The Importance Of Business Communication – Definition, Types and Tips

When you hear “business communication,” you might think of formal company-wide announcements and external press releases. While both certainly play a role in business communications, so do more informal options. For example, in-person interactions, instant messages, and social media responses.

Business communication directly impacts your company’s operational efficiency, employee satisfaction (and employee turnover), and external stakeholder satisfaction rates. 

Despite this, many organizations struggle to implement strong communication practices. A recent Harvard Business Review study found that communication barriers lead to delays or failures in project completion (44%), lost sales (25%), and missed goals (31%)*. 

In this article, we’ll help you understand the different types of business communication and their importance. This way, you can create stronger policies, implement new practices, and adopt the right tools to improve employee and customer experiences. 

Key takeaways: 

• Business communication includes both formal and informal communication for internal and external teams.
  
• Effective business communication can directly impact employee experience, company productivity, customer satisfaction, and overall profitability.
  
• Implementing active listening, choosing the right communication channels, and using automation tools like CloudTalk can enhance communication in your business.

What is Business Communication?

Business communication is the exchange of information, messages, and ideas for professional purposes. It includes all forms of communication, including written, verbal, visual, and non-verbal methods, and may be used internally and externally. 

Effective business communication, therefore, is essential to effectively solve problems and coordinate activities. It’s also often critical to maintaining strong professional relationships.

Types of Business Communication

There are many different types of business communication. Let’s review the pros and cons of internal, external, formal, and informal communications in the chart below:

Internal communications

Facilitates teamwork, coordinates projects and activities, and shares essential data.

Pros:

• Improve team collaboration.
• Keep team members on the same page.
• Help prevent information silos.

Cons:

• Requires consistent and ongoing effort.
• May involve multiple platforms like email, Slack, and phone calls, which can be confusing.

External communications

Shares critical data with external stakeholders and customers, communicates with vendors, and builds brand and product awareness.

Pros:

• Keep vendors, customers, and key stakeholders in the loop.

Cons:

• Often requires formal communication methods. 
• May require additional approval or more regulated policies.

Formal Communications

Occurs in predefined channels with official messaging, including emails, internal memos, press releases, and more.

Pros:

• Create official business communications that represent your brand well.

Cons:

• May require approval or compliance with strict internal communication policies.
• Requires pre-approved channels.

Informal Communications

These communications are more casual. They may include direct messages on platforms like Slack, email, and phone.

Pros:

• Communicate quickly and efficiently for faster issue resolution. 
• Take advantage of multiple flexible communication platforms.

Cons:

• May be unreliable and result in miscommunication or misinformation.
• There may be a lack of accountability. 
• Potential exclusion of certain team members (accidental or otherwise).

Benefits of Effective Business Communication

Effective business communication helps keep stakeholders on the same page by providing critical information to all relevant parties. It can offer the following benefits:

• Enhance collaboration: Strong communication makes it easier for team members to collaborate and work together, even when project details or policies change.  

• Improves efficiency: Better communication improves team collaboration. This directly boosts overall efficiency and productivity by avoiding delays caused by potential miscommunication. 

• Boosts employee morale: Transparent and direct communication allows employees to feel respected. Keep team members up-to-date on company policies and your expectations. This can boost employee engagement and morale, which can increase productivity. 

• Supports change management: Mitigate potential miscommunication during change management by clearly explaining any shifts in company processes, project requirements, and policies. You can help employees feel more confident in what’s changing and how it impacts them. 

Tips for Improving Business Communication

There’s a lot to consider regarding business communication skills. These skills include both verbal and nonverbal communication, such as body language. Plus, they vary across various channels like online conferences, instant messaging, and in-person meetings.

Whether you’re a communications director or a contact center manager looking to improve call center performance, these tips can help you improve business communications across your organization.

Be Clear and Concise

Being precise in business communication prevents misunderstandings and saves time and resources. When messages are unclear or ambiguous, it can lead to errors, missed deadlines, confused employees, and frustrated customers. 

Poorly communicated customer service policies, for example, may result in confused agents. Because of this, they might fail to consistently support customers—losing them in the process.

Moreover, precise communication helps maintain professionalism and builds trust in business relationships. When information is communicated clearly, it reduces the need for follow-up questions, prevents confusion, and helps your leaders make better decisions. 

Whether it’s in emails, reports, or meetings, precise communication helps keep your operations running smoothly. 

To create direct and concise communications, organizations can do the following:

• Cut the fluff: Only include critical information in your initial messages; you can always refer your team where they can go for further information if needed. 
  
• Proofread written messages: Look for conflicting or confusing ideas that may cause miscommunication. If you need a project to be finalized by the end of the month, for example, make sure your team is aware that’s the deadline for the final project and not the first draft. 
  
• Have clear agendas: Know the reason behind your communication at all times. Keep an agenda for calls or in-person meetings so you remember all essential points to cover. 

Use Appropriate Channels and Tools

Selecting the right communication channel helps get your message across correctly and efficiently—and it’s important to get it right.

For example, you wouldn’t use a quick text message to share detailed project specifications. Nor would you schedule a whole meeting just to ask a simple yes/no question. 

Different channels work better for different purposes. For example, email is great for keeping records and sharing detailed information. Meanwhile, video conferencing calls work well for discussions that need visual elements or ongoing discussion. And, instant messaging is perfect for urgent questions or quick updates that need prompt responses in real time. 

Using the wrong channel can lead to miscommunication or wasted time. Trying to resolve a sensitive customer complaint through social media might make things worse. Just like giving key performance feedback might get lost over Slack. 

The tools you choose can make a world of difference. Call center technology like CloudTalk offers the following features to support good communication:

• Leverage call center automation to streamline tasks and improve workflows, including internal communication workflows.
  
• Provide scripts to enable customer support Campaigns across phone, email, and social media messaging, improving customer satisfaction rates.
  
• Offer omnichannel functionality, allowing agents to offer continual support (and consistent problem-solving for customer complaints) across multiple digital communication channels.

Utilize Active Listening

Active listening involves fully concentrating, understanding, and responding to what someone says during a conversation. This involves more than just passively hearing them. It’s about being completely engaged in the communication process. 

Managers may use active listening to show employees they’re invested in their contributions. Meanwhile, call center agents might use it to empathize with callers and offer personalized solutions. 

Here are some key techniques for effective active listening:

• Give the conversation your full attention, removing any distractions and making eye contact if you’re in person. 
  
• Show you’re listening with brief statements like “Ah, I see,” respond with appropriate facial expressions, and mirror the speaker’s emotions.
  
• Check your understanding by asking for clarity when needed and summarizing the speaker’s ideas or concerns. 

Encourage Open Dialogue and Feedback

Clear communication around expectations and company policies is essential to increased engagement. However, facilitating open dialogue and direct feedback also plays an important part too.

Creating a work environment that supports transparent dialogue and continuous feedback can help build trust, innovation, and overall productivity. 

You can facilitate open dialogue and feedback by doing the following:

• Create a safe environment: Establish a company culture where employees at all levels feel comfortable sharing ideas and information. Especially without fearing either judgment or retaliation. Encourage and acknowledge all contributions, including different viewpoints, and respond constructively.

• Have regular feedback-sharing opportunities: For instance, private employee reviews, biannual anonymous employee surveys, and regular team performance reviews. 

• Carefully select your team communication channels: Some constructive criticism may be better received on a private call instead of in an email blast to the entire team. That said, positive feedback and shoutouts can be widely shared to motivate team members. 

• Lead by example: Leaders should openly share their thoughts and actively seek feedback from others. When you demonstrate vulnerability and openness to feedback, it encourages others to do the same. Be transparent about mistakes and learning opportunities, and regularly share information regarding updates on projects and decision-making.

Tailor Communication Styles

Businesses need to adapt their communication style based on whether they’re talking to customers, employees, stakeholders, or other businesses. 

For example, when communicating with customers, businesses might use a more friendly and approachable tone, focusing on benefits and solutions while avoiding technical jargon.

On the other hand, when communicating with stakeholders or investors, they might use a more formal, data-driven approach. This might include detailed analysis and industry-specific terminology. Finally, managers may focus on direct but encouraging feedback when working with employees to enhance agent engagement.

The key is understanding what matters most to each audience and adjusting accordingly. The following strategies can help you do this:

• Use Sentiment Analysis and Speech Analytics data to understand how internal and external stakeholders feel about specific conversations. Then, identify any potential improvements. 
  
• Consider what type of communication and tone will best get your point across and resonate most with the audience you’re trying to reach.
  
• Test different communication methods, tones, and styles to see what each audience segment responds to best.

Improve Key Business Metrics With Business Communication Practices

Over 40% of employees claim poor business communication reduces trust in leadership and their team. However, strong business communications can strengthen the employee experience, support business growth, and improve the customer experience. 

Done right, you can avoid costly communication mistakes—impacting everything from project management to stakeholder approval. 

The proper strategies and tools are essential to improve your organization’s communication. Make sure you’re choosing software that offers cross-platform functionality and agent-friendly automation to streamline workflows. This can help you support both internal and external communication at all levels. 

For example, if you’re partnering with CloudTalk, you can take advantage of advanced Analytics to track engagement. With features like Talk-Listen Ratio and Sentiment Analysis, you can understand how customers feel about interacting with your brand. Call scripts can also help you implement external communication policies consistently, creating a stronger customer experience.

Sources

*Why Overhauling Internal Communications Could Be Your Greatest Revenue-Driver, 2023