The Question of Trust – How Much Business is Done Without it? None!

May 29, 2010 by  Filed under: Marketing 

Trust – the willingness to rely on others under conditions of risk.

Before any business activity will commence, whether an everyday uncomplicated task or initiating a complex ground-breaking relationship, nothing will happen unless there is an acceptable level of Trust in the outcome.

As an example, consider the need to attend a face-to-face meeting interstate with a major client. Without an acceptable level of Trust in the outcome, for starters who will you allow to make your travel bookings? What airline will you choose? Will you even get on the plane, or use the lift in the client’s high-rise head office?

Without Trust in the outcome, nothing will proceed.

Just as you wouldn’t trust confidential information to email, or use internet banking, or talk on your mobile phone, if you had an unacceptable level of Trust in the security in place to protect the outcome.

Therefore, in all communications and relationships with business stakeholders, whether current or proposed, an acceptable level of Trust is a non-negotiable.

No Trust means no progress – no exceptions!

The DNA of Trust.

Before discussing the Trust-building How To’s, it is imperative to understand the components of Trust – the DNA of Trust – as it relates to every relationship, business and personal.

As an example, a Financial Services organization cannot comprehend why their clients rate them so lowly on the Trust scale – ” Our intentions were totally honourable. We have always had our clients’ best interests as our top priority”.

Simultaneously, their clients are becoming increasingly discontent – ” All I’m interested in is how the advice I received has caused my investments balance to deteriorate over the last 12 months”.
At the primary level, Trust is dissected into two distinct components, character and competence.

Within character, lie elements of integrity and intent. Competence covers elements of capabilities and results.

Surrounding the central core of the character and competence components, and their 4 elements, are 16 practised behaviours eg. listen first, talk straight, keep commitments, clarify expectations, provide transparency, show loyalty and extend trust, and an outer circle of values and principles.

The first reason it is imperative to understand the two distinct components of Trust, ie character and competence, is that people in all facets of life assess the trustworthiness of themselves, and the business they represent, by their intentions, part of their Character component. But they assess the trustworthiness of others by their actions, and even more harshly by their results, part of their competence component.

So the one activity is being evaluated on the Trust-worthiness scale from distinctly different perspectives.

What is the lesson to learn from the two differing perspectives involved in the assessment of Trust-worthiness?

All businesses need to refine their ability to appropriately communicate the results they have achieved for all stakeholders. It is vital they are seen to take responsibility for their results – not their intentions, and not just their actions.

Taking responsibility for results will build Trust with stakeholders – even if the results were not what was planned or hoped for.

How Trust Accounts work.

In addition to the various accounts every business initiates with their stakeholders – prospects, customers, suppliers, distributors, shareholders and employees – there is also a Trust Account being constantly updated between the business and every individual stakeholder.

This is best envisaged as the T shaped accounts used to illustrate basic accounting principles, with trust building “deposits” being listed down the left hand side of the Trust Account, and trust eroding and trust destroying “withdrawals” listed down the right.

Every time the business interacts with a stakeholder in a way that increases Trust, an appropriate deposit is added to the Trust balance. Conversely, if a communication or activity between the business and stakeholder causes an erosion of Trust, the appropriate withdrawal needs to be processed to the Trust Account and the balance adjusted accordingly.

The most effective way to build Trust and initiate regular deposits into the Trust Accounts with stakeholders, is for the business to consistently act in ways that demonstrate their competence. Conversely the quickest way to destroy Trust and wipe out the Trust Account balance, is to act in a way that violates the character component.

Unlike accounting, where a dollar on the debit side of the T account has the same value as a dollar on the credit side, there is a very unforgiving exchange rate in play with Trust Accounts.

Trust balances established via deposits over many years of a business relationship can be eliminated via one withdrawal, particularly if assessed as being character related.

The reality is that Trust goes up a slow moving escalator, but uses the express lift to come down.

Harsh, but that’s today’s business reality.

The culture of Trust.

Treat your employees the way you want them to treat your prospects and customers.

Particularly in Customer Service and call centre roles, employees who are not trusted by their employer will never be able to create a trusting environment with the employer’s prospects and customers.

The culture of Trust – or mistrust – will rub off.

The Trust effect on business costs.

If all progress in the development of a business relationship will stall until an acceptable level of Trust is established, the time and the number of interactions required to establish Trust becomes a major factor in the cost of doing business.

This is particularly true when selling intangible products and services, or targeting mature age consumers, who have experienced more reasons to be cynical of the customer orientation of most sellers.

At one extreme, if the seller in a proposed transaction is a trusted member of the buyer’s family, Trust is instantly established and the transaction will proceed quickly and therefore at minimised cost and enhanced margin.

However, if the seller has been the subject of negative media attention, and operates in an industry considered in need of legislative control, the establishment of an acceptable level of Trust may require an extensive and expensive investment of time and resources.

Trust Paced Selling.

The role of Trust in selling activities and marketing communications is covered extensively in the article Trust Paced Marketing and Sales, however to add to the understanding of the distinction between the character and competence components, research has consistently confirmed most sales are emotionally driven and emotionally decided (relying on an assessment of the character component), and are then justified logically (relying on the competence component).

This thinking is also expressed in the maxim ” Buyers don’t care how much you know (competence), until they know how much you care (character).

The Bottom Line: The pace of progress to a mutually beneficial customer relationship is inextricably linked to the pace of establishing mutual Trust.

The best way to receive Trust? You extend it first! Could you trust someone who doesn’t appear to trust you?

As Managing Principal of SeniorCoach.biz, Graeme Smith’s objective is to convert his Lifetime of Learning, and contemporary knowledge of the consumer behaviour of mature age Australians, into business opportunities for his Clients. http://www.SeniorCoach.biz

Article Source:

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Graeme T Smith - EzineArticles Expert Author

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