[This is the fourth in a series on 6 Factors that are transforming B2B Sales in 2012. This factor deals with Social – and I have broken that down into four separate posts. This is the second of the posts on Social.]
Social Trust
We are seeing a fundamental shift in the interactions between buyers and sellers, and indeed between all commercial entities and their customers. Attitude and preference, as they relate to how a customer thinks about a business, are more likely to be informed by peer groups than by expensive commercials or company statements.
For any network to work effectively, it has to be built on trust. Social networks in their current manifestation deliver benefit to the participant that is directly related to the associated trust currency, a wallet that is filled by value delivered in line with a promise made, where time is donated by the recipient in exchange for value received from the donor. Trust is earned in those micro-transactions and is fundamentally based on the transparency – perceived or real – of the social network engagement. In the Social Universe, you can develop a personality where people learn who you are, what you stand for, and whether you are, in fact, as good as your word.
Honesty and integrity as propellants of commercial energy have not necessarily been the most comfortable bedfellows with the pursuit of profit and revenue – particularly since the turn of this millennium. Madoff, Enron, Lehman, MCI, are names that send shivers down our collective spines.
I’d suggest that honesty and integrity are two of the least understood, and most undervalued, personal and business assets – particularly when it comes to the accelerated world of the Social Universe. Social citizens of high influence can damage a business’s reputation by a single tweet. More importantly however, ‘average’ citizens in the Social Universe can themselves influence large corporations when wielding the tool of social media.
When Social Consumers Go Viral
In September 2011, Bank of America announced a monthly $5 debit card fee. This announcement was poorly timed as it came during Occupy Wall Street’s protests over the bank’s $45 billion bailout. On October 1st, 22 year old Molly Katchpole wrote a change.org petition against the fee, and Molly’s petition reached 300,000 signatures in six days. Bank of America reversed its decision.
When domain registrar GoDaddy.com stated it was supporting SOPA – the Stop Online Piracy Act, deemed by many to be damaging to the independence of the Internet – social media sites revolted. Reddit user selfprodigy declared December 29th 2012 “Transfer your domain day”. Ben Huh, CEO of Cheezburger, tweeted “We will move our 1,000 domains off @godaddy unless you drop support of SOPA. We love you guys. But #SOPA-IS-CANCER to the free web.” Jimmy Wales, founder of Wikipedia, tweeted that Wikipedia was also “proudly” leaving goDaddy. Users pledged to transfer 82,000 domain names to other providers. GoDaddy reversed its position on SOPA.
When it became known that fashion house Armani and Versace were using sand-blasted denim treated with chemicals that were reputed to poison the lungs of 5,000 Turkish denim workers involved in the manufacture, there were hundreds of angry posts on Facebook, and 38,000 people signed an online petition against the Italian designer’s failure to boycott sand-blasted denim. Within a month Armani and Versace publicly condemned and banned sand-blasted denim from their lines.
A reputation for being honest or having high integrity is priceless. It brings trust and openness, deeper relationships and more productive engagement. Trust is ‘truth over time’. Trusted is earned. It is hard to win but easy to lose. Social media is forcing transparency, authenticity and accountability. Corporations and big banks can no longer make business deals without the scrutiny of those it impacts; the Internet, the phenomenon of Wiki leaks and the social and political climate is forcing more disclosure.
Social Trust is Fundamentally Personal
If I asked you who you might consider as your primary trusted sources, you will probably think about your family, your friends, your colleagues at work, other people in your neighborhood or people in your social circle. It is rare that the CEO of MegaCorp or the leader of your government will spring to mind as your primary trusted source. When it comes to picking a provider of services for your home, you are more likely to ask a friend for a recommendation for a plumber than pick one blindly from the White Pages or Craig’s List. If you are choosing a band to play at your ‘rock-chick’ daughter’s wedding, you might ask her friends what local bands she likes, or looks for a recommendation from others that you know to make sure that the band you book is more Metallica than Manilow.
From a purely pragmatic perspective, always being honest means you never have to remember what you said or come up with different versions of the truth for different audiences, exercising your corporate PR department in increasing tangled webs of spin and counter-spin. Beyond the counter-productive nature of inadequate transparency, the reality is that what you, as a business might broadcast in your public pronouncements, is of diminishing value, and it is worth considering whether, in isolation, such expenditure is wise at all.
Lasting business relationships between the seller and the buyer, like lasting personal relationships are built on a foundation of trust that for each of us is fundamentally personal. While always important, trust as a determining factor of business transaction efficacy increases or decreases in amplitude at different phases of the business interaction. This is because risk transfers from seller to buyer before and after the sale. To understand how this manifests in the Social Universe, and where social network interactions are more or less necessary or powerful, it is worth considering the phases of a commercial transaction, bearing in mind that at all times, trust is fundamentally personal.
I will discuss that in the next post
. . . and that is where trust begins to derail.
When a seller’s intent becomes warped or misguided, trust is broken, and as you suggest, it’s difficult to regain. Weirdly, this seems obvious, but if good intent were easy to ensure, we wouldn’t experience the trust breakdowns you’ve documented, along with many others.
I’d like to clarify one point you made ” . . . risk transfers from seller to buyer before and after the sale.” In fact, risk transfers bilaterally between buyers and sellers throughout the sales process. A vendor awaiting payment after product (or service) delivery has assumed financial risk that didn’t exist before shipment. A buyer has assumed ownership risks once goods have been delivered to the receiving dock, or in some cases, when they’re loaded into a shipping container.
So many good points in this blog, I’m saving it for my list of 2012’s best . . . but first, a question: according to a recent survey through Harvard Business Review , male professionals with higher ethical standards earn less. This seems counter-intuitive to me. I wondered if you had any opinions on this finding . . .
Excellent article, thank you for sharing. You brought up some great points. Why is it that this is so seldom written about? The advent of the social media age is making it increasingly difficult for companies (and individuals) to operate in an anonymous vacuum where they show one face to those in their inner circles and another to the “world.” The times they are a-changin’; not always for the better, but in this case, I think so.
Andrew, referencing your statement about the Harvard Business Review Survey: it is just an indicator of our human propensity for hypocrisy.
The same CEO who blasted GoDaddy for their stand on SOPA prefers a CFO who will do what’s right for The Company – not necessarily what is right in his God’s eyes or the eyes of the law. A woman who signed that petition against Bank of America’s $5 monthly debit card fee may not think twice about keeping silent when the grocery store clerk gives her back $5 more in change than she should have received. One of those angry Facebook posts regarding Armani and Versace’s use of harmful chemicals may be poisoning their family as they smoke cigarettes inside their home or car.
The HBR results don’t surprise me at all … sad, but true.
Andy,
Thanks for the comments.
I went to the HBR article hoping to find an explanation for the findings – but didn’t find one. The variance at 3.4% is so small that likely within the standard error margin. I can’t comment – but I do know that trust, honesty, integrity can be cheap to proclaim and expensive to exhibit.
Donal
Kerry,
Thanks for the comment.
It may be the case that that the protagonists your reference (BoA lady and Armani guy) are themselves deceitful or have double standards – but in the first instance I’m not going to assume that. It’s rare that those who stand up for themselves get what they deserve, and sometimes it is those who follow that get the benefits.
Applauding the good is contagious.
Thanks
Donal
Donal,
Kudos on an excellent article. As someone who’s been working on and writing about trust for 15 years, I can tell you, not everyone gets it right.
I’d like to underscore a few of your points. First, you’re very right about trust being personal. To be slightly more precise, everyone experiences trust on a personal level, even if the environment can help or hinder the level of trust that is experienced. The same might be said about two other virtues you point out, honesty and integrity. Environment can foster their presence, but at root they are personal virtues, and experienced as such.
Another point you implicitly touch on is the fact that ‘trust’ is the result of an interaction between two asymmetrical players: the trustor and the trustee. Or, in the commercial world, the buyer and the seller. The characteristics of what makes one trustworthy are not the same as those that make one trusting.
The trustor generally takes the risk; the trustee generally must be the one who is trusted, or trustworthy. You do a very right thing here: you not only point out the direct characteristics of trustworthiness (honesty, good intentions, reliability), but you point out a more complex trait – transparency.
For a seller (or trustee) to be transparent is to take on part of the role of the trustor: when we’re transparent, we ourselves take a risk. To take a risk is to show that we too are willing to trust, that in fact we’ll take the first step. This act of empathy is what really drives trust in sales, I would suggest; it extends the hand, shows we’ll take the first step, and so forth.
I could go on, but you get the idea; fine article, thanks.
Charles H. Green
author or co-author The Trusted Advisor, Trust-based Selling, the Trusted Advisor Fieldbook.
Charles,
Thanks for your comments. Coming from you – this is high praise indeed. I’ve been a follower of your work for most of those 15 years.
While sometimes relegated to a ‘nice to have’, I believe that return on honesty, integrity and trust, is actually one of the most persuasive commercial equations. But it requires a long term perspective and, on occasion, some intestinal fortitude – to stay the course.
Thanks
Donal