Why do economists care about trust? It is a strange metric but it is unlike the other ‘hard figures’ we rely on to measure the success of the economy, such as GDP.
If there is trust, there is high employment, high wages, high growth. When trust is missing – you can bank on the opposite. Economics is a social science – a field that recognises a balance between the rational methodology of systems, and the chaotic behaviour of humans.
Trust as an X-Factor
It is an x-factor whether you are running countries or a real estate business. Given the impact that trust can have on growth, it seems worth a study on how to increase it as a driving force in your real estate practice.
Trust vs Transparency
The digital world has enabled greater levels of transparency – think about how you can watch your Uber driver approach; how customer reviews are available to validate the promises of marketing; and even the sold section on realeastate.com.au which displays sold prices to consumers.
While technology has made all of this transparency available and enabled the trust to thrive in an economy, it is important to understand the impact that has had on other institutions of trust.
Australia, in particular, has seen some serious knocks in the traditional institutions of trust in the 21st Century.
Believe it or not, there was a time when Australians trusted politicians – believed in public service as an institution of public service. Then a series of unelected Prime Ministers took the power of leadership away from the people.
A couple of Royal Commissions also brought religious institutions into shame and our financial institutions into disrepute.
The world order was broken, it had lost our trust, and suddenly the government couldn’t convince Australians to download the Covid-safe app with a fraction of the data collection that they are otherwise happy to surrender to Facebook, Amazon, Apple, Google and Microsoft.
One exception to loss of trust has been doctors and that is because doctors still maintain technical and specialist knowledge that is available only through their experience. Sure customers can google their symptoms (never a good idea) but it is still up to doctors, and the ancillary medical professionals such as radiologists and pathologists to interpret, test and confirm.
We also trust medical professionals because of an experience of care and continuity of care. Many people have a regular GP that they see for decades and so there is a medical history established – and an established history of service.
Think about the people and the brands that you trust in your life. Why do you trust them? It is probably not because you receive an e-newsletter or a yearly Christmas card.
Like with the family doctor, it is usually because there is a history of service, built over time. During that history, trust gates are lowered. Confidential information is shared, enabling a more personal interaction, and if confidence is maintained – trust inevitably deepens. The thing about trust is you can’t buy it and you can’t fake it.
Trust Creates Advantage
The property owners on your database are not actually owned by you. Firstly, they may be in the database of multiple real estate agencies. They handover their emails and phone numbers and consent to agents contacting them. Customers trust you with their personal information so that you can use it to create and maintain a relationship of trust – providing a service – keeping them updated with the movements of the marketplace where they own or would like to own property.
If you have built trust when other agents have wasted that opportunity by not investing into the relationship. If you maintain that relationship, then you are positioned to win the business when it comes time to sell.
The trust you have built is a distinct competitive advantage – what would beat it in a competitive appraisal scenario? A significant reduction in fees? Free advertising?
There is a cost to the absence of trust.
So there can be no surprise that the presence of trust is fast becoming the world’s most sought after economic power.