About a year ago, I was going through a rough period with WiseUp: I felt like we were doing really good work, providing good value for our customers, and treating our employees well.
We were doing the things that all those inspiring articles on Techcrunch and Business Insider preached… and it sucked.
Our competition was doing the opposite: selling “snake oil”, providing little value for the customer, delivering unfinished products, but somehow… they seemed to work less, earn more and have happier customers. I was distraught.
I did not want to “sell out”, I did not want to compromise on my ethics but I wanted to do well. So I went to talk to a mentor, which is also a family member, with huge experience in the business world: Mr. “N”.
Mr. “N” is that type of person who always does excellent work. He is one of the few people that I admire and I know he cares about his work deeply. I went to him out of an emotional decision so he could tell me what I wanted to hear: “keep going”, “it just takes time”, “you are right”, “if you build it, they will come”.
Instead he told me something that I never thought I will ever hear from his mouth:
Mr. N: “George, image is the most important thing!”
Also me: But isn’t doing good work the most important thing?
Mr. N: “No! The customer already bought and by the time he figures out the work is bad, it is already too late for him!”
I was shocked… I felt betrayed without knowing why. I appreciated him, I admired him, but was he “just like the rest”?
He was not, he was just more mature and he understood some things better.
“Why a good image works better than doing good work and no image… for a while”
When we first come in contact with a product or a service, what we buy is the image. Be it the brand, peer recommendations or commercials, the first purchase is always based on image. Recurring purchases and retention are based on other factors: real value, cost of switching, lock-in mechanisms etc. But the first purchase is on perceived value: IMAGE ONLY!
So the math works like this: to start you need customers. And since first purchases are based only on image, a really good image helps acquiring these initial customers. If you do bad work, you will ruin your image and customers will not come back, but purely mathematical… that is a problem for later.
Usually, businesses that start with a really good image but bad capacity and quality on delivery. They have higher revenue at the start and then they dip. They cannot deliver on specs, quality, and budget, so they drag on projects or have low customer retention.
“A good image does not mean doing bad work.”
When you are starting up (either as a freelancer or as a company) and have limited time and resources you can not do many things at once. So you need to start with something: usually the thing that you are best at. If you are really good at delivery, you will do only that for the beginning. You will have little time left for building a good image and will rely on recommendations from customers that worked with you. Your “image” is the trust of your previous customers.
But as you grow… you have to start working on your image or you will not acquire more profitable customers. Your current customers usually know customers from the same “social class”. An early stage startup knows other early stage startups. In short: they can pay similar rates. If you want to get customer who pay higher rates… you need a better image.
When you start focusing on growing your image, you do not need to compromise quality and you shouldn’t. Get somebody dedicated for that even if he/she doesn’t have a lot of experience.
Usually businesses that start with good delivery quality, and no image, have lower revenue at the beginning, but with a constant increase over time. They have really good customer retention, but lower margin and volumes.
“Why do so many bad people and businesses have such a good image?”
That is not actually true. It just seems like it and I can tell you why:
First: If what you are really good at is creating an image… you will start with that. And if you put all your time into it, in the short term it is much easier to create a good image than to create a solid foundation. It is short term approach vs long term approach. Sometimes you only have the short term option. But if you want to last… you need to deliver after you sell, or you die. Then you can find someone good at delivery and partner up.
Second: If you or your business have no character or substance, the only option you are left with is creating a good image. So you give it your all! While if you have also substance, your time will be split amongst the two.
It is the same preconception as “smart people are ugly and dumb people are beautiful”. But all research and all data shows this is wrong. Beautiful people are also smart people. Smart people are usually beautiful. Look at this gorgeous guy.
The reason why we have this perception is smart people also have other qualities to rely on aside from looks. So, on average, they do not focus so much on appearance as people who have only this going for them. They put less effort into looking better, because they do not need to do it.
But over time, smart people age better, good companies last over time, and good music bands get in the top charts even after 5 years (I don’t know if that last part is true :P).
So what I took from all of these experiences is:
- At the beginning you have to choose: create an image or focus on delivery.
- If you start with delivery, the operational side will kill all your time. There will be little room for anything else, but that is normal. Hang until you have a solid track record and enough financial flexibility to hire a full time “image person”.
- Once you start growing, get good at the other thing as well.
- If the only thing you can get good at is image building and don’t care about delivery… go into politics.
Image credit: Tom Barrett