Archives by tag ‘confidence’

The importance of credibility

By Jose on 19.01.2010 // 11:01 am in General
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Anybody who has worked in a Sales Department knows that a product is not everything: there are less tangible elements which can be determining when closing an operation. Maybe the most important one is credibility, since it is impossible to convince the client without it. This certainty can also be applied to entrepreneurship. At the end of the day, when an entrepreneur looks for funding or tries to find new partners, he is selling his project.

As MIT Sloan points out, the problem is that too many entrepreneurs focus almost exclusively on developing their business plan and leave out other tasks which are also important for the project’s credibility. These could be for example to keep an updated and adequate web page, to answer work e-mails and to look after the company’s image. The prestigious American business school carried out a study in order to determine which persuasion recipes do entrepreneurs use. They have discovered that the most successful entrepreneurs are those who inspire greatest confidence.

Many little entrepreneurs still solve the confidence issue through their business plan financial and technical aspects using these to cover shortcomings (specially related with experience). However, the study shows that it is more useful to focus on little symbolic effects which reinforce the company’s image of stability and credibility. All in all, credibility is about implementing a few basic product marketing strategies and finding a good packaging for the company.
Some of the tips they propose are widely used, such as holding meetings in places which suggest economic strength, using satisfied clients statements and dressing appropriately (even if it sounds basic). The study identifies four key areas in order to achieve investors’ confidence: personal credibility, company’s professionalism, experience (at least entrepreneurs’ experience) and recommendations and contacts network.

Naturally, it is easier to make progress on the two first key areas because it is on these areas where most of the entrepreneur’s main mistakes are made. The key is to approach this issue from a marketing point of view: the company and the entrepreneur himself are just products which need to be sold.

Image - Andrew Feinberg