We intuitively understand that people’s actions are nearly always in accordance with their values. Someone who embraces fairness and treats other people honorably is likely to treat us honorably. Someone known to be dishonest has a higher likelihood of cheating us, as well.
And like our personal reputations, our companies have professional reputations, built on the experience customers have in dealing with our companies, along with their willingness to talk about those experiences.
Call it Word-of-Mouth.
Another name for professional reputation is word-of-mouth, which comes in three variants. From least to most influential, they are:
1. Awareness – Do I recognize any of these names in this directory?
2. Reputation – Have I heard of anyone who has the ability to help me with my problem?
3. Personal Experience – Do I have knowledge of, or experience with someone who can help me to solve this problem?
Each successive level takes priority over the lower.
At the Awareness level, simply recognizing the company’s name trumps never having heard of them. This is the weakest level of word-of-mouth. If you stay in business long enough, you’ll achieve some level of awareness. You’ll then have a slight advantage over some newer company that has yet to achieve any awareness at all. Why? With no other information to go on, shoppers will usually buy from the company they’ve heard of.
Awareness is largely a function of repetition. A customer notes your name on the outfield sign at the ball park. Hears your jingle each morning on the radio. Sees your banner ad on the Internet. Catches your sponsorship of the six o’clock news. Recognizes your logo on the pee wee league uniforms. If you’re part of the community, eventually people will bump into your name in the course of living their lives. The longer they’re aware of you without hearing specific negatives about you, the more generally positive this awareness becomes.
Small businesses like to advertise how long they’ve been in business, as if years of “experience” automatically translates to a benefit in the minds of shoppers. Unfortunately, shoppers have proven not to care. (Kind of ironic, isn’t it? All those years of doing business in the community have lead to awareness of your company – but the benefit is to you, not to them).
The next step up, reputation, beats out basic awareness. “Here’s what people say” is the next best thing to first-hand knowledge – provided of course people aren’t saying uncomplimentary things.
The size of the community is a factor, too. The fewer people in the population, the more likely a shopper is to run into someone with a story to tell about the business. Reputation is therefore a bigger factor in small communities than in large ones.