Effective communication is imperative, not just for businesses but for the whole human ecosystem. For business, however, it holds a special place as the one which succeeds in communicating what it has to offer in the most appealing way wins the race.
However, communication is a two-sided process and it isn’t limited to business and its customers. A business has to work on its communication with other parties like employees, partners, Government, etc. in order to sustain in the long run.
Here’s a guide explaining the importance of communication in business.
Importance Of Communication In Business
Business communication can be divided into internal and external communication, both of which are equally important. A business should be able to clearly explain it’s offering, the company policies, and other terms to the customers, clients, employees, and other parties it deals with.
It is crucial to communicate effectively at the time of negotiations to achieve short-term and long-term goals.
Importance of External Communication
External communication is the exchange of information between a business and another person or entity in a company’s external environment. These include customers, potential customers, investors, suppliers, etc.
Communication drives business and marketing strategies. The business builds its brand and sells the offering by communicating its stance. Effective external communication is important as it helps to-
- Get The Investment: Effective communication is required between startups and investors to help the company raise money for its products. It needs to convey its value proposition, objectives, and current and future stance properly in its pitch deck to appeal the investors and get the funding they want.
- Build The Brand: A brand differentiates the company from other companies selling the same generic product. Effective communication is important to convey the brand message and establish the desired brand positioning in order for a company to stand out in the market.
- Sell The Offering: Selling without communication isn’t possible. Both written (labels) and verbal (advertisements) communications are important to convey the intricacies of the offering and sell it to the customers.
- Prevent Conflicts: Good communication and declaration of all the terms and conditions between the company and its partners, and the company and its customers prevent conflicts to a large extent.
- Build Relations: Customer relationship management thrives on effective communication. Listening to the customers, answering their doubts, and providing the services they want before, during, and after sales build relationships between the two parties.
- Promote The Brand And Offering: Brand promotion requires the company to convey the product features, value proposition, and the offers in a way that the target market understands it clearly.
- Collect Feedback And Grow: When the brand listens to the suppliers’, investors’, customers’ and other external audience’s grievance and collect feedback, it grows much faster than those brands which don’t.
Importance of Internal Communication
Internal communication is as important as external communication. It aligns the goals and expectations of the internal audience (employees, partners, etc.) with that of the organisation. Effective internal communication is important as it helps to –
- Improve Relationships: Good employer-employee communication improves the relationship between the two as both get to understand the expectations and goals of the other party. Similarly, good communication among the partners/shareholders improves their relationships as well.
- Enforce Rules: The company can’t enforce the rules without conveying them to the employees and the internal audience. Communication is necessary to let them understand what the company wants from them and how it wants it to be done.
- Enhance innovation: A good two-way communication enhances the innovation within the company as the superiors get to communicate and listen to employees’ new ideas and give them feedback on the same. This motivates them as they feel more like a part of the company.
- Avoid Conflicts: When everyone communicates their problems and demands, it becomes easier to avoid conflicts and work in a more peaceful way.
- Increases Employee Satisfaction: Good internal communication has a psychological effect on the employees as their voices are heard and they get to give their feedback on certain issues. This motivates them to perform in a more efficient way.
- Align The Goals: Effective communication also helps in aligning the goals of the employees with the goals of the organisation.
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A startup consultant, dreamer, traveller, and philomath. Aashish has worked with over a 50 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.