Every business wants to be seen to be ethical in practice, but often things happen in the background which fall under the radar meaning the claim of being ethical isn’t actually fully true.
Why does this happen? Because the attention on business ethics often slips when the realities of running and maintaining a successful business set in. The issue is that failing to pay true attention to ethical conduct actually harms a business. Right now, with more eyes on businesses and their values than ever before, it’s vital businesses increase the level of attention they pay to ethics.
What are business ethics?
Business ethics, put simply, relate to the way businesses and their people conduct themselves and the values they hold which dictate how they operate. Business ethics go beyond what is legally required of a business by the law and is led by values that determine behaviours. Imagine having a code of conduct within your business that lays out the rules for how you do everything with how you want people to feel and think about you: that is business ethics.
Why are business ethics important?
Truly ethical businesses take everything into consideration, from how they treat employees, rules of engagement with current and potential clients, and even where they source their supplies from.
Having a code of ethics in business will help everyone in the business maintain an acceptable standard of behaviour both internally and externally. They give clear direction to everyone involved in the business on how and why your business does what it does.
If you want to know why business ethics is important, imagine a scenario where a business doesn’t have any ethics in place. What do you think that would look like? You can guarantee a business like that wouldn’t have the best reputation amongst both customers and employees – and the wider public.
It’s your reputation
Putting a focus on ethics within your business can significantly increase its reputation, both internally and externally. When you continually treat people who make contact with the business with respect, those people are more likely to continue to support your business, being happy with the service they receive.
Furthermore, being a business known for its ethics can help retain customers. Opentext found that 89% of people plan to buy from companies that make it clear they have ethical sourcing strategies in place. On top of that, 53% of people said they would no longer buy from a company that was accused of working with unethical suppliers.
From an investment perspective, when businesses go that extra mile to ensure they are operating ethically, and are mindful of their practices, investors are much more favourable, which is obviously beneficial to the business itself. With this in mind, you can begin to see that paying attention to your business ethics is not only morally correct but is in fact financially beneficial.
So where do businesses fall foul?
One of the biggest areas where businesses fall foul of acting ethically is in sales. It’s no secret that salespeople are stigmatised and often wrongly the most unpopular people in the business world, but they don’t have to be. With the right support through sales coaching, they can become ethical sellers and not the hungry machines the public often perceives them to be.
The issue comes, however, when pressure is sent down from above to bump up sales. Salespeople aren’t given the amount of time needed to act ethically. This means that the entire relationship with the customer has been built on them being an additional revenue source over being a valued customer.
Where to focus your attention
As we’ve established, ethical business practices come from the foundations which are set by those at the top. Ethical leadership therefore should always be a priority, that way you are leading by example and inspiring all teams to follow suit.
Retaining talent is a huge barrier for businesses right now. The pandemic triggered ‘The Great Resignation’ but there’s also the ever-increasing competition between employers battling for the same talent pool.
But guess what? Ethics is in fact one thing that sets a company aside from its competitors, which is not only great for reputation as we’ve discussed but actually in terms of attracting and retaining talent.
Treating your employees with the respect they deserve, not only makes them feel valued in their role but helps to boost morale. Having a team that feels part of something can directly impact your business too, because do you know who your best advocates are? Your employees. But ethics doesn’t just mean being kind to your employees. It comes from understanding their role, the challenges they face and the amount of time needed to do a good job.
Furthermore, it also means setting an example as a leader. If employees see those at the top acting unethically time and time again, why should they feel compelled to do anything differently? Having clear rules of engagement, company policies and behavioural guides are great, but if others are allowed to not follow them, they will become meaningless.
Top tip? Live and breathe your own business policies even at the top.
Ethical sales processes
A lot of focus in business is placed on the customer journey, and quite rightly too. The issue is that many forget to focus on the interactional aspect of the customer journey – where the customer first comes into contact with a sales professional. This is unfortunately why many sales professionals have been tarnished with the same brush – as pushy or aggressive. It doesn’t have to be that way though. Being ethical during the sales process and continuing that beyond the sales funnel can ensure customer relationships are built with the right foundations.
What does an ethical sales process look like?
Ethical sales first come down to the relationship you begin to build with a prospect. From the very first moment you engage with a prospect, you should be aiming to demonstrate you fully understand and are concerned with their needs, and use accurate information to try to help them find a solution. Yes, that solution could be your service or product, but do not force this on them purely for a sale if you know that you are not the right company for that prospect. Misleading them at this stage could result in a short term sale, but an unhappy customer, which is damaging for your business.
Ethical sales processes should also incorporate the need to qualify prospects who don’t meet your target market or who don’t meet your values as a business. Too often salespeople and businesses take on clients who are not aligned, simply because they are focused on revenue. The fundamental thing to remember when implementing ethical sales practices is to define the behaviours which will ensure every customer, lead or prospect is treated fairly, with respect and integrity.
As business owners, we form partnerships with multiple people, from stakeholders to service providers, and even suppliers. But, when forming these partnerships, it can be easy to lose sight of our own values, especially if it comes down to cost. The thing is, this can be damaging not only from a reputational perspective, but also from a service perspective – in relation to the service you provide to your customers.
When choosing your partners, it’s therefore imperative that you ensure there is an alignment in your values and the ways in which you do business.
Customer service is crucial to building a loyal customer base. Many firms fall short when it comes to maintaining loyalty from their customers after the initial sale. The truth is, there should be no less effort put into the relationship with the customer than is put in during the sales processes. If the relationship with the customer is built on false promises and pretence, it will not only result in an unsatisfactory service but also could ruin your reputation. Others won’t believe what you put online or what you say about your own firm as word of mouth – real experiences from real customers – always prevails.
As we face an era of rising energy prices, fuel prices and the general cost of living, more eyes are on pricing than ever before. But, just because many prices are rising, doesn’t mean to say it’s an opportunity to set the prices of your products or services ridiculously high. Yes, margins need to be considered, but so does the end customer. Being ethical with your pricing means understanding the value of your service or product, looking at the overall cost to produce the product or deliver the service and the ethical amount of profit that can be built into your margins. Taking the current situation as an opportunity to hike prices when it’s not needed is not only unethical but will also signal to existing customers that you haven’t understood the challenges they are facing too.
Ethics should underpin every aspect of a business. And it is truly within your interest to ensure your ethics policies are clearly outlined for all to see and adhere to. Ethics should play a part in every consideration and decision your business makes, so much so that it becomes an unconscious practice.
Being an ethical business means you are playing your part correctly in the world. But with the added benefits of customer loyalty, employee retention and limited risk, it’s also a major contributor to the success of your company.