As Facebook founder and CEO Mark Zuckerberg faced a second day of Congressional testimony on data misuse, the controversy lands squarely on the issue of trust--that is, whether users of the popular social media site can trust Facebook. Much of the distrust on display in Congress this week has hinged on confusion over what exactly users are buying into when they sign up for Facebook.

There is a lesson here for small businesses and startups, many of which share an important commonality with Facebook: Whether a firm makes a product or sells a service, it is usually providing expertise that its customers don't have--just as Facebook provides a service using complex technology that even its most avid users can't fully understand.

Therefore, it's every business owner's job to clearly communicate to customers and clients what they are buying. As the Facebook experience shows, that's not always as easy as it sounds. In his testimony, Zuckerberg admitted that "one of the things that we've struggled with over time is to make something that is as simple as possible so people can understand it."

Most businesses face the same struggle, especially if their core benefits are built on complex technology, sophisticated processes or professional expertise. Like Facebook, these firms must do the hard work of determining what their customers think is information overload, and what is oversimplification. Striking that balance is key to building and maintaining trust.

Take the example of Truss, a small business that seeks to provide more pricing transparency for people seeking to rent or lease commercial space. To accomplish this successfully, they must have a crystal-clear understanding of how many details the average business owner wants about the true cost of a property. Too much information, and the customer gets overwhelmed. Too little and the customer feels that transparency has not been achieved. 

Ironically, this communication challenge often becomes more acute with long-time customers. Almost by definition, a trusting customer is less likely to focus on every detail. Knowing this, some salespeople or business owners naturally turn their attention to other aspects of the client relationship. This results in a mutual complacency between firms and customers regarding what's being purchased. When that happens, clarity can easily drift into misunderstandings and incorrect assumptions.

Facebook is now suffering from that drift. While the company has not been hiding the nature of its business, it also has not focused enough on making sure that customers feel they fully understand what they are buying. And anyway, what they were buying in 2005 is different from what they are buying now. Some argue that this lack of good communication was intentional--that Facebook would prefer that customers not have clarity about what they are buying.

We may never know Facebook's intentions for sure, but it is not uncommon for any business owner to fear that more transparency will threaten customer relationships. Trumpeting a change in raw materials or privacy policies may prompt customers to become concerned when there is actually little or nothing to worry about. Knowing this, firms may decide to release the information quietly, or not at all.

Whatever the way forward is for Facebook, the key is trust. The company must combat the internal forces of complacency and fear, and must commit to ongoing disclosure of clear information to users and advertisers. Effective communication--especially of technical material--is not just a matter of sitting down with some good writers and posting it in the right font. To communicate effectively, a firm must understand what customers need and want to know, and must rigorously and periodically test communication materials for the desired effects. 

For business owners watching and listening to the Zuckerberg testimony, this is a crucial point to take to heart as they consider whether customers clearly and fully understand their own products or services.

Published on: Apr 12, 2018