Personal MBA: Trust

Personal MBA: Trust

Kaufman proposes a hypothetical deal between the reader and a contractor. He explains that you would never pay the full sum of money needed to build a lavish villa without some sort of guarantee that you would receive what you’re paying for. He goes on to state that, “Without a certain amount of trust between parties, a transaction will not take place.” This statement is undoubtedly true, but I’ve noticed that for most transactions this bar of trust is pretty low. Our society, in large part, works on assumptions made by people everywhere, all the time. We often assume, without much thought or proof, that a business person is not going to lie to or steal from us.

What I find interesting goes back to my previous post on reputation. Your reputation as a business plays a big part in creating and maintaining that trust. There are so many little factors that instill some amount of trust in people’s minds, even the fact that your business exists signals to customers that you are successfully providing some value. But when you have a stellar reputation, people don’t even think twice before deciding to buy from you. For example, people automatically know that they will probably find the best price for a product on Amazon, and if they see the word “Prime” next to a product, they know it’ll get to them quickly and in excellent condition. There’s hardly anything else for people to decide, the trust is there.

Amazon has achieved this because they’ve consistently provided quality service, dealing fairly and honestly with their customers for years. They’ve also collected and showcased market signals like customer reviews, industry awards and public initiatives that bolster their reputation. These signals are where I think smaller businesses must focus in order to build trust. I am always more willing to do business with a company when I see they have a consistent record of satisfied customers. I don’t give as much weight to awards or charitable/environmental initiatives, but I know that other people do.  Showing the market that you can and have provided people with value and that you care about your community can go a long toward building trust between potential customers.

Facebook
Twitter
LinkedIn