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What Is the Relationship between Business Ethics and Customer Relations?

Esther Ejim
Esther Ejim

Navigating the intersection of business ethics and customer relations is crucial for modern enterprises. A study by the Ethics & Compliance Initiative (ECI) found that companies with strong ethical cultures have 40% fewer misconduct incidents, highlighting the tangible impact of ethics on operations.

Furthermore, according to a 2020 PwC survey, 73% of consumers point to customer experience as an important factor in their purchasing decisions, underscoring the importance of ethical customer relations . These data points illustrate that the principles of business ethics directly influence customer satisfaction and loyalty, shaping the way products and services are delivered and how customer feedback is managed. By prioritizing ethical practices, businesses not only foster trust but also drive sustainable growth.

Business ethics and customer relations applies to the way that a business conveys its products and deals with customer complaints.
Business ethics and customer relations applies to the way that a business conveys its products and deals with customer complaints.

An example of the relationship between business ethics and customer relations is a situation where a company falsely represents its products or services to its customers. A company that specializes in bakery products may advertise that its muffins contains blueberries without letting customers know that the blueberries in the muffin are synthetically created to simulate the real fruit. This type of unethical consideration when dealing with customers also applies to orange juice makers that advertise their orange juice as “fresh,” without explaining to customers that the juice had been extracted from the orange and preserved under special conditions for almost a year. The implication here is that the oranges may have been squeezed when they were still fresh, but the process of storing the juice for so long makes their claims of freshness highly unethical. This is especially true when customers buy the product believing that the oranges had just been squeezed within that week or month.

Businesses should be ethical when dealing with customers.
Businesses should be ethical when dealing with customers.

Another instance of the link between business ethics and customer relations can be seen in the way in which the company treats any complaint from the consumers. A customer may notice a wet spot on the floor in a store and tell an employee about this condition, expecting the complaint to be investigated. If the store does nothing and a customer slips and falls on the wet spot, this might lead to the initiation of a lawsuit on the part of the injured customer.

A company that claims its orange juice is fresh, even though it's been preserved, is jeoparizing both its ethics and its customer relations by misrepresenting the product.
A company that claims its orange juice is fresh, even though it's been preserved, is jeoparizing both its ethics and its customer relations by misrepresenting the product.

The issue of dishonesty toward customers in the quest to make as much money as possible is one of the more common factors of the relationship between business ethics and customer relation. For instance, in the United States, every year, after the Thanksgiving holiday, there is a day known as Black Friday when stores compete with each other to slash the prices of goods and services. On that day, a television that would normally sell for $1,200 US Dollars (USD) might be sold for $500 USD. What the various manufacturers and marketers fail to tell their customers is that such items have been specially made for this particular period and that they are inferior to the expensive ones, even if they look the same on the outside.

FAQ on Business Ethics and Customer Relations

How do business ethics impact customer relations?

Business ethics are sometimes tested when stores compete for post-Thanksgiving shoppers on Black Friday.
Business ethics are sometimes tested when stores compete for post-Thanksgiving shoppers on Black Friday.

Business ethics significantly impact customer relations by building trust and loyalty. Ethical practices, such as transparency, accountability, and fairness, contribute to a positive brand image and customer satisfaction. According to a survey by Label Insight, up to 94% of consumers are likely to be loyal to a brand that offers complete transparency. This trust can lead to repeat business and customer referrals, which are vital for long-term success.

Can a company's ethical stance influence customer purchasing decisions?

Stores often compete against each other through discounts and price slashing.
Stores often compete against each other through discounts and price slashing.

Yes, a company's ethical stance can greatly influence customer purchasing decisions. Consumers are increasingly aware of and concerned about ethical issues. A 2020 report by Capgemini Research Institute found that 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact. Ethical business practices can attract customers who prioritize these values, potentially increasing market share and profitability.

What are the risks of neglecting business ethics in customer relations?

Neglecting business ethics in customer relations can lead to a range of risks, including damage to reputation, loss of customer trust, and legal consequences. Unethical behavior can result in negative publicity, which can quickly spread through social media and other channels. This can lead to customer churn and decreased sales. Moreover, unethical practices can attract regulatory scrutiny and fines, as seen with the Volkswagen emissions scandal, which cost the company over $30 billion in fines and settlements.

How can a business improve its customer relations through ethical practices?

A business can improve its customer relations through ethical practices by consistently demonstrating integrity, engaging in fair trade, respecting customer privacy, and responding to customer feedback with honesty and empathy. Implementing corporate social responsibility (CSR) initiatives that align with customer values can also enhance relations. For instance, companies like Patagonia have built strong customer loyalty through their commitment to environmental sustainability and ethical supply chains.

Are there any certifications or standards that help businesses maintain ethical customer relations?

There are certifications and standards that help businesses maintain ethical customer relations, such as the ISO 26000 standard for social responsibility, which provides guidance on ethical behavior. Additionally, the Better Business Bureau (BBB) accreditation signifies a business's dedication to ethical practices and customer service. Industry-specific certifications, like Fair Trade for consumer goods, also demonstrate a commitment to ethical practices in customer relations.

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Discussion Comments

burcinc

Those who like shopping at clothing retailers on Black Friday, I urge you to go to the same store one week or two weeks before. You will discover that many times, the prices are lower before Black Friday arrives. Or sometimes, the prices are the same, they just change the tags to make it look like it's on discount.

donasmrs

@serenesurface-- Customers do react when there is false advertising, the least they do is stop buying the product. And there can't be a better reaction than that.

Positive customer relations is a huge factor. I know people who will buy something even if it's not that great because they like the business and their customer relations. I also know people who will not buy something regardless of how great it is because they hate the customer relations of that business. So businesses need to think twice about this issue. Ethics is more important to consumers than some businesses realize.

serenesurface

If false advertising is unethical, then almost all businesses are unethical when it comes to customer relations. False advertising is very common. For example, right now, businesses can label their products "natural" even if they're not natural. There is no supervision of this term on labels, so almost everyone uses it now. If one checks the ingredients list of these products or calls up the manufacturer to find out about how the ingredients are processed, one will realize that it's far from being natural.

Although false advertising upsets us consumers, we are getting more used to it and many of us don't really do anything about it.

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    • Business ethics and customer relations applies to the way that a business conveys its products and deals with customer complaints.
      By: Andres Rodriguez
      Business ethics and customer relations applies to the way that a business conveys its products and deals with customer complaints.
    • Businesses should be ethical when dealing with customers.
      By: Syda Productions
      Businesses should be ethical when dealing with customers.
    • A company that claims its orange juice is fresh, even though it's been preserved, is jeoparizing both its ethics and its customer relations by misrepresenting the product.
      By: marcelokrelling
      A company that claims its orange juice is fresh, even though it's been preserved, is jeoparizing both its ethics and its customer relations by misrepresenting the product.
    • Business ethics are sometimes tested when stores compete for post-Thanksgiving shoppers on Black Friday.
      By: gemenacom
      Business ethics are sometimes tested when stores compete for post-Thanksgiving shoppers on Black Friday.
    • Stores often compete against each other through discounts and price slashing.
      By: Bikeworldtravel
      Stores often compete against each other through discounts and price slashing.