Yesterday, I met for the first time with Stephen Bozarth, a local IT vendor who services a mutual client. I hope and expect that we’ll partner on quite a few future clients, as his IT services are a natural fit with our digital marketing services. In the course of feeling each other out, it became apparent that he values his personal and professional reputation more so than any other aspect of his business – including finances. We spent an hour talking and by the end of the meeting, I realized that we shared that sentiment that our reputations are paramount – even though I’ve never articulated it to myself in that way before.
Then I saw the news about Jared Fogle pleading guilty to some pretty heinous charges, and got to thinking about how pervasive and powerful reputation is – and why that is.
Human beings are wired to operate on reputation. As animals, we’ve evolved highly sophisticated brains that make snap judgments based on first impressions, reputation, and our surroundings. Initially this adaptation kept us alive (lions have a reputation for eating us, never trust a lion). Now we use it everyday when deciding which profiles to swipe right on, which restaurant to try, which attorneys to hire.
Your reputation, to a large extent, is impersonal, sliced, diced, and automated. Think about where you live, what car you drive, how much you pay for insurance – all are governed by large databases that distill your financial reputation to a single number that’s embodied in your credit score. Yelp, TripAdvisor, Avvo, and other review sites have the power to dramatically affect your business with the click of a mouse – as Harvard Business School’s famous Yelp study demonstrated with its findings that a one star bump can increase a restaurant’s business by 9%. It’s a bit frightening how much control semi-anonymous individuals can have over your business. Such is the raw power of reputation.
It didn’t always used to be this way. Up until the mid 1950s, virtually every aspect of reputation was personal. As a business owner, you developed a relationship with the local banker, who knew you through the chamber of commerce and personally approved your loan. You did business with your friends and other chamber members, and advertised extensively to create a reputation among those who didn’t yet know you.
Now, the world is a lot smaller than you think. By way of example, Mayflower is based in the Raleigh area, which by most estimates has over 2 million people. And yet, it still feels like a very small town. Most of our clients know each other. My former business partner knows just about every mover and shaker under 40. My girlfriend and I are always running into friends, clients, and co-workers when we’re out and about. What we do – personally and professionally – gets around very easily just based on our community. The reach of Internet and social media tremendously amplifies your reputation. It’s almost assured that your potential clients will know of you, and everything noteworthy that you’ve done – both good and bad. Which leads me to the key points I want to make:
A great reputation is a powerful and ever-present tailwind pushing your business to growth. Based on my anecdotal evidence, I’d say that having a great reputation is 70% of closing the deal with a new client. Think about it for a minute – the market is full of qualified providers, so all things being equal, clients are naturally predisposed to work with those companies or professionals they’ve already heard of. Or, put another way – it’s easy to cover your ass in selecting a vendor if they have a great reputation.
On the flip side, having a bad reputation will limit your growth or outright kill your business. Ask Walter Palmer. Maybe you know him better as the hunter who killed Cecil the Lion. Rather than a premier dentist in the Minneapolis area, he’ll forever be known as the lion killer. Google never forgets. Potential clients searching for information about your business will find the unsavory details if they exist. And for licensed professionals, a ruined reputation can very easily lead to disciplinary proceedings that can derail or ruin a promising career.