Most business owners think that to grow their business, it takes more money or more personnel. But maybe another ingredient is more important, the ingredient of trust in business.
As an illustration of the importance of trust in business, consider the financial crisis. It’s not a financial crisis or liquidity, it’s a crisis of trust. One day, Lehman Brother’s trading partners stop trusting Lehman. So they withheld business, decided not to extend credit and Lehman had to declare bankruptcy. Consider the banks slowness to lend—they don’t trust that the loan will get repaid. Or consider the credit card company’s reduction in credit lines because they don’t trust that the cardholders will pay.
In fact, the main reason that the US has the largest economy is because its residents have had the most trust in one another. We consider signatures on contracts to be binding (because we trust the legal system to enforce signed contracts) and in most business transactions, we even rely on the other party’s word. But now, we see what happens when trust comes into question. Parties stop dealing with one another and the economy shrinks. Other countries have smaller economies because they have less developed systems of trust and we are now have a taste of what goes on in other economies.
Trust has the same impact on the micro-economy of your business as it does on global trade. Your prospect does not buy from you because the investment has a “terrific ROI.” They buy from you because they trust you. In their eyes, you are the “trusted advisor.” If a stranger approaches you on the street, hands you a dollar and says “I will sell you this dollar for a dime,” the fantastic ROI is insignificant compared to your skepticism that something is fishy. You don’t trust the stranger and you turn down the guaranteed 900% ROI. Your prospect feels the same way.
Your prospects don’t become your clients because you have great financial options. They become your client because they trust you. The next several posts will deal with the issue of how you build trust so that you can rapidly convert prospects to clients.
“You can have all the facts and figures, all the supporting evidence, all the endorsement that you want, but if you don’t command trust, you won’t get anywhere.”
–Naill Fitzgerald, Former Chairman, Unilever
