Mar 15, 2011

You Can Only Lose Credibility Once

Losing your credibility is like losing your virginity. You can only lose it once.

My friend Jim Stewart shared this line with me, and it immediately resonated. Credibility is essential for your brand. Without it business grinds to a halt.

Your credibility is based on two components: trustworthiness and expertise. Both are essential for your brand and your reputation. If your customers don’t think you have the expertise to solve their problems, they won’t buy. And if they don’t trust you, they definitely won’t buy.

Credibility requires an investment

Both trust and expertise take time. You don’t just become an expert overnight, and you don’t trust people just because.

Malcolm Gladwell popularized the concept of the 10,000 Hour Rule. The idea came from Anders Ericsson’s studies on expertise. Ericsson discovered that it takes 10,000 hours of concentrated practice to become an expert. The same principle can be brought to companies. A startup does not have the same level of expertise as a well established company.

The more a company invests in its products, systems and talent the more effective it can be. As the old adage goes, the proof is in the pudding. You might be able to “sell” your customers once, but you won’t keep them if you don’t deliver. And if you don’t deliver, your credibility will be shot.

Trust on the other hand is built through customer experiences and relationships. Every customer interaction, no matter how small, is an opportunity to establish trust. By being consistent, predictable and ethical you form trust. The more your customers get to know your business, its values and your people the more they will trust you.

When mistakes happen, step up

Mistakes happen. We all know that. It really boils down to how you go about fixing them. Most of the time your customers will give you the benefit of the doubt, and will work with you to get a problem resolved.

Credibility is lost when you don’t handle issues well. This can happen in two ways: lack of accountability or incompetence.

Lack of accountability is the worst. I find it infuriating when companies refuse to acknowledge their mistakes. Often times a simple “sorry” is enough. When a mistake happens, step up to it. Acknowledge your mistake, and tell your customer how you will work to resolve the issue. You might not have the answer right away, and that’s ok. The key is to make an effort to resolve the issue.

Incompetence is a little trickier. Incompetence is often tied to lack of brand focus and poor operating systems. Chronic mistakes just whittle away at your credibility until nothing is left.  It’s not easy to lose your credibility. Most customers will give you the benefit of the doubt. But screw up often, and you really won’t leave your customers much choice.

Your credibility is something to cherish. Manage it. Protect it. Hold onto it as a key aspect of your brand and your company’s reputation.

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