Why trustworthy salespeople can sell the same thing for almost 30% higher price.
I realize more and more that being trustworthy is really important. I know, not a big surprise there. However, I didn’t know how important until, earlier this year, I conducted a short survey. Specifically, about salespeople.
First of all, when I conducted my initial study, I asked people what are the most important qualities they care about in other people. I then narrowed the list down, and then I started a survey. The results were astounding. At least for me. I asked people what is the most important quality for them in a colleague, a boss, an employee, a salesperson trying to sell them something (not a salesperson working for them), a government representative, and their spouse.
I gave them 5 options, based on my initial research:
Willingness to work hard,
Willingness to take risk,
Yes, good looks! Hey, it’s my survey, I can put good looks if I want to! It did get the lowest score, though… Only 0.85%...
Another thing that might not be surprising to you is that the top quality, based on 351 responses, was Trustworthiness. Trustworthiness was ranked the most important quality in 60.7% of the responses. It was ranked number one 56% more times than the other 4 qualities combined!
Of the six types of relationships, the highest ranking of trustworthiness was in salespeople, where it ranked number one in almost 77%. 3 times as much as the other 4 qualities combined!
So we really think that trustworthiness is the most important quality in a salesperson trying to sell you something.
Let’s see if you are willing to put your money where your mouth is…
I conducted a second survey. In the second survey I posed the following scenario: you have a home renovation project, estimated at $10,000. You know how fun those can get…
You did your research, and narrowed down the list to two contractors, and you invited both of them to come over and give you proposals.
Contractor A is represented by the owner of the company. He has been in business for 20 years. He has good reviews online. He listens carefully to what you need, makes suggestions, and even prevents you from ordering what you don't need, even though he could make more money. He seems to be doing a very thorough job measuring and estimating the work to be done. In other words, he impresses you as being trustworthy.
Contractor B, on the other hand, is represented by a slick salesperson, not the owner, who appears very motivated to close the deal with you and make his commission as quickly as possible. He spends time trashing his competitors. He doesn't seem to be listening to you much, and appears very arrogant. In other words, he impresses you as being untrustworthy.
The price both are asking for is $10,000 for the job, and there are no differences in what they are offering for that money. Which one would you hire to do the job?
It’s not a trick question. I asked quite a few people this question in person, and they paused, trying to find the trick in this question. I had people tell me that “personally, I would choose…” Of course it’s personally! This is a renovation project at your home!
So, sure enough, you would choose the trustworthy salesperson.
But what would happen if the trustworthy salesperson asked for 10% higher price? 11,000 instead of 10,000? Would you switch? Your options are: (A) the trustworthy one, (B) the untrustworthy, (C) not sure, and (D) none of them.
Well, my study showed that 100% of those who chose the trustworthy salesperson when the price was similar, still chose him when his price was 10% higher.
What if his price was 20% higher? 12,000 instead of 10,000?
55.8% still chose the trustworthy one.
How about 50% higher? 15,000 instead of 10,000?
I was shocked, 21.2% still preferred the trustworthy one.
What was even more interesting was that 40.4%, even at this high a price, were not sure which one they would choose, but still didn’t say “none of them.”
So I took those numbers and put them in a formula, considering how many would be willing to pay 10% more, 20% more, and 50% more, and also how many were still not sure, which meant that there was still a 50% chance that they would choose the trustworthy one. The result is amazing, and I’ll put it in the two following statements. Pay careful attention:
A trustworthy salesperson can sell the same thing for 29.6% higher price.
Let me repeat that: A trustworthy salesperson can sell the same thing for 29.6% higher price.
It gets even better (or worse, depending if you are trustworthy or not…):
If you are an untrustworthy salesperson, you would have to discount your products and services by 22.8% compared to a trustworthy salesperson just to win some business.
Do you like leaving 22.8% on the table?
So, is it important for you, as a salesperson, to be trustworthy?
But I don’t want to scare you with the finding of these two studies, because there is a cure.
Over the past decade, I researched and developed a formula for building trust. This formula works for every relationship. It applies to building trust in a team (which was my initial focus), but it also applies to the relationship I have with my wife and daughters, and to the relationship that a salesperson has with a potential customer.
The good news is that there are only six elements you must work on to increase your level of trustworthiness: competence, fairness, shared values, time, intensity, and critical positivity. For more about hos to build trust and become trustworthy, check out our website at https://www.innovationcultureinstitute.com