Ethical Dilemmas in Business: A Guide for Customer Success Teams

As a customer success manager, have you encountered any ethical dilemmas? If yes, this blog is specifically for you as we have provided details on how to manage your team effectively in such situations.

Ethical Dilemmas
Ethical Dilemmas

As the amount of demand and the immense competition continues to increase exponentially in our current business landscape, all modern businesses must prioritize avoiding moral and ethical dilemmas during day-to-day business operations. Detailed and established ethical standards can help your business significantly increase credibility and reliability amongst existing and potential customers by establishing credibility and trust.

Recent studies have shown that 73% of customers would be willing to pay higher prices for products and services from companies that operate with transparency. Therefore, the lifetime value of a recurring customer should be considered over obtaining new prospective leads and immediate revenue using unethical operational strategies.

Although various unethical business strategies may be able to help your business increase revenue in the short term, they can often result in loss of profitability in the long run due to loss of trust and credibility. Therefore, businesses must understand and avoid various moral and ethical dilemmas that may potentially affect customer success and organizational productivity.

What Is An Ethical Dilemma?

An ethical dilemma in the workplace is defined as a decision-making situation where employees or stakeholders are provided with various options that may violate industry or organizational moral and ethical standards.

Although navigating certain ethical dilemmas during day-to-day business operations can be extremely difficult, your business must have clearly established rules and regulations to ensure as much transparency and visibility as possible. Ethical operational standards can not only help ensure that your business is following legal regulations set by regulatory bodies but can also strengthen customer relationships and trust.

Ethical Dilemma Examples In Business That Customer Success Teams Should Avoid:

1. Overselling To Prospective Leads

Customer success teams may often be tempted to ignore customer preferences and specifications in favor of advertising and selling their organization’s most profitable products and services. While this may seem to improve organizational profitability in the short term, it is not only an ethical dilemma but can also lead to the loss of prospective customers in the long run. It is much more profitable for modern businesses to retain recurring customers over longer periods of time than to gain new leads.

Recent studies have shown that existing customers spend up to 67% more on average than new customers. Although convincing new leads to purchase products and services that do not necessarily serve their needs may seem more profitable to customer success teams attempting to increase immediate revenue, it may significantly reduce customer retention rates and consequent lifetime customer value as their key requirements are ultimately not being met.

Therefore, customer success teams should consciously keep lifetime customer value as well as the long-term benefits of satisfied customers in mind when attempting to market and sell their organization’s products and services.

2. Prioritizing Revenue Over Customer Experiences

Customer satisfaction can be one of the most valuable resources for customer success teams. While steadily increasing organizational profitability is favorable and essential for long-term survival in our current business landscape, customer success teams must ensure immediate revenue is not prioritized over customer experiences.

Although advertising your organization’s products and services is an extremely important aspect of any successful business, customer success teams should prioritize maintaining customer relationships, building trust, and improving customer experiences as a whole. Recent studies have shown that companies  prioritizing customer experiences can generate up to 60% higher profits. Therefore, to avoid ethical dilemmas related to prioritizing revenue volume, customer success teams should prioritize customer experiences.

Improved customer experiences may ultimately generate even more revenue in the long-term than prioritizing immediate revenue generation.

3. Deceptive and Inaccurate Marketing Strategies

One of the biggest types of ethical dilemmas that most modern businesses face is developing transparent but effective marketing strategies. Customer success teams may feel pressured to falsely advertise products and services to make them seem more attractive to a potential customer. However, although deceptive marketing strategies may convince customers to make one-time purchases, your business may not be able to obtain recurring consumers.

Therefore, by honestly advertising your business’s products and services, you will be able to increase customer retention and create trust significantly. Without a certain level of transparency in your business’s marketing strategies, your business may lose credibility and reliability,  affecting existing and prospective leads.

This will not only help significantly improve customer relationships but also increase the lifetime value of each individual customer. Studies have shown that  it is 14 times easier to sell to an existing customer than to a prospective lead through customer success efforts.

4. Ambiguous and Unclear Auto-Renewal Clauses

As digital technology and enterprise applications continue to evolve at an exponential rate, many modern businesses may find it easier and more efficient to implement subscription-based auto-renewal billing processes. However, it is extremely crucial to ensure transparency and visibility through each step of the auto-renewal process.

Many customer success teams may implement ambiguous and uncertain auto-renewal billing processes to ensure that first-time customers are unaware of when certain products and services renew, increasing revenue in the short term. However, although this may increase immediate sales and revenue volume, customers may develop a certain amount of distrust towards your products and services if they feel that they did not obtain the corresponding value.

Therefore, it is important to ensure that your business appropriately informs customers of when subscriptions end and the terms and agreements of the renewal process. Instead, your business should prioritize regular communication with consumers and consistently attempt to showcase the potential value that your products and services can provide. This will enable your business to gain loyal, recurring customers while avoiding various moral and ethical dilemmas.

Avoid Moral And Ethical Dilemmas In The Workplace:

As customer expectations and market trends continue to evolve at an exponential rate, customer success teams may feel immense pressure to increase organizational revenue. However, various ethical dilemmas in business could potentially damage your company’s reputation and credibility.

Modern businesses must avoid the potential of an ethical dilemma in the workplace by ensuring that customer success teams have clearly established standards and regulations for marketing and selling organizational products and services as well as communicating with customers.22

Therefore, the aforementioned step-by-step guide can help your business understand the various types of ethical dilemmas that could potentially negatively affect customer relationships, as well as how to avoid them.

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