How Clients Buy: Knowledge Asymmetry & Credibility Markers

Selling an expert service is much different (and harder, too) than selling a tangible product.  Clients experience much greater risk in hiring a an expert than in buying a tangible product – even when the tangible product has a steep price tag.  The key difference lies in the gap between ‘what is’ and ‘what could be’.

Naturally, this risk goes down each time we subsequently help a client solve an important problem, but the perceived risk is high when we serve a new client because we have not yet earned their respect and trust.  I examine this topic in several recent blog posts, and Tom McMakin and I discuss this topic at greater length in our book, How Clients Buy.

One of the reasons for a client’s perceived risk in hiring an expert lies in knowledge asymmetry – and one of the ways clients strive to mitigate this risk is through credibility markers.   Knowledge asymmetry manifests itself as….

The uneasy feeling we get in our gut when we need an expert’s help, but we don’t know enough about our problem to know if the expert’s diagnosis and proposed solution are any good.

Each of us has felt this before.  Maybe when our car wouldn’t start and we had to take it to a mechanic.  Or, our laptop crashed and off we went to the local computer repair service. Or, we had a odd rash on our arms & legs and we scheduled a visit with a dermatologist.  Whatever the case, we often have no clue what the issue is or even how to begin thinking of a solution.  And, in such cases, the person sitting across the desk from us presumably knows much more than we do about our problem and potential solutions.

In situations like this, we often feel uneasy.  I know whenever I’m in this boat, the well worn Latin phrase caveat emptor (buyer beware) keeps flashing through my mind.  When the expert offers the diagnosis and subsequent solution, we are in a position of knowledge asymmetry and are forced to take a leap of faith.

Taking a leap of faith feels risky to us.  We don’t really know if the problem identified is truly the root cause of our problem, or if the proposed solution will fix it.  Or, if the fees charged to fix the problem are fair and reasonable.  All in all, it’s an uncomfortable feeling, and we often are forced to take a deep breath and jump.  Or, maybe, we get a second opinion.

When we find ourselves in situations of knowledge asymmetry, we look for clues to an expert’s credibility.  Academics call these clues credibility markers: things we search for and cling to that give us a feeling of security.  In some cases, experts are required to be licensed: attorneys, accountants, doctors, etc.  These are the easier scenarios.  We can easily look to see if they are a member in good standing of their professions (member of the state bar, or a licensed CPA, etc.).  In many professions there are few, if any, certifications: strategy consultant, web designer, etc.

In the absence of professional certifications, what are the clues we often look for in validating an expert’s professional competence?

  • Does their website look professional? 
  • Do they look and act the part?
  • Are their past and current clients similar to us? 
  • Have they solved similar problems to ours in the past? 
  • Do they have credible testimonials and references? 
  • Are they perceived as experts by others in the industry?
  • Do they speak at industry conferences, or
  • Are they quoted in the media as a subject matter expert?

Understanding how clients feel in situations like this requires empathy.  By placing ourselves in our client’s shoes, we can better understand the risks that they feel.  In understanding knowledge asymmetry, we are in a better position to help address client concerns.  We can ask ourselves, what are we doing in our own practice to provide credibility markers – to demonstrate our professional competence?

I hope that reflecting upon these topics helps each of us improve our capacity to empathize with our prospective clients, and demonstrate more effectively our expertise and capability.  And, as a result, help reduce the uneasy feeling we all feel when we’re sitting across the table from someone who knows much more than we do about our problems. And, ultimately, to have greater success in winning client business.

If you’re interested in more discussion on this topic, check out Chapter 12 in How Clients Buy (Element 4 – I Respect Your Work: You Have the Right Stuff to Help Me). Good luck and best wishes.

Doug

 

2019-03-03T18:40:19+00:00

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