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Trust me: gaining credibility with customers

Business Management

How do you persuade people to trust you when you don’t have a track record?

MIT Sloan Review | January 18, 2010

How do you persuade people to trust you when you don’t have a track record?

It’s a question every entrepreneur faces—and it’s especially critical these days as lenders and investors look for reasons not to hand over money. To figure out the answer, we interviewed key figures at 28 entrepreneurial ventures in the U.K., including founders, investors, board members, employees and customers.
 
What did we find out? Details matter. Many entrepreneurs are so focused on building the business or getting their product ready for market that they forget to do little things that send a message of credibility—such as making sure their Web site is polished and professional, or sending follow-up notes after a meeting with potential investors.
 
 
The Quandary: It’s tough to persuade people to trust you when you don’t have a track record—especially now that lenders and investors are looking for reasons not to hand over money.
 
The Missing Ingredient: Many entrepreneurs are so focused on building the business or getting their product ready for market that they forget to do little things that send a message of credibility.
 
Moves That Matter: In our study, the most successful founders were masters of symbolic gestures—from holding meetings in upscale venues to displaying industry awards on their Web site.
 
In our study, the most successful founders were masters at making symbolic gestures that signaled stability and credibility. They might hold meetings in upscale surroundings, for instance, or fill their Web page with testimonials from satisfied customers. Time and again, the entrepreneurs who practiced these tactics landed more funding than those who didn’t.
 
What’s more, this advice isn’t for entrepreneurs only: Executives from established companies could learn some valuable lessons here, as well. With investors more skeptical than ever, executives must use any resource to convince them that they can be trusted—no matter how trivial the tactics may seem to managers with long careers and long-existing companies behind them.
 
We found that there were four areas where the right symbolic gestures were vital. Here’s a look at those crucial spots—and what executives in businesses of all shapes and sizes can learn from them.
 
Read the full list here.

 

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