Founder and CEO of ERG Enterprises. Nationally recognized thought leader on entrepreneurship, investing and leadership.
In business, I find that trust is the most powerful asset. In fact, 81% of consumers say it’s the deciding factor in their purchasing decision. And B2B buyers rank it as the most important consideration for a potential partnership.
It’s helped me grow numerous businesses in five different industries and guided how I built the portfolio of my investment company.
Despite its importance, trust can also be an elusive aim for founders and entrepreneurs looking to grow their business. I’ve often observed it take a backseat to the more visible realities of raising capital, bringing a product to market and building teams. Yet I’ve seen how the entrepreneurs who prioritize trust tend to build the most successful businesses.
So, how can you build a trustworthy business in the eyes of the people who drive value for your business? Here are the three ways you can build the perceived credibility and confidence needed to win.
1. Identify a target customer.
Every great business is perfectly engineered for a specific kind of customer. It’s also particularly unattractive to those outside of this niche. Successful businesses choose a target customer and channel their scarce resources of time, talent and capital into delighting this exclusive demographic.
I’ve used this philosophy to develop successful businesses in healthcare and hospitality. I’ve also used it as a guiding principle when investing in startups and scaleups.
And for good reason. This disciplined approach can enable your business to acquire the experience, expertise and talent to become the best at what they do. By picking who you want to serve, you create the conditions to deeply understand your clients and their needs—across marketing, sales, fulfillment and support functions. You also satisfy the most important condition to building trust—delivering on promised results.
By choosing a focus and being disciplined about pursuing it, you can maximize your chances of delivering value your customers can’t find anywhere else.
How do you identify your target customer? While the answer varies depending on the maturity of your business (startups must go through a process of discovery to find their target customer), start by analyzing your current customer base. Evaluate the customer segments that are most valuable to your business. Consider the sustainability of this segment, including its total addressable market. Choose the customer profile that is most sustainable and referenceable, while also generating the highest margins for your business. Also look for customer profiles that create the best experience for your employees.
2. Invest in research.
B2B buyers are inherently skeptical. Their professional standing or even job security depends on choosing the right vendors that deliver results to their organization. And with the companies switching B2B vendors every five years, you can’t blame them for being selective in their purchasing habits. You also can’t argue against why they would question your value proposition.
That explains why value propositions need backing from credible third-party research. Any business can make promises, but those that succeed ground them in verifiable metrics and facts from trusted sources. The more your business operates like the latter, the more you can push buyers past their inherent skepticism to a place where they can fully embrace your value proposition.
To make your business research-based, start by identifying the organizations, associations and thought leaders most trusted and valued by your target customer. You can identify these sources through a quick internet search or by surveying your existing customer base. Once you identify them, focus on gathering research that supports your mission and offering, including the problem you intend to solve, your solution and your unique approach.
When acquiring new business, you’re asking your prospects to separate with their status quo and transition to a new reality. This ask requires a significant degree of certainty. Your clients need confidence that the new reality you promise is worth the challenge and cost of transitioning from where they are and what they know.
3. Get validation from credible third parties.
Like objective research, third-party validation adds substance to your marketing and value proposition. Credible third parties that verify the success of your solution build immediate credibility in the eyes of prospect, a reason it’s another important strategy for building trust with your target customers.
While research should focus on the market—mainly, the problem your business intends to solve and the validity of your solution—third-party validation should focus more specifically on your company, its performance and the value it creates for your target customer.
To obtain third-party validation, start by approaching your network. Solicit validation from your most valued customers, advisors and partners. Be transparent about what you’re attempting to accomplish, and give them multiple ways of supporting your cause. Third-party validation can take the form of case studies, testimonials, webinars and more.
Trust is hard-earned, but worth it.
Every economic activity depends on trust: a customer buys a product with the expectation of a specified result. For businesses to succeed in the long term, they need to meet this expectation before and after the sale. Still, earning trust remains extremely challenging and complex, yet necessary to survival.
To build trust, focus on the customer that creates the most value for you to serve. Invest in the research they can depend on. And then expose them to the clients who fit their profile and have benefited from your solution.
In my more than three decades of experience as a serial entrepreneur and investor, this is the winning formula to building trust. It’s also the winning formula, period.
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