Capitalism cannot function without trust. As the Nobel laureate Kenneth Arrow observed, “Virtually every commercial transaction has within itself an element of trust.”
Trust = ƒ Expertise + Quality Communication
The converse of Arrow’s statement is: “Virtually every commercial transaction has within itself an element of risk.”
Perceived Risk
Successful transactions evolve into sustainable relationships when trust builds and risk is mitigated. This is the goal of every successful Rainmaker — build trust and mitigate risk as the client perceives it. As St. Francis of Assisi said — “Lord, grant that I may not seek so much to be understood as to understand.” Understand first before you can expect trust in return.
In building understanding and trust, the most important thing we can do is consider the situation of the person who is gifting their trust to us. Their perceptions are what matter; their perception of the risk is what you need to understand.
Perceived risk is a biggie because it births a powerful emotion — fear. “If the risk I perceive is too high and I’m fearful of the result, I won’t act. However, if I trust you I can depend on you. I can be confident you will do as you say.”
So, how do you earn and build trust? First, realize it may take time. You are seeking to understand and not everyone shares that freely, or quickly. Within the context of time are three variables that directly impact the function of trust.
Trust is a function of Expertise and the Quality of Communication, both factored by Perceived Risk.
Expertise — The skills required to handle a given task, situation or crisis, as perceived by the client; generally acquired through experience, academic background, specialized training and coaching.
Quality Communication — The building of a positive and supportive climate using skills in listening, headlining, and paraphrasing (to ensure understanding of complexities, problems, ideas, etc.), all as perceived by the client.
Perceived Risk — In this context the various outcomes that could be unfavorable to the client, as perceived by them.
Recognize that the relationship between trust and perceived risk is in the background of virtually every decision-making situation. Think first about the risk the client sees; it may be related to you, it may not; it may be controllable, it may not. Regardless, it is this perceived risk that triggers the strong fear emotion.
If perceived risk is high, expertise or quality communication or both must be kept high if trust is to remain at high levels. Assess the climate surrounding the relationship and ask yourself — Is it collaborative and supportive? Regarding the quality of your communication with the client, ensure it is authentic, clear and positive.
Demonstrate expertise in resolving a problem and mitigating perceived risk. Offer solutions in a generous manner. Where you can help, help. Where you know your product or service is the best solution, present it. If you do present your product or service, be 100% confident of its value to the client. Is it a solution in the client’s mind? Does your offer mitigate the risk the client perceives?
Finally, realize that trust is both strong and fragile at the same time. Trust is strong to the point that it enables faith without proof. Trust is fragile in that once broken it is very difficult to repair. And in the absence of trust clients may not believe you even when you tell the truth.
Protect and build trust by saying what you mean and meaning what you say. Do not commit to something unless you intend to do it. Then do it.
Author Ken Cook is founder and managing director of Peer to Peer Advisors and developer of the Rainmakers System. Contact him through his website at www.peertopeeradvisors.com.
