Elance Blog

The Role of Trust in Referrals

Referrals are a key driver for success in the business world today. John Jantsch, founder of Duct Tape Marketing and author of the upcoming book essential for businesses titled "The Referral Engine" gives us some insight on how building a strong level of trust can truly impact your business. (We're giving away five copies of The Referral Engine - scroll down to the bottom of this page for more information.)

In a recent survey of small business owners I asked - What’s the number one consideration you make when giving a referral? 73% answered - I trust they will do a good job.

In the business of referrals, trust is the most important reason a recommendation is made and, conversely, lack of trust the single greatest reason referrals don’t happen. There are countless ways that companies build and break trust with their customers, but most can be summed up with the term “honesty.”

What builds trust?
Trust is earned by keeping promises: tangible things like delivering on time, paying bills on time, and honoring guarantees; and less tangible things like authentic marketing messages, caring service, and a culture of respect.

What erodes trust?
Trust is also lost by overpromising. I’m not suggesting that you shouldn’t aim high, but I am suggesting you must know what you are capable of doing and do what you say you are going to do. It sounds so simple, yet it’s the number one reason people lose faith in businesses and in entire industries.

Trust and mistakes
When you have trust—earned by keeping your promises—you can make mistakes, own up to them, and correct them without loss. One of the hallmarks of a highly referred business is that they work as hard on fixing mistakes as on any other aspect of their business.

Extending trust
Of course, there are two sides to trust. Trust is a quality that must be extended as well as earned. You can see this in the types of employees an organization attracts and develops by trusting their staff to make smart, customer-focused decisions.

Sort of trust
When was the last time you referred a friend to a business you kind of trusted? Show me a business that automatically receives a substantial amount of business by way of referral and, with rare exception, you’ll find a business that places supreme value on building and keeping trust in every aspect of business.

Consistency builds trust
In my book The Referral Engine I tell a story about one of my favorite marketers – Scott “The Nametag Guy” Ginsberg. Scott is famous for wearing the Hello my name is Scott nametag every day rain or shine.

In his presentations, Scott Ginsberg often recounts stories of people being so threatened by his name tag that they actually wanted to fight him. He tells of people hurling insults at him, ripping the tag from his coat—he’s even received e-mailed death threats for his tag-wearing ways! (People obviously not getting enough ketchup in their diets.)

Next time you see Ginsberg, I invite you to (gently) peel the name tag from his topcoat; it’s okay, he’s got one on his blazer, and another on his shirt. And just in case your group needs him to present at your next pool party, he’s got his name tag permanently tattooed on his chest. So yeah, he’s committed to his brand and to his primary referral strategy.

What Ginsberg adds to this equation is an unquestionable commitment to his differentiation, his consistent talkability factor. It does very little good to create this week’s publicity stunt in an effort to get folks talking for today. Referability is a long-term game; it’s not a drive-by event but a well-planned, precisely calculated marathon.

Repetition, consistency, and authenticity build trust and are the foundational tools of the referral trade. People can sense when you are attempting to draw attention for attention’s sake, or are stepping out of your authentic self so far that it doesn’t feel right to you or anyone associated with your business.

Commitment to a remarkable difference demonstrates that yours is a brand that can be trusted.

About the Author:
John Jantsch is a marketing and digital technology coach and is the founder of Duct Tape Marketing. His new book, titled "The Referral Engine" offers practical techniques for harnessing the power of referrals to ensure a steady flow of new customers. For more, visit http://www.referralenginebook.com.

The Elance Referral Engine Giveaway
Elancers, what are some of the ways you build and extend trust with clients and other people that you work with? Be sure to add a comment to this post on our Facebook Page. We’ll be giving away copies of John Jantsch’s new book “The Referral Engine” randomly to five people who share their answers on our Facebook Page. Act fast as we’ll be picking the winners on May 7.

Comments

The blog is really helpful for the new providers. I learnt much more from this blog.
Thanks a lot and hope to see another useful and helpful blog.

I do not know whether it was Elance or the author, but there is a missing word in the summary page. Referrals are great, but including all the words would also be nice.

Hi my name is Gregory Victorin a business owner and by reading this I know I'm in the right track it is hard to start a business without knowing any one to help you, in the city it's not about what you know it's about who you know. My strategy from the beggining was to create my name my company name is by building trust with each and any one that we do project for they will always know who we are, and refer us to any one that need any kind of our service. It's hard to start a new business and I had to learn that the hard way. People that has been in this business refuse to help when ask because the see us as competition. I don't get made neither do I take it personal but, I know if anyone start a new business like mine and needs any kind of infomation regardless if they were going to take my highest client I will share that infomation with them. Because any client that we have we did not just have them just because we knew someone we work hard and the work we provide to them make it impossible to loose them to any other provider. Thank you, for sending me this message we really needed it to know if we were on the right track with our strategy.

John Jantsch knows what he is taking about.

I am currently reading his new book: The Referral Engine and LOVE it!

I have been in Marketing I guess for over 35 years now and he shares
some GREAT insights in this book as well as a Myriad of Action Steps
you can take right now to start generating referrals.

I think many people do realize how important Referrals are, however,
it is ASTONISHING to read that LESS THAN 80% actually have a
Referral System that they use on a daily basis.
...if you think about it... each and every client that is leaving your establishment
without having a way (track-able) way to refer you to someone else...is
...Money Left On The Table.

If you ever calculated the Life Time Value (LTV) of acquiring a New Client
you know what I am talking about. One of my Mentors, Jay Abraham, said
that Knowing Your LTV is probably one of THE most important numbers
you MUST know if you are a business owner....WHY? Because NOW you
know what you can Spend to acquire them. And some people think that
giving a 10% discount is all they can afford..... little do they know is all I am
going to say ;-)

If you want to calculate your own LTV in 4 steps, I have developed a Free
Online Calculator and you can do so right here by going to this link:
http://www.ripcard.com/ltv-calculator.php

Alf Marcussen
Inventor / Founder
http://www.RipCard.com

Referrals are a key driver for success in the business world today. That's true! But what makes you willing to believe what someone tells you? What makes you trust what you hear or read about? "It's fantastic!" might be a good enough referral to get you to try a new restaurant. But if you're planning to invest 10K - 50K in a new website, test-marketing a new product or building a new business brand, you'll need more than that. So what makes a referral credible?

According to Stanford University’s Persuasive Technology Lab claims credibility is based on two components:
1. Trustworthiness and 2. Expertise.

And Aristotle identified three components: 1. Virtue, 2. Practical Wisdom and 3. Disinterested Good Will. He defined "virtue" as the degree to which someone walks their talk. So what he called virtue, today we call integrity.

I added fourth and fifth components to Aristotle’s three. In today’s world, “where” you encounter a person or a thought plays a big role in its credibility. The “where” includes location, positioning and associations.

Clearly “where” you first encounter a person, product, service or business makes their claims more or less credible.

Do you “meet” the claim or person in a headline on the front page of the National Enquirer? During a discussion on “The View?” In an article in the Washington Post? A referenced quote in the Harvard Business Review? Or are you introduced by a respected peer?

The fifth component is congruence or fit.

I’m sure you’ve met people whose appearance, behavior or associations are incongruent with their professional role: The overweight nutritionist. Or the interior designer whose own home could be nominated for an episode of "Hoarders.". Your appearance, behavior and associations play key roles in your overall credibility.

MIBOSO's 5 Components of Credibility:

1. Virtue (Integrity)
Do you consistently walk your talk?

2. Practical Wisdom (Expertise)
Do you consistently demonstrate that you have the skills and experience to “do” what you say you do?

3. Disinterest
Are you doing what you're doing because it fits your strengths, values and beliefs? Or because of what you hope to gain from doing it?

4. Location / Positioning / Associations
Where do you show up? What company do you keep?

5. Congruence
Are your actions, associations and appearance congruent with your expertise, goals and values? Do they validate or invalidate your professional claims?

Being credible is as essential for success as referrals. How credible are you? What makes your clients trust (or doubt) you? What concrete proof or tangible results back up your claims? If you can't tell prospects why they should believe you, in terms that are relevant to them, they won't wait for you to figure it out. They'll continue shopping until they find an expert they can trust; who they're comfortable buying from; who understands their needs; who they're convinced will deliver what they promise.

Excerpted from MIBOSO's Authentic Personal Branding Program (Copyright 2008) by Rosemary Davies-Janes
authenticpersonalbranding.com

I agree with John Jantsch.
What also erodes trust is outright lying. For example, displaying other people’s work in your portfolio and claiming it as your own.
My company, Babyface Interactive (http://babyfaceinteractive.com), is a small development company just outside New York City.
It was brought to my attention that an eLance provider named "Software Development Company" (http://www.elance.com/s/emailismail/) is displaying one of our sites in their portfolio (http://www.elance.com/samples/drupal-cms-projects-drupal/23646510/?setid...).
My client, Sheer Print Solutions, brought it to my attention, asking me what the deal is - perhaps thinking we farmed the development of their site out to India.
We developed and launched the site January 2010 (http://sheerprintsolutions.com) and, while I have occasionally used eLance providers for other projects, there were absolutely no third-party developers used on the Sheer Print site and there is no way this provider could have “accidentally” used my site as an example of their work.
Using another's work as representative of your own is an egregious violation of every ethical standard of business conduct.
It diminishes eLance's reputation as well as all involved.