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December 16, 2008

Trust Metrics

As I am working on the new book, “Bank on it !”, it is becoming clear that the success of any endeavor, project, company or career is indelibly linked to the level of trust they can build up in the marketplace.

The more I look back at my career, or the careers of my mentor or business heroes this stands out as the defining element.

Easy to know, harder to practice, and even harder still to know if it’s working.

In the new book I have developed a range of metrics (because I’m a consultant and we do that sort of thing) to measure the value of your Trust Account.

Of them all the king is repeat work. I calculate that a trusted advisor should be able to generate a 70% strike rate in terms of repeat work.

Repeat work is the ultimate in trust. It shows that clients, after showing a willingness to trust you in the beginning, were satisfied with the results and actively decided to give you more work.

They trust your character, and more importantly, they trust your ability to give them value. In fact, I think that 30% is a good measure of how much of your current revenue stream should come from repeat work.

A second is referrals. Are you generating at least 20% of your current revenues as a result of referrals?

Customers that came to you because of your auto-referral assets. Things like articles, newsletters, your blog, your interviews, conferences and other media activities.

The other source of referrals are passive referrals. Those that come from your clients and ex-clients.

The last one that really gets me going is your quote strike rate.

Of all the quotes you submit, how many result in work?

If they are willing to take you from quote to contract that shows that you have developed a relationship based on trust. Not just a sniping approach to picking off clients.
  • They trust your track record.
  • They trust your character and think you to be a person who will do what you say you will do.
  • And they trust your ability to deliver what they need at that point in time.
Are there other things? Sure. Maybe they don’t have the money, maybe they don’t have the authority to sign the contract and maybe things have suddenly changed.

These are all other areas, but all in all I find that a strike rate of 60% of all quotes turning into work is a positive sign.

What is your Trust Account worth?