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June 29, 2008

Trust and the $5 muffin refund

MufinToday I was reminded about the difficulty - and the power - of being able to successfully market "trust".  I've been facinated with the "marketing of trust" ever since I wrote my MBA thesis - I've long forgotten the exact topic(!) - but I vividly recall it was a paper combining the theory of marketing trust with the difficulties in building the concept of trust into long term IS outsourcing contracts.

For anything but the most basic ICT transaction, ultimately the customer has to trust that we're going to do "the right thing" by them.  But how can we market the degree to which we can be trusted?  Every firm says they can be trusted - but not all firms can be trusted to the same degree.  How do we get this message across?

In our Essence of Selling Solutions methodology, we speak of the necessity of using Evidence - case studies of other organisations that are happy to go on the record to speak favourably about our work with them.  (Indeed - on our web site we use a quote from one of our key Microsoft contacts as Evidence that we're "up to the job".)

But what if we're in an existing relationship with a customer, and we're about to enter unchartered waters - perhaps they're about to outsource a significant chunk of their IS infrastrucutre to us, and it's just too hard to write a contract to cover every eventuality.  HOW DO THEY KNOW THEY WILL BE ABLE TO TRUST US?

Marketers define trust as (and I'm paraphrasing!)

A can trust B if B has the opportunity to rip A off - and chooses not to do so.

In an outsourcing contract, the vendor will end up with much more information about the customer than the customer has about itself - it would not be difficult to use this information to unfair advantage.  It's the very fact that the vendor has this information - but chooses not to use this to its advantage - that defines the trusted relationship.

So - where do the muffins come in?

This morning I went and bought the family muffins for breakfast.  I was charged $20 - there were quite a few muffins so I handed over the $20 note, and walked off, very happy as I was able to get the last muffins in the store.  (No fun returning to the muffin hungry family empty handed!)

Literally as I was driving out of the carpark - some hundreds of metres away from the store - I spied in the rear vision mirror the shop assistant that served me running frantically towards my car, waving madly.  I thought I must have left my mobile phone behind - but to my amazement she ran towards the car waving a $5 bill.  When she drew near she explained breathlessly "I'm so sorry - I overcharged you - the muffins are only $2.50 each - I don't know what I was thinking!"

WOW!  I would never have noticed this - there would have been absolutely no recriminations if she had not come after me.  But she did.  Once she realised her mistake, she had the opportunity to knowingly "rip me off" - and she chose not to.  I can trust her - and by association I can trust her store.  I now don't think I could ever buy muffins anywhere else!

SO - next time we quote a service fee to a customer based on the numbers of days it will take us - and it turns out we don't need anywhere near that number of days - do we reduce the size of our invoice?  If it's close to the end of the financial year, and we need a certain sale to make our target - but all of a sudden we become aware under confidentiality of a far superior solution that will only become available in the new financial year - do we deliberately postpone the sale, even if this means we won't make target?

What efforts are made in your organisation to "do the right thing" by your customers?

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