In our new book on Credibility we’ve been looking at how Credibility impacts an organization’s bottom line. Here’s what we’ve come up with:
- Shorter sales cycle/Higher closing percentage
With high levels of credibility, your customers don’t feel the need to do as much research, checking, thinking about purchase decisions, etc. as they might otherwise feel they need to do. Trust is already established and this reduces the second guessing and doubt. Ultimately the sales cycle speeds up and the closing percentage increases. - More likely to attract and gain higher quality customers.
With increased credibility, you are able to step up and swim in a larger pool. We see this often play out in the financial services industry. The higher the credibility the more likely you are to attract larger clients with more assets. This is true in all industries. Think about the automotive industry. Look at Lexus. High credibility and ability to attract a more affluent clientele. And it’s not just affluence that comes with this, but also loyalty. Apple – ditto. Fierce loyalty in spite of higher price points. - Get more opportunities and “first in” opportunities
You’ll find yourself on the short list, getting calls and requests to bid on choice projects, rather than being forced to seek out potential projects and wading through tedious administrative procedures. - More likely to get referrals and introductions
The more credible the organization, the more likely customers are to refer other customers. In a B-to-B situation, those likely to be giving the referrals are likely to have the Driver personality. Drivers will give a referral, but only after vetting the firm and making sure the firm will: 1) perform outstandingly, and 2) make them look good. When you make a referral you’re giving away part of your relationship credibility so you’re likely to do it when the firm is highly credible. - The more credibility your firm has, the greater the borrowing power and more likely you are to attract investment money.
Investors are more likely to invest in a company that is credible and can prove it, a company who’s financial projections are not only believable but a company the investors trust to honor and grow the investment. Without ample credibility, investors will automatically be suspect. That’s called a “negative halo effect,” where the expectation is not optimistic from the get-go.Credibility is also a key aspect of borrowing power. Even though borrowing is more about the numbers, especially now, given the financial meltdown of the last couple of years, the ability to borrow is still based on credibility. Think about it – when a loan application is rejected, it’s not so much about the application per se, but rather, the applicant’s credibility. The bank doesn’t believe that repayment will be made. But when it is accepted, what is the bank trusting? - Less likely to be damaged by occasional negative press
When you have credibility, it serves as a kind of buffer, like a Credibility Account with a line of credit. You get the benefit of the doubt. You’re more likely to be forgiven when you make a mistake because of this “halo effect.”As we write this, Toyota is testing its credibility and its own halo effect. Toyota customers are loyal – to a point. And the tipping point might be the honesty and integrity of the company. If the company has been forthcoming, then it will likely keep most of its customers. But, if it turns out that the company attempted a cover up, then the firm will more likely lose many of its customers because it will have sacrificed its credibility. - Likely to attract and retain higher quality talent
Employees want to work for an organization and leaders who are perceived as credible. We know that if you get a couple of really talented, quality people on a team it ups the odds you’ll get more talent on a team because talent attracts talent – in the same way success attracts ever higher levels. It’s a circle – The more credible the employees in the organization, particularly those in key positions, the more credible the perception of the overall organization and the more likely the organization is to attract other credible, top tier talent. - Likely to attract higher quality vendors and partners
In much the same way that you are able to attract top tier employees, you’re also able to attract higher quality vendors and partners. If you’re the larger firm, and have greater credibility, you no longer have to argue (as much) over peanuts. Higher quality vendors will seek you out. If you’re a vendor, you gain credibility by association with a larger enterprise. Higher quality enterprises will seek you out. - Better pricing
Often companies are willing to work for highly credible big name firms for less money in order to reap the benefits of the association. We (AboutPeople) did work with Microsoft at a much lower rate than we typically charge because we knew the association would provide us with increased credibility and we’d be much more likely to attract other high quality firms. - Customers, vendors and partners pay their bills on time
In several of the items above we talked about the power of association. Companies work for less because they want to be associated with and gain from another firm’s credibility. Credible firms attract credible talent and vendors. The same principles are at work when it comes to people paying their bills. If a company is credible and accountable, which includes paying their bills on time, chances are the firm will attract customers and vendors who do the same thing.