DEVELOPING TRUST IN BUSINESS RELATIONSHIPS – YEARS TO BUILD, SECONDS TO DESTROY
The lifeblood of every business is to attract, develop, satisfy and retain customers. In times characterised by transient relationships, reduced loyalty and heavy competition, it is challenging to make this goal a reality. Yet there are a number of companies and organisations that have developed a competitive edge by dedicating themselves to forming strong relationships with their employees, customers and vendors. When I say I trust you, I am really saying that I trust that you will behave in a way that I expect, and that way will be in my interest. Simply put, trust means confidence. When you trust people you have confidence in them, in their integrity and their abilities. Keep in mind that it does not matter if you are the business owner, the sales person, or just an employee or assistant to any of them. The choice is yours for what you are about and what you stand for.
The best way to start showing people that you, your business, and your products are trustworthy, is to have those values within you (and important to you) to begin with. The essential elements of “trust” are both character (who you are) and competence (your strengths and the results you produce). There is a cost associated with low levels of trust in a company — but there is an upside for high-trust businesses. Those with high trust get more work done, have better results and win in the marketplace over their low-trust peer organisations. In fact, high-trust organisations outperform low-trust organisations by three times.
Trust is a currency, which is exchanged as the business transactions progress. Each party, through experiencing business transactions, learns more about how the other party will behave, and eventually gains expectations about how the party will behave in the future. If, based upon previous experience, the parties begin to feel that the other party will act in their interest, and not hurt them, then trust goes up, cost goes down and quality of life goes up.
The proof of the value of trust in business is compelling, as set out below.
A study conducted in 2002 by Watson Wyatt who’s survey of 12,750 workers across all industries showed that high-trust organisations had a total return to shareholders (stock price plus dividends) that was 286 percent higher than low-trust organisations.
Another expert in the field, Stephen Covey, highlights that trust always affects two measurable outcomes – speed and cost. When trust goes down, speed goes down and cost goes up. This creates a trust tax. When trust goes up, speed goes up and cost goes down. This creates a trust dividend. It’s that simple, that predictable. For example, Sarbanes-Oxley was passed in response to Enron, World-Com and other corporate scandals. While Sarbanes-Oxley has helped maintain trust in public markets, this has come at a substantial price. All executives subject to Sarbanes-Oxley rules know the amount of time it takes to comply with its regulations, as well as the added cost of doing so.
Companies with high trust understand that valued employees, treated fairly and respectfully, will treat their customers well. The best way to start showing people that you, your business and your products are trustworthy, is to have those values within you (and important to you) to begin with. Next you want to choose behaviours and business practices that reflect those values. Set the example that you would like others to follow. Be honest about who you are and what you are about.
Ideally your business should encourage good business practices. The best way for consumers and employees to believe in your authenticity and develop trust with you is to communicate regularly, openly and consistently show transparency. Trust takes time, but it is worth the investment, which pays itself back in reciprocated loyalty, repeat business and the power of referrals and endorsement testimonials. It is slower, but also cheaper because of longer-term value.
The following are some practical tips:
- Act with integrity: A person has integrity when there is no gap between intent and behaviour…when he or she is whole, seamless, the same – inside and out.
- Take a sincere interest in others: Beyond the business transaction, try to get to know both your clients and employees.
- Listen to what the consumer or employee thinks, wants and needs. Frequently invite feedback and survey your customers. Listen and respond to them.
- Be enthusiastic about your product or service: Again, your clients will be able to tell if you truly believe in what you are doing, or if you are only working for the paycheck.
- Help your clients find solutions to their problems: You do not want your clients to feel or act helpless. Offer reliable assistance, but remember that your goal is to have your clientele manage things on their own and not have to call on you for everything.
- Be honest and upfront: Do not hide things from your clients. If you are unsure about something, tell them. But follow it up with research and an eventual answer. Be clear about what you are realistically able to do and what may need to be outsourced to someone else.
- Always follow up to be sure your client is satisfied: The periodic phone call or e-mail after the product or service has been delivered will set you apart from your competition. Most new business comes in the way of a referral from a satisfied customer.
- Exceed the customer’s expectations: Make sure that your customer wants to come back to you again and again, because he/she trusts you.
Smith cautions that you cannot trust everyone in business. Trust should be earned in business and a business owner who trusts first and asks questions later can really get burned. Trust is the one thing that changes everything. Everyone in a company or organisation should work towards the building of high-trust business relationships. When the emphasis is on developing trust, then relationships become mutually beneficial. The ability to foster high-trust business relationships is a measurable, definable component of all leadership, management and entrepreneurial success. Fortunately, it can be taught and learned by changing our mindsets, getting the required knowledge, tools and techniques.
Karl Smith is a business networking and referrals coach.