Win with TRUST, not Low Price: How to Sell More, Raise Prices, and Increase Loyalty
In one of my surveys, I asked about the most important quality for people in other people they must rely on. On average, across six types of relationships, trustworthiness was the most important quality 61.2% of the time. The highest was for salespeople, 77.4% (followed by spouse with 77.2% and a far third boss with 60%). Three of four respondents stated that trustworthiness was the most important quality of a salesperson trying to sell them something.
So, I decided to see if people were willing to “put their money where their mouth is” and test if there was an actual premium for trustworthiness. In a second survey, I described a scenario where two salespeople bid on a $10,000 home renovation project. Without using the words ‘trust’ or ‘trustworthy,’ I described one of them as trustworthy and the other, well, not so much. Then, through a series of questions and calculations, I reached the following conclusions:
Everything else (including price) being equal, people would buy from a salesperson they trust 100% of the time (when the alternative is from a salesperson they don’t trust).
A trustworthy salesperson, selling against an untrustworthy one, can sell the same product or service for a 29.6% higher price and still close the sale.
An untrustworthy salesperson, selling against a trustworthy one, would have to discount their prices 22.8% just to still be considered.
The trust premium doesn’t always exist. Multiple factors affect whether customers will put a premium on the salesperson’s trustworthiness and how much. Those factors include:
Potential Negative Consequences
The more severe the potential negative consequences of placing your trust in an untrustworthy salesperson are, the higher the trust premium. Relying on a financial advisor with all your money would have severe consequences if you were wrong and thus would warrant a high. Investing 1% of your net value will not warrant a high premium.
Reliance on the Salesperson vs. Myself
Knowledgeable people often conduct significant online research, read consumer reports, and compare specifications before buying a new TV. For them, there is very little reliance on the salesperson's knowledge. In fact, they often know more about the product than the salesperson, and the latter fills the role of no more than an order taker. If they can’t buy the TV online, that is. For people who are less technically inclined, relying on a salesperson who knows more than them is essential, and therefore, they would put a higher premium on their ability to trust that salesperson.
The question to ask here is, can I prevent, stop, or recover from the potential negative consequences of trusting a salesperson I shouldn’t have? Can I know enough to not engage in the transaction before it starts? Can I stop the negative consequences early on? Can I recover from them such that they are not as severe? The more I can rely on myself, the less I must rely on the salesperson, the less I must trust them, and therefore the lower the trust premium is.
Sales situations can be categorized as transactional (a single transaction) and relational (leading to or part of an ongoing relationship). In a transactional sales scenario, the trust premium might be lower, mainly because we would believe that the salesperson is highly motivated to complete this transaction and is not looking after my interests more generally. In a long-term relationship, such as with a financial advisor or an insurance broker, customers tend to put a higher premium on the trustworthiness of the salesperson who represents the company to them.
How Trustworthy are Salespeople?
While in my survey, I found that the average premium for a trustworthy salesperson is 29.6%, in some circumstances, especially with severe potential negative consequences, high reliance on the salesperson, and long-term relationships that premium could be significantly higher.
One would think that with having such a high trust premium, salespeople would work hard to be trusted. Hubspot conducted research in 2016 to measure trustworthiness of different occupations. While they found that doctors and firefighters were considered the most trustworthy (With 49% and 48%, respectively), salespeople (in general) and marketing people were close to the bottom with 3% each, above politicians, car salesmen (still a type of salesperson), and lobbyists. The problem is even exacerbated by salespeople not realizing that the are not trusted. Consulting firm Price Waterhouse Coopers found in 2022 that while 87% of business leaders believe they and their companies are trusted by their customers, only 30% of the 2,500+ customers surveyed agreed, a 57% gap!
What Makes a Salesperson Trustworthy?
The same relative trust model that applies to trustworthiness in every relationship also applies to salespeople. The six components of the model are:
Positivity (no BS and empathy)
But beyond that, two of the eight laws of trust play a significant role as well:
The transferability of trust: What do you know about the salesperson and the company? Have you seen customer reviews? Have you received a positive recommendation from someone you trust?
Trusfulness: our individual willingness to trust people in general, salespeople in particular, and specifically the type of salespeople we are considering at the moment (care salespeople, investment brokers, event photographers, etc.) and what the general “consensus” is about the trustworthiness of that type of salespeople (think used cars salesmen).
With the increase in the pervasiveness of spam and scams, as well as salesperson-centric sales pressure and marketing techniques, the overall level of trust in salespeople is declining, leaving a significant gap between how trustworthy salespeople believe they are and how trustworthy their customers perceive them to be.
This is a great opportunity. Not only can you win business by being a trustworthy salesperson, but a premium is paid at higher prices when the customer knows they can trust you.
Want to hear more? Listen to the podcast episode at: https://podcasts.apple.com/us/podcast/s10e8-win-with-trust-not-low-price-how-to-sell-more/id1569249060?i=1000625251922
Dr. Yoram Solomon is an expert in trust, employee engagement, teamwork, organizational culture, and leadership. He is the author of The Book of Trust, host of The Trust Show podcast, a three-time TEDx speaker, and facilitator of the Trust Habits workshop and masterclass that explains what trust is and how to build trust in organizations. He is a frequent speaker at SHRM events and a contributor to HR.com magazine.
The Book of Trust®, The Innovation Culture Institute®, and Trust Habits® are registered trademarks of Yoram Solomon. Trust Premium™ and The Trust Show™ are trademarks of Yoram Solomon.