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Trusted Transactions – Credit Card Processing

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Loyal Trust Matters reader Jim Bullock is author of maybe the best piece I’ve seen on the structure of negotiated contracts. It’s called “Chinese Contracts,” and I recommend it.

But Jim has a recommendation of his own to make: a small credit card processing business in Seattle.

Now turning blog control over to Jim…

Charlie, I came across a company I think you’d appreciate. Called Gravity Payments, they do payment processing for small to medium sized businesses. They are growing like crazy & profitable. They are interesting because of the way they do business.

Payment processing statements are opaque. The industry is built around a pretty big assumed churn, and a pretty high advertising- and marketing-driven cost of new customer acquisition. By offering transparency, essentially some consulting on what it all means, and limited guarantees on cost of service, Gravity Payments has much lower churn, and essentially word of mouth driven marketing leading to much lower costs of sale.

Because this gives them a typically longer (and I suspect less costly) relationship with each customer, they can charge less.

Thus, customers move over because they are dissatisfied with their previous service, and now can feel cared for. Then they stay forever because they also save money.

I haven’t given the trust aspect of this business enough play, nor have I done justice to how the need to be fair and do right shines out from the remarkable young founders of this company. I saw these guys at a business plan competition I went to (they took second place).

The thinking behind the business is crystal clear. I wasn’t expecting to find a couple guys trying to do well by an under-served segment, there in among the sharks.”

[Charlie re-taking blog control]

In an article on the founders – I’m struck by this:

Price says he and Gravity’s employees feel passionately about local businesses, saving their customers over $1,000 per year depending on the size and revenue of the business.

How does Gravity Payments choose employees? Currently employing 15 full-time employees, Price attributes their excellent staff to choosing employees using the method of axiology.

Axiology is a "branch of philosophy dealing with ethics and values." The Price brothers applied this idea to Gravity, taking a person and fitting a job to them rather than fitting the person to a job.

This attitude toward employee management is apparent as an integral part of how the Price family applies their values in the business world. Axiology was introduced to Dan and Lucas by their father, Ron Price. Ron Price is an organizational consultant working through his own business, Lifequest. His clientele include Hewlett Packard, Pacific Steel and Recycling, and First Bank of Idaho.

Axy, smaxy, whatever. Sounds like it works, and one can see why.

Thanks Jim for another case of the paradox of trust: do right by your customers, and they’ll do right by you. As long as you make it the outcome, not the goal.

 

Are You a Trusted Advisor?

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The phrase “trusted advisor” has almost become a cliché. Since I co-wrote the book on the subject, I have some standing to say that. And to say a few other things about it. So I think I will.

First, ubiquity. Today’s “trusted advisor” of popularity metrics—a google word count—shows “about 706,000." Digg—the new kid on the block—shows 292 pages at 15 per page, for a total of 4,380 entries.

But that’s just mentions. When it comes to assertions that so and so is, or wants to be, “your trusted advisor,” it gets interesting. Let’s start with the oddity of a website, declaring to the indeterminate masses, that its author is your trusted advisor. Brings to mind such chestnuts as “I’m from the IRS and I’m here to help you…”

But boldly going where many have gone before, a full 39,500 Google entries contain “your trusted advisor.” Who, pray tell, are these noble souls?

Well, would you believe Rudy Giuliani? The law firm of Bracewell & Giuliani (when he joined in in 2005 it was Bracewell & Patterson) pens a newsletter called Your Trusted Advisor. It’s about things like estate planning. (I wonder if Patterson trusted Rudy…)

There’s Morales & Associates, an insurance broker-dealer firm whose website is called YourTrustedAdvisor.com . The website (or Bob?) genially says, “Thank you again for visiting ‘Your Trusted Advisor.’” You’re welcome, uh, Bob.

FutureNow, a website design company, says, “An engine ‘hitting on all cylinders’ best illustrates the look and feel of the unique relationships we have with clients who have hired us as Trusted Advisors.”

Huh? You can hire trusted advisors? Apparently so. Craigslist has 80 job descriptions that contain “trusted advisor.” Tom Gegax says, “Retain Tom as your trusted advisor; Tom Gegax is a trusted advisor to CEOs and business owners around the world.” He must be, because he says so, and he’s a trusted advisor.

The Alberta Business Family Institute teaches a program called, fittingly, the Trusted Advisor Program. It “provides the skills and knowledge needed to enhance an advisor’s role to be the most trusted.” Hmmm, skills and knowledge. Kind of like getting a CPA, I guess.

An awful lot of financial people are your trusted advisor, but it’s not an exclusive club. GMAC Real Estate has 22,000 agents, one of whom is Brian Matthews, your trusted advisor.

You also have a trusted advisor in the feed business. And you’re in luck if you need someone to trust in broadband services.

Nobody owns the term, least of all me. But for what it’s worth, let me offer a few thoughts.

1. The two most trust-destroying words you can say are, “trust me.” Never say you’re someone’s trusted advisor, much less say you want to be, much less build an ad campaign around it. It is inherently non-credible and insincere. (I try on my own website—which of course uses the term—to say "helping people become trusted advisors"—and not to claim that I are one).

2. Trust worth the name has a personal component to it. Impersonal trust isn’t quite an oxymoron, but if it relies on credibility or dependability alone, it has more in common with predicting the weather than with being a trusted advisor.

3. The deepest trait of a trusted advisor is focus on the other, not on oneself. Low self-orientation. Not in it just for oneself. Driven by connection, not competition. Someone who actually, really, genuinely cares—just because. Caring, I suggest, is at the heart of the matter.

Care to rate yourself? Take the quiz here. Don’t forget to click on the “interpretation” button to see everyone’s results, and my comments on the test.

What do you think? What is a trusted advisor? Is the term getting overused? And what does that mean for trust?

Insurance Fraud, Short-Selling and Why You Can’t Trust Stock Analysts

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8AM, July 17, 1989: I’m driving on Route 2 outside Concord Massachusetts, lights flashing and horn honking, fighting rush hour traffic. My son is nearly being born in the back of the car. We reach Emerson Hospital; nurses rush my wife to the ER; I park the car and run back.

Birth time: about one minute after reaching the hospital. Delivery: by the good nurses, a minute before the obstetrician on duty arrives to bless what’s now history.

Two weeks later, the bill arrives. It includes several thousand dollars for the obstretrician. I call to complain. “What do you care,” the office says, “it’s all covered by your insurance.”

9:20AM May 12, 2007: I’m flying from Amsterdam Schiphol back home, reading Joseph Nocera in the Herald Tribune, Why Short-sellers Should Have Their Say. Think of short-selling as the “opposite” of buying stocks—betting that a stock will go down, rather than up.

Since precisely 50% of stock trades involve selling, you’d think Wall Street would put roughly the same emphasis on when to sell as on when to buy. Of course, you’d be wrong. There are few short-sellers, and they are often reviled, harrassed, even sued.

Reasons often given for the dearth of short-sellers are that losses from short-selling are potentially unlimited (true), that short-selling goes against the long-term natural rise of the market (true so far), and that human psychology is basically optimistic (debatable). But those are weak explanations.

The real reason is—wait for it—money. Wall Street gains more when you buy and trade than when you sell. This is one reason securities analysts overwhelmingly issue positive, not negative, ratings. But there’s more.

Companies don’t like negative ratings. To be more precise, CEOs and senior managers of companies with compensation tied to stock performance don’t like negative ratings. Many leaders call the analysts’ parent company to complain, even issue veiled threats to switch to other providers of financial services. Even sue.

And voila, the analysts either withdraw the negative rating or just stop covering the company.

The analyst will blame management for telling him to emphasize positive reviews. Thus he justifies his lapse in professionalism: the devil made me do it.

The poorly rated company blames the analyst for “unfair” analysis (meaning it hurts the CEO in the wallet). Easier to blame the analyst than to take responsibilty for the shortcomings identified.

Management of the analyst firm also caves in, blaming the blackmail tactics of the rated company.

Fingers point everywhere but back. Blame instead of responsibility And blame feeds the rot.

Our social “solutions” propagate the problem. We opt for an expensive regulatory program like Sarbanes-Oxley, to protect everyone from their presumed innate selfish tendencies. Our approach resembles airport security—“somebody will always cheat: let’s constrict everyone’s freedom, in order to stop the few.” But securities markets are not airports.

Far from stopping a culture of blame-throwing, this approach enables it by assuming bad motives.

Instead, we should selectively prosecute the hell out of individuals who behave badly. Prosecute analysts who won’t honor their role, CEOs who blackmail bankers, and bankers who cave in, and who lack the guts to call the cops.

A vibrant community of short-sellers would have seen Enron coming. A few people could have spotted the lies, and made a lot of money by publicizing the rot—saving a lot of lifes’ savings and careers. An MBA class at Cornell did just that—analyzed the numbers and recommended shorting Enron well before it imploded. No one was listening.

Business has no right complaining about government intervention if it can’t bring to bear the pressure of capitalism upon itself. Greed and lies aren’t the stuff of business—they’re the death of business, as long as they stay in dark rooms.

July, 1998, Madison, New Jersey: I go to a collision damage repair shop.

“I’ve got a dent in the back door of my car, can you punch it out? It doesn’t have to be perfect."

“Nah, we’d have to replace the whole door.”

“No you wouldn’t—the gas station will do it for me for a hundred bucks, I figure you guys could just do a better job. It’s a simple job to punch it out, I’d do it myself if I had the tools.”

“Buddy—god alone couldn’t fix that door, we’ll replace it or do nothing at all.”

Translation: “what do you care, your insurance company is paying. And we’re not about to ruin a good scam by being customer-focused.”

We don’t have to put up with this crap. Call your better business bureau. Call your state regulatory agency. Call your insurance company. Write a letter to the editor. Rat these people out.

With the market in nosebleed territory, you might want to short a few stocks yourself. If your broker doesn’t know how, then help create trust and integrity in the market while you make money—by getting a new broker.
 

Hostage Negotiation – Lessons for Selling, Customer Service and Business Relationships

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Pierre Cerulus steered me to Hostage at the Table by George Kohlrieser, now a professor at IMD, and a former hostage negotiator. The metaphor of hostage taking is one of the best I’ve seen for thinking about leadership and personal development.

Are you a hostage? Or a hostage taker? Or—both at once?

Here’s a remarkable statistic—professional hostage-negotiators have a 95% success rate. 95% of the time they persuade potential killers drenched in adrenaline to change their minds.

Compare that with your success rate in closing sales or persuading clients. (And they’re not even homicidal. Yeah yeah I know).

Kohlrieser’s most compelling vignettes, however, are about amateurs. The lady in Atlanta who talked down her abductor. The grandmother who, with her 9-year-old granddaughter at her side, talked down the blood-drenched escaped convict who had killed a neighboring family minutes before entering her bedroom at 3AM.

The “trick” is to make a human connection with the hostage-taker. Simple to say, hard to do. This is one of the better books I’ve seen on just how to do it. For more—read the book.

Of course, we’re not likely to be in a hostage situation. But metaphorically—we are all the time.

Hostage-taking is an alienated act of desperation—a cry for help. The failing of most hostages, and most amateur hostage-negotiators, is that they cannot see past the threat to themselves, to see the desperation in the other.

Apply that to work. The angry customer. The resentful co-worker. The “gotcha” performance review. All are driven by states of mind others—which we choose to experience as personal attacks on ourselves.

We let them hold us hostage. But there are no guns here. Our response is within our control. It is not that they are attacking us—it is that we are feeling attacked. We own our own oppression.

In Mel Brooks’ hilarious Blazing Saddles, the sheriff faces a hostile mob. He realizes he can escape by taking a hostage—himself. Pointing the gun at his own temple, he shouts, “No one moves—or I’ll blow his head off,” then slowly backs out of the room.

That’s what we do, when we allow ourselves to be hijacked by the emotions of others; when we react to those emotions, rather than acting from our own true selves. We become hostage-taker, with ourselves as hostage; a double-bind, with no win-win possible.

But the angrier or more distressed someone is, the more they want to find someone to relieve them of that anger of distress – someone to care. Passion gives you something to work with.

The answer is the same in the metaphor as in life. See the person beneath the fear—first the customer/co-worker, then ourselves. Connect with that real person. Engage in a true dialogue.

It is the same principle that governs the creation of trust, and it disproves an old myth about trust—that trust takes time.

It doesn’t. It takes connection.

 

Welcome to Charles H. Green’s Blog: Trust Matters

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Let’s get right down to it. Here’s how to tell if this blog is right for you:

It’s a serious business blog—but done with taste, irony and wit.

It’s about building trust—for:

  1. Those who want to be trusted advisors
  2. Those who want to instill trust in their selling
  3. Those who want to enhance trust within and between organizations.

It aims at two extremes:

  1. Big picture thoughts on trust in business and society
  2. Very practical tactical advice for practitioners
  3. Not so much at the intermediate ground of programs and analyses.

My name is Charles H. Green, and I write this blog:

  1. I wrote Trust-based Selling, McGraw-Hill, 2005
  2. I co-wrote The Trusted Advisor, Free Press, 2000, with David Maister and Rob Galford
  3. I spent 20 years in general management consulting
  4. For 10 years, I have done seminars, speeches and consulting for large complex relationship businesses on the subject of trusted relationships

If this sounds good to you, then welcome! I’ll do my best to offer you a consistent diet of thoughtful, provocative ideas from my own work and from that of others. I hope you’ll chime in on the comments pages and contribute to a dialogue that raises the value of the site for everyone.