Compliance management creates trust

Use compliance management to build trust

Digital whistleblowing systems for the subscription business

by Dr. Thomas Altenbach

Especially in business models with recurring payments, trust is the “bread and butter”. Once customer relationships are destroyed, it is difficult to repair or rebuild this loyalty.

It is therefore crucial that customers, partners, suppliers and their employees trust the subscription-based business model as much as the employees within the company. This vital trust can be strengthened and promoted through a well designed compliance management and a corresponding whistleblower solution.

Creating trust with compliance management

In the exponentially growing subscription market in the DACH region (source in German: billwerk Subscription Industry Report), the business models are often cutting-edge and innovative. A prerequisite for innovation is a transparent culture, a required and encouraged culture for feedback and mistakes (also known as “trial and error”).

Interestingly, the market development shows that it is no longer just the start-ups that are growing the subscription market. Quite the opposite: more and more medium-sized and large enterprises are working on their business models and adapting their strategy with recurring revenues. Understandable, because the pressure from the market to be an innovative company is immense.

All subscription businesses have one thing in common: they live on the assumption that customers will remain loyal for a long time. This requires not only a good product and strong customer relationships, but also loyal employees who are interested in the company growing organically, improving continuously, and maintaining its good reputation.

Compliance in times of crisis

But once the good reputation is ruined…

As we all know, it takes a lot of time and effort to build a good reputation as a company and to gain and keep the trust of your customers. But losing your reputation can happen in seconds. The headlines of corporate scandals that we hear about again and again in the media have not escaped anyone. Companies like Facebook or VW survive such things. But for small and medium-sized companies, it can mean their end. Of course, this is just as true for subscription businesses, or for those in particular. Warren Buffet once rightly pointed this out: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Whistleblower solutions for more protection

Whistleblower systems, the cornerstone of compliance management

Every company has very individual processes and issues where something can potentially go wrong. Depending on the industry, target group and business model, the problems can look very different. This brings us to a very important point: employees naturally know their company very well and every employee can be a whistleblower. But what if this tip does not end up in the press, but first in the company? Then whistleblowers are “pulse meters in the company”. They know exactly where things are going well or where a company may need to make improvements. Irregularities come to light through the use of reporting channels and the company can actively take countermeasures before a reputation-damaging scandal ends up in the press. (German Source: FAZ article from 21.02.2021) For this reason, the core of compliance management in a company is a whistleblower system, which enables whistleblowers to report anonymously and save the company a lot of money. Whistleblowing is an opportunity for companies and employees alike.

At this point, the loop must be brought back to the initial topic of trust and culture, because corresponding tools, such as digital whistleblowing systems, only bear fruit when they are actually used. For this, every company must actively educate about whistleblowing as part of its compliance management, make processes transparent and promote a speak-up culture.

Need for action: the EU whistleblower directive

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