The Value of Reputation

Your reputation precedes you, and that isn’t just a cliché. In a recent study, 93 percent of respondents reported that reputation is “very important” when choosing a vendor or business partner.

The study, conducted by marketing firm Porter Positioning, tabulated responses from 214 people in a cross-section of industries and professions. Though it wasn’t exclusive to the IT industry, the study included participants who are either in the industry or work with IT companies. Other industries represented included banking and finance, insurance, legal services, and travel and tourism.

Despite the general nature of the study, the results nevertheless point to the fundamental business truth that a good reputation increases your potential for winning business. Nobody wants to partner with a company that is difficult to work with, unresponsive to customer requests and uncommunicative.

Even though value for money often trumps everything else, word of mouth has always carried a lot of weight in the IT channel. Despite the staggering volumes of dollars that flow through the IT industry, it remains a relatively small community. That is especially true of the channel, where relationships effectively keep the business going.

People who have worked for vendors often end up at channel companies, such as distributors and solution providers, and vice versa. And it’s not unusual for people once employed in the IT industry to land jobs at end-user sites, and vice versa. And as they move from one company to another, people take their memories of colleagues and partners with whom they have worked. New partnerships between companies are formed, new customers are won, and the cycle continues.

I have often come across partnerships and customer relationships that resulted from someone having worked with someone else in a previous job, but I also have occasionally heard words to this effect: “I wouldn’t work with [insert distasteful individual or company’s name] if my life depended on it.”

Don’t underestimate the power of reputation.

The aura you create for your business becomes especially important during hard times. As customers tighten their budgets to accommodate a slowing economy, they will be less inclined to spend money with companies they don’t like to work with.

Reputation and recommendations from peers or partners didn’t rank quite as high in a February study by Ziff Davis Enterprise. Twenty-eight percent of respondents in that study named reputation and recommendations as factors with the greatest influence when choosing a generalist solution provider. The number, however, jumped to 42 percent in reference to specialist providers.

There is clearly a gap between those results and those of Porter Positioning, which is partly explained by the fact they were polling different audiences.

Value for the money topped the list in the Ziff Davis survey, with 62 percent naming it as a factor of greatest influence in choosing a generalist solution provider and, when selecting a specialist, 51 percent. Low price got a lowly 11 percent ranking, so value and price are clearly distinct measures.

Even so, reputation is key because providing value for the money contributes to the type of reputation you build among customers. Wrap good value with a reputation for responsiveness to customer needs and being easy to work with, and you have a winning formula.

Relationships being what they are, what people say about you matters. And as more clients start communicating through venues such as Facebook and LinkedIn, the reputation you build will follow you around and leave indelible traces in the ether.

Pedro Pereira is editor of eWEEK Strategic Partner and a contributing editor for The Channel Insider. He can be reached at pedro.pereira@ziffdavisenterprise.com.