use ATMs more and tellers less, their satisfaction decreases. There’s a very simple reason:
“It turns out that when consumers can’t see the work that’s being done to serve them, their perception is that less effort went into delivering the service, so they don’t appreciate or value it as much.”
Ryan W. Buell, Harvard Business Review[2]
But whilst digital may have brought significant gains in efficiency and cost-reduction, in some areas it has also created a disconnect between service and consumer. In many instances — such as online grocery shopping or booking appointments — people are no longer able to literally ‘see’ (or hear) the process behind the delivered output. And this disconnection of customers can have a detrimental impact on their value perception, whereas when they have visibility of the processes involved in a product/service, they value it more. Studies show that with operational transparency implemented, users may also be more likely to convert, perceive the product/service as higher quality and be more likely to re-engage at a later date[3].
Operational transparency can be applied to many transactional events, including those which are non-commercial; research has shown that transparent interactions can also increase trust and engagement with Government services[4]. A 2020 study looked at the utilisation of a service request app by the residents of Boston, Massacheusetts; the app was designed for residents to submit simple service requests — such as road potholes or broken streetlamps. When the follow-up progress of these service requests was made visible to the user, people were more likely to submit further requests. They were also 14% more trusting and 12% more supportive of the government. The increased visibility via the app increased the perception of effort by the government, and also increased the perception that engaging with the government is an impactful endeavour — the digitalised responsiveness creates feelings of personal efficacy, and boosts willingness to engage further.
Examples of everyday operational transparency
Wagamama
The British restaurant chain Wagamama is an excellent example of a company creating non-digital operational transparency. With an emphasis on fast, fresh, and authentic food, this concept is presented to the customer very literally; the restaurants are designed so that diners can see the chefs preparing their order. In many restaurants, the kitchens are long open channels that reinforce the key brand messaging (fast, fresh, authentic). They are not the focal point, but they are not subtle enough to be ignored either.
This concept was echoed in a 2012 study looking at one of the dining halls at Harvard, where the kitchen is closed off from the diners. After installing iPads with video-conferencing software, customer satisfaction with their food rose 14%. Interestingly, chef satisfaction also increased (by 22%) and they worked 19% faster, as they felt more appreciated and could see the impact of their work[2].
Etsy
Etsy is a global marketplace specialising in selling handcrafted and vintage items from independent creators. Whilst their social media feed predominantly showcases aesthetically pleasing finished products, the Etsy Seller Handbook specifically encourages Etsy sellers to ‘tell the story of your brand’ on social media. This includes sharing behind-the-scenes content or meet-the-maker posts — including ‘shots of your work, your process, and your workspace’. There’s a clear emphasis on the value of transparency for handcrafted businesses; that the target audience are proactively interested in the process behind the products. There’s a clear logic attached to the value; the user may be more invested in quality validation when purchasing a £30 hand-crafted vase from Etsy, versus buying a £3 mass-produced vase from a multi-corporate.
Compare the Market
Compare the market is a UK price comparison website, which primarily compares the cost of consumer insurance products. The site has one clear goal — to help users find the cheapest insurance product, by presenting a comprehensive list of deals utilising their details and requirements. It’s driving force is stated in its name; it compares the market. The whole nine yards.
And it has one clever UX trick up its sleeve, which reinforces this to the user.
Once you’ve submitted your information and requirements, you have a nice shiny ‘compare quotes’ button. But the quotes don’t load instantly — instead, you’re forced to wait whilst the APIs seek out available deals. And whilst the machine ‘thinks’, the user is presented with a progress bar with implied live updates — 1 product found, 8 products found, 60 products found — before the matrix of results is presented. It’s only a couple of seconds delay, but it’s a small (if somewhat contrived) glimpse into the cogs in motion.
Beauty Pie
And there’s also Beauty Pie — a UK brand hailed as a beauty industry disruptor. A subscription-driven member’s club, their model selling luxury skincare and beauty products without the luxury mark-up. But their USP is rooted in operational transparency. A great example is how they price their products; it’s incredibly dynamic — for a face cream, Batch A might be £5 per unit, but then Batch B might be £7 for the same product because the raw material cost skyrocketed. A similar study by Mohan, John and Buell showed that showing the production cost actually increased sales by 26%. The narrative included highlighting that the mark-up was 1.9x versus the 6x mark-up charged by competitor; the production costs were similar, but the retail prices varied massively. Cost transparency enabled the brand to communicate this effectively, and consumers were accepting of paying $115 when competitors were charging $300+ for similar quality goods[2].
Being open and transparent can have its downsides, and this is most evident on Beauty Pie’s social media. Their owned Facebook group contains a plethora of posts from disgruntled shoppers who are disappointed in the brand (delayed stock shipments, cost increases, expensive shipping). The brand is an excellent example of the potential revolution operational transparency can bring to consumers, but also of its ability to be a double-edged sword. Operational transparency should always enhance your brand narrative; but when your brand narrative is reliant on transparency it can complicate things. Consumers may grow distrustful of recurring price increases or perceive messaging as overstated.
However you approach introducing transparency to your business, it’s important to remember that everyone’s a critic — and that only intensifies when you replace your operational window with a magnifying glass.
Originally published on psykkd.com
