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
Tags: trust in business
Trust is the basis for all businesses as well as simple relationships. It is the secret of success.
Trust is important but let’s remember creativity is what makes you stand out. and I agree with this. Trust is the foundation of all things. Without it, we’re nothing.
Only thing required to take business next level is, “more business” and that of-course not always require more money or personal as you said. Have seen business getting CAGR of 100 to 500% without capital and man power. It usually depending on model you have.
Good post. Thanks for the opinion on Annuities; I personally favor to use skilled people.
I totally agree that trust is the fuel that is able to double your business. I love the analogy which you used to describe the US economy has become so powerful because of trust. I believe it to be very true. As 3rd world economies grow – they will also realize trust is a key element in all business. Thanks you for the informative article. It really opened my eyes to certain issues.
This holds true particularly in online world, where you meet people whom you have never seen, or heard and you work on instincts and of course trust. Without trust, you can die thinking of whether to make a start. Business, at the end of day, is all about trust. Goodwill transforms into cash, an invisible, but surely powerful force.
I agree. Trust and friendship with both your customers and suppliers is absolutely vital to grow your business.
I think trust is very important. You need to have faith in your business and treat it like it’s your baby. Some people might disagree, but I think that’s how it should be. Raise your “baby” until it’s grown enough to let it go away. Just like humans, business eventually will die whether it’s 10 years from now or 200 years from now. The key is to have trust and faith , especially in your decisions what is hip hop
the best asset that you could have is being trustworthy! once you have that name.. everybody will be magnetized by your charm even without knowledge of how good your product/services is.. It really makes sense to have credibility in your business’ blood.
when it comes to success, trust is definitely the reason it. Not just hard work alone
when there is a recipe for success it’s definitely TRUST