

Reputation isn't as powerful as you imagine - baha_man
http://blog.asmartbear.com/reputation.html

======
mjfern
I think reputation is one of the most important assets that a company
controls. Let me explain why.

The two most important factors that determine the success of a product are:
(1) the perceived value that the product delivers to customers; and (2) the
costs to the producing company for delivering this value.

Imagine a vertical line, anchored by value at the top and cost on the bottom.
The difference between value and cost indicates the advantage (or
disadvantage) of your product relative to a competing product.

Now consider reputation (brand) in relation to this difference between value
and cost. A positive reputation directly and indirectly increases the
perceived value of a product. It increases product awareness, signals quality,
and instills confidence among buyers. A reputation and brand can even invoke a
deep emotional response (e.g., Disney). In addition to these direct effects, a
reputation enhances a company’s ability to attract other resources that have
an important bearing on customer value. For instance, a reputation affects a
company’s success with recruiting talent and forming relationships with key
suppliers and partners, which in turn affect product development,
manufacturing, distribution, and so forth – i.e., the key elements that
ultimately drive customer value.

As an example, consider Google in Search. The Google brand is the world’s most
valuable, according to Millward Brown Optimor (2010). As a result of the
Google brand, consumers are more likely to use Google Search over Microsoft
Bing, even if these products are roughly comparable from a functional
perspective. At the same time, Google’s reputation over other technology
companies has enabled it to attract some of world’s top engineering and
marketing talent. This talent, which underlies its product development
efforts, has enabled Google to continue to enhance its products over time, and
in turn the company’s reputation.

While a reputation has the potential to affect perceived value, there are
often no direct costs with building a reputation because it’s typically a
byproduct of delivering and communicating customer value. A reputation can
even reduce costs because it may substitute for other expenditures (e.g.,
marketing, recruiting expenses). If you deliver significant value to
customers, you not only enhance your reputation with those customers, but you
also have an influence on their network and their network’s network through
word-of-mouth marketing. And if you continue to deliver significant value over
time, your reputation will be further amplified, having a broader impact on
product adoption as well as your company’s other activities, such as the
ability to attract new employees. Finally, unlike physical assets, which
depreciate and must be replaced at a cost, a reputation can increase in value
over time, so long as you continue to provide superior value to new and
existing customers.

Returning to the Google Search example. When Google Search first launched in
1997, users of the product quickly realized the superior value it provided
relative to competing products, such as AltaVista. Because of this value, many
of these initial users not only continued to use Google Search, but spread the
word to their family, friends, and colleagues. As the adoption of Google
Search increased, and as Google built and enhanced its Search and related
products over time, it cultivated the most valuable brand in the world, with
an estimated value of $114 billion (Millward Brown Optimor, 2010). Most
striking is that Google created this reputation without performing extensive
marketing or providing direct customer service to consumers. Google’s
reputation is largely a byproduct of the value that its products deliver to
customers. Furthermore, Google’s reputation has served as a substitute for
other expenses, such as marketing and direct consumer interaction.

In closing, the two most important factors that impact a product’s success in
the market are the perceived value that it delivers to customers and the costs
to the producing company for delivering this value. A positive reputation has
the potential to substantially enhance the perceived value of a product. A
company can leverage a superior reputation to attract more customers and/or
charge a premium price for its product relative to a competing product. And
because a reputation is often a byproduct of creating customer value, there
are often no direct costs for developing a reputation. A reputation can even
reduce other key costs, such as marketing or recruiting expenditures. Because
a reputation increases value, without a commensurate increase in costs, it can
substantially improve a company’s margins and profitability.

------
lee
So the reputation of the asmartbear blog didn't net many sales...but
reputation of one of employees did.

So reputation IS powerful then, as long as you have one that's catered to your
market.

------
StavrosK
> the blog belied my attitude, perspective, and credentials.

"Belie" means "misrepresent, show to be false". Hopefully the opposite of what
you meant.

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wccrawford
Actually, sounds to me like if you do marketing wrong (or your product is
crap), it doesn't matter what your reputation is.

However, get all the rest right, and I still think your reputation gets
tremendously.

Failure to use something effectively doesn't mean it's crap.

------
AndrewWarner
I think reputation matters, but this is a very hard switch to make.

I like and need everything Jason is offering. I'd trust him with my wallet, my
house keys and my web site.

But moving my site isn't easy. Media Temple has done very well by me. McVeary
@ mt has a great reputation too. And moving is a pain in the butt when there
isn't a severely painful need.

What I would like is to stay put, but get some help with the management of my
site. Just like I pay Sucuri $20/month to protect my site from viruses, I'd
like to pay someone to figure out how to properly cache my site and avoid bad
plugin and so on.

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lkrubner
I'm ambivalent about the message. I generally respect A Smart Bear and I enjoy
reading that blog, but I think this post conflates "reputation" with "target
audience." I do think reputation can be powerful with some particular niche,
but if the niche doesn't line up with what you are selling, that reputation is
meaningless. Reputation is sensitive to context. If Tiger Woods says "Golf
clubs from the XYZ corporation are the greatest clubs on the planet" then one
assumes the XYZ corporation will see a surge in sales. But if Tiger Woods says
"Pessac-Léognan White is the greatest white wine on the planet" then sales may
not surge very much for Pessac-Léognan White, because Tiger Woods is not known
to be a wine expert. That does not mean that reputation isn't powerful, only
that its power is highly dependent on context.

------
fleaflicker
He hasn't waited long enough to conclude this.

I don't need a WP host now but when I do I'll think of his site and try it.

~~~
smartbear
[the author] I agree with you completely!

Still, I waited 4 weeks before making this post, so that's a decent amount of
time.

Also, I was nevertheless hoping for a "bump" that would help launch the
company, and I believe most people also believe that would happen, so it's
useful to debunk the notion that a "bump" is to be expected.

~~~
qeorge
Hey Jason, I'm a web developer and I make hosting recommendations for my
clients. We'd like to recommend WPEngine.com for some of our clients, but
there's a couple of features that would really help us with that.

Are you interested in feedback? If so, drop me a line
(george@illuminatikarate.com).

Point being: the sales cycle here might be longer than you expect. You'll get
a few accounts through me (and thus through the blog post), but you won't know
that from analytics.

~~~
cwilson
Just sent an email to you and CC'd Jason (I'm a co-founder). Looking forward
to the feedback!

------
brlewis
This made my day, since it also illustrates that lack of reputation is not as
disadvantageous as you imagine.

------
lionhearted
I think part of the issue is that Smart Bear readers probably aren't the best
market for WPEngine. It's a cool concept, but look at their pricing here:

<http://wpengine.com/select-plan>

And features here:

<http://wpengine.com/features>

We make Wordpress fast, keep it secure, scale, curate plugins and themes, very
easy backups, no lockin, and easy to edit. Outside of the last point, all
those features are better geared for a newbie than someone who can handle
technology.

Scaling, plugins, design, themes, backups, and exporting your data are
relatively easier for the Smart Bear audience than the average user. I'm not
sure it justifies $50/month at the lowest price point for the convenience if
you already have the skills in that area. Ideally, they'd become the go-to
platform for people who are already established in some way, but don't want to
struggle with the technology too much. Like, a famous chef goes to start a
blog, ideally when the chef asks someone for how to do this, that person says,
"Oh, you want WP Engine, it's the easiest." $50/month is chips for someone
established who decides blogging is a valuable part of their business. But for
someone that can handle sifting through documents and research, the price
point isn't really worth the features. That might be why the WPEngine didn't
get as many sales from the launch notice as anticipated - the feature set
seems most valuable for people with less computer-savvy.

~~~
cwilson
While I do agree with you that we are great for newbies you'd be surprised at
the number of tech-savvy clients we have who simply don't have time to be
their own IT guy anymore. This may mean our messaging needs to be revised
completely, but I don't think it's true that we're for newbies only.

Case in point: Most of our income now comes from very large WordPress sites
serving millions of page views and terabytes of traffic. These customers want
to focus on their business and not keeping their site up.

In fact when we do change up our messaging it may be split down the middle.
One part newbie friendly WordPress and one part enterprise level services for
a fraction of the cost.

~~~
thwarted
_Case in point: Most of our income now comes from very large WordPress sites
serving millions of page views and terabytes of traffic. These customers want
to focus on their business and not keeping their site up._

Shouldn't keeping the site up one of the businesses of a company that runs
webservices that serve millions of pages and terabytes of traffic?

------
Udo
With this product, reputation is neither the problem nor the solution. The
amount of people who are willing to shell out 50 bucks/months to get their WP
blog hosted is small:

Pretty much the only feature on your hosting site NOT available to someone
renting their own server space (for less money) is CDN. I would hazard a guess
that the number of blogs that need this is very small and those who do
generally have companies behind them to make their own setups, under their own
complete control.

I don't think this is a bad service, mind you, not that it matters. It's a
great set of scalability and reliability features for that price. But the
target audience in acute need of that service is low. In order to scale this,
you need to reach far more people than those 17000 who subscribed to your RSS.

~~~
dirtyaura
Oh boy, there will be plenty of people and businesses who are willing to pay
$50/mo for someone to take care of all technical details. It's absolutely
trivial amount for any business and totally inside the reasonable limits of
serious hobby bloggers (prosumers as they call them in the camcorder industry)

Based on my observations in Europe, reading blogs is hitting mainstream, the
prime example being fashion blogs that already gathering more daily uniques
than websites of established news sites.

It's a kind of funny, as many early adopters think that blogging is passé. But
the truth is that the whole web economy and web-based marketing is just about
to start. There's plenty of opportunities to just pack and serve existing
technologies into super-usable servings. WPEngine will be a success.

~~~
Udo
_WPEngine will be a success._

I wasn't saying otherwise, you're attacking a straw man here. Nobody said
blogging is passe. Nobody said there would be no customers for this. I was
merely explaining why there were limited results from trying to convert RSS
subscribers into customers.

~~~
dirtyaura
You are right, but you gave the context in the last sentence, and I - reading
too hastily - had made my mind based on the generic-sounding assertions that
you gave before that. Sorry 'bout that.

------
vaksel
well I can think of a number of things why that didn't work:

1-you have to consider how effective your mailing list is. Out of those 18,000
emails...normally, how many would get opened in the past? how many would
follow the links in the email? 18,000 emails mean nothing, if only 100 people
actually read them.

2-you have to consider your audience. I would imagine most people on that list
don't actually need that service. It's like pitching a book about C++ to your
mailing list for soccer moms.

3-like someone mentioned, the service or the sales page may very well be crap.
You can't know what your customers actually want. Sometimes you can go full
retard in your copy, and you'll triple your sales.

So I wouldn't dismiss reputation just yet.

~~~
Psyonic
You never go full retard

~~~
Psyonic
So he borrows "full retard" and it's fine, but I finish the joke and get -13
for it? This site is really crazy sometimes.

~~~
steveklabnik
Actually, it's that the joke was a small part of his overall post, but it was
all of yours. His comment was useful _in spite of_ the joke.

~~~
Psyonic
Right, but what's wrong with a joke? It's not useful, sure, but it wasn't
offensive or mean-spirited. Other than "this isn't reddit," what could
possibly make it deserving of -20?

Even if it wasn't funny, is that really the message we want to be sending?
Tell a joke and get down-modded into oblivion?

~~~
steveklabnik
In general, anything that doesn't contribute to the conversation will end up
downvoted. Check out this conversation, for example:
<http://news.ycombinator.com/item?id=1647322>

If you look through my comment history, you'll find that I occasionally don't
follow this, either... I'm just trying to explain why you might have been
downvoted, I am not 20 different HNers, nor the HN morality police.

~~~
Psyonic
I know you're not the HN police. I don't even care if you downvoted me. It's
just karma. I'm just really surprised that a simple joke has become my most
downvoted comment. I imagine in the nearly 4 years I've been here I've said
some things that were far more deserving. Ultimately, I'll just have to adapt,
because I'm not going to change HN. I still don't get it, and I've been here
since the beginning, but I'm smart enough to see the writing on the wall. I'll
save my jokes for somewhere else.

------
michaelfairley
Even the SEO advantages he gets from his popularity will make a huge
difference.

