Market Trust

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Many believe a marketing program is successful if it raises the public's awareness of your product or service. Coach Roland in a May 31,2009 blog posting points out that we all have become saturated with messages trying to raise our awareness. Awareness alone won't lead to sales. He asserts our messages need to communicate what we intend to do to earn the market's trust. We have to do more to really get their attention.

Mature successful firms get most of their business from repeat customers or referrals from satisfied clients. Trust has been earned in prior dealings. Here the driver of continued success is the customer service staff. They are the guardians of market trust and need to be in close contact with the marketing staff. Social networking is providing marketing with a new generation of tools to measure customer service effectiveness and satisfaction. These departments work together to preserve existing trust.

Newer and smaller firms, more likely to be run by an Active Investor, may not have this kind of staff and or large base of past customers. Trust needs to be developed. How can a business reach out to the market in such a way that both trust and awareness are developed? A system dynamics approach is to look at trust as a resource, that is a stock of something that has a level that can go up and down, and then consider what are the drivers that will increase its level. Some rather universal drivers of trust are:

- Credentials: Are there authoritative "seals of approval" we can display to verify quality or competence?
- Appearance: Is our offering presented in such a way it creates an assumption of worth, or do we look mediocre?
- Recommendations: Do we understand and develop a history with those who may not purchase but still be in a position to recommend us?
- Concern: While Active Investors are typically always concerned for their customers, is this expressed in a way they can appreciate it? Do they feel we have really listened?
- Familiarity: Can we be remembered? Familiarity breeds business.
- Integrity: Is trust built into our business and personal decision making? Nothing develops trust more surely than personally being trustworthy.
- Assurances: Is there historical data or performance guarantees to factually support any measure of trust a prospect is considering granting us?

Each business is unique with its own ways to build trust. They are to be found at decision points where there is an opportunity to do the right thing or to be expedient. When you have first convinced yourself you'll always be doing what's best for your customer, you'll know what to do to further develop market trust.

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Properties of Value - Powerful, Gentle, and Repetitive

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The forces that create commercial value in a business have the same properties as those that create natural wonders. We find them to be Powerful, Gentle, and Repetitive. Erosion from the Colorado river is is neither loud nor threatening, yet it created the Grand Canyon.

There is no doubt that Bonnie and Clyde created cash flow with their business; however, it was cash flow without any Value for others. Contrast that to to their contemporary, Henry Ford. He neither invented the automobile nor forced the public to buy them. His genius was understanding how industrial-age forces could make them affordable. Year-by-year, model-by-model, plant-by-plant he built an organization that produced at lower and lower unit cost. It was powerful, gentle, and repetitive. Today this organization may become the last solvent US automotive manufacturer.

This is the kind of Value every Active Investor seeks in their business or profession. It starts with a sense of something that is Powerful. The Value to others (which translates as the real value of ownership) is directly related to where this sense of Power is located. Personal power produces cash, but not lasting (or salable) Value. Process or Organizational power produces both. Real power that addresses real needs doesn't require Force to permeate a market. It can be Gentle, as long as it's Repetitive.

Consider the activity of closing a sale. Is your product or service Powerful, that is does it use a proven process that will surely address a prospect's core need? If it does, getting to a close is a matter of communicating that value. This may take some repetition. It's not forceful; but its probably going to take several "messages". Here are the properties of value forming a powerful, gentle, repetitive closing process. Every really valuable business process will be similar in nature.

Our job, as Active Investors, is to be continually aligning with these powerful, gentle, and repetitive forces as they apply to our situation. The degree of our ultimate success is based on it.

Crossing a Mental Divide

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A traveler crossing the Rocky Mountains passes the Continental Divide. If they straddle this imaginary line they have an enormous, yet unseen power. Water poured on to the ground on one side will ultimately flow into the Pacific. Water poured inches away will flow into the Gulf of Mexico. This seemingly insignificant change will mandate the end result, regardless of all that happens to the water on its long journey.

This sensitivity to initial conditions is a common characteristic of natural systems. We are used to thinking about systems in more simplistic ways. A pendulum will ultimately come to rest at its lowest point, regardless of where the motion is started. There is no sensitivity to the initial conditions. It's an esy system to understand.

Because the motion of a pendulum always ends at a point, its dynamics have been called that of a point attractor. The end point doesn't attract like a magnet; but it acts that way. Next in complexity are two dimensional periodic attractors that don't end in a point, yet always repeat the same cycle. The rotation of the earth around its axis creates a daily periodic attractor. Adding a third dimension increases complexity again. The additional rotation of the earth around the sun is expressed as a torus (doughnut) attractor, which is what it looks like.

Those are the easy ones. What happens if more than 3 forces (dimensions) are in play? For most of history, these were called chaotic. They seemed to be beyond pattern or properties because of their complexity. Recent advancements in computers have enabled mathematicians to demonstrate this was a bad term. These systems do have properties, although some, like sensitivity to initial conditions, seemed strange at first. They have been called strange attractors and although they are extremely hard to visualize, understanding their emergent properties help us understand how the world really works.

Learning to appreciate both the order and the complexity of natural and social systems takes you across a mental Continental Divide. It is the single difference between developing a simple business solution versus a simplistic failure. An Active Investor develops a sense of caution and mental red lights begin to flash when any answer appear to be too quick and easy.

Constellations are our Motivations

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There is always a special moment when my younger daughter and I look up into the night sky together and see the bright cluster of 3 stars that form Orion's belt. I first showed her Orion over a decade ago and each time we see it a part of that father-daughter moment returns. It's what being alive is all about.

But in reality, there really is no Orion. These are unrelated stars light years apart that happen to form a pattern only when viewed from our planet.

Any social enterprise, like a business, can be understood as a constellation. It first takes an Active Investor, a business owner or owner-to-be, to see a new pattern that can meet people's needs. Previously unrelated resources flowing together in new ways.

Orion has a story. In mythology Orion, the Hunter, was in love with Merope, one of the Seven Sisters who form the Pleiades stars. She would not return his love and his already tragic life was ended when he stepped on a scorpion. Feeling sorry for him, the gods placed him in the sky near his faithful dogs, adjacent constellations, and on the opposite side of the sky from the deadly scorpion.

Each business has a similar story. Something that inspired the founder to start. Often a picture that could only be seen from their perspective. To everyone else, it was just a group of unrelated elements.

It's sad when this constellation story gets reduced to a just "mission statement". The inspiration of the story gets objectified as financial statements and business plans. When trying to value a business we deal in these valuable instruments; however, they only represent the passive side of any business investment. What makes the organization successful is the power of its invisible but very real story.

Being a part of a powerful story is also a part of what being alive is all about.

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