You're a start-up and you haven't done anything yet, so why should anyone believe in you? Classic research suggests how to convince them.
Why should anyone believe in you or your company? Even if you have a great idea and a fantastic team, why should anyone trust that you'll build those resources into something great? In short, how can you convince customers, investors and employees to take a chance on you?
A classic bit of psychological research suggests the answer—or, rather the six answers. The book is Influence: the Psychology of Persuasion, in which renowned psychologist Robert Cialdini identified six key principles of building personal credibility. They provide a roadmap for entrepreneurs seeking to convince stakeholders they’re the real deal.
People are more likely to do something if they feel like they’re returning favors or repaying debts. So, as an entrepreneur, offer small giveaways to potential investors or other stakeholders. Email them an article they'll find interesting, introduce them to a potential customer or make legitimate suggestions that might help their business. Over time, many will likely factor reciprocity into the decision to become a customer.
People respect others who honor their commitments. So, meet your milestones. Arrive on time. Do what you say you will do, and gently remind people that you always come through. Deliver on small promises, and you’ll be in a better position when you start asking customers for larger commitments.
Humans look to others for information about the desirability or usefulness of a product. (So please, click the Facebook, LinkedIn and Twitter buttons to the right of this column if you think it’s helpful!) When we wrote our new book, Breakthrough Entrepreneurship, we asked for feedback from a number of respected entrepreneurs, executives and academics. We then asked them to write brief “blurbs” to endorse the book. Of course, we now hope potential readers might judge the book as more credible because of these endorsements.
Customers want to know that the pain relievers they use are the same ones that top athletes use after games. They also make purchasing decisions because “four out of five dentists surveyed” think it’s a good idea to chew their brand of sugarless gum. So try to become the expert or authority in your field. Give a speech, write a white paper, and keep a blog. Also, borrow authority by recruiting other figures to endorse your product.
There’s a reason why the hostess at a restaurant is almost always an attractive young woman, and why car salespeople insist on calling you by name. The more that people personally like or are attracted to an influencer, the more likely they are to comply with a request. So be genuine and likeable. A true entrepreneur believes he or she is honored to help customers solve their needs.
People want what they can’t have. You can force their hands a bit by offering products or services for a limited time only. Consider raising prices instead of discounting. The diamond industry has done this to great effect. Diamonds are not the scarcest gemstones, but massive marketing campaigns have convinced people they are rare and "forever.”
Today, it’s easier than ever to become an entrepreneur. Launch a quick website, order a few hundred business cards, and you’re ready to go. Now that it’s so easy for anyone to launch a new venture, you need to make sure you communicate to customers that you’re the “real deal.” Follow Dr. Cialdini’s framework, and you’ll significantly increase your chances of success.
JON BURGSTONE was co-founder of SupplierMarket, acquired by Ariba for $1.1B. He now teaches at Berkeley, where he helped launch the Center for Entrepreneurship & Technology. He is co-author of Breakthrough Entrepreneurship. @jburgstone
BILL MURPHY JR. is a journalist, ghostwriter, and entrepreneur. He is the author of Breakthrough Entrepreneurship (with John Burgstone) and is a former reporter for The Washington Post. @BillMurphyJr