Why Investing in Reputation Management is Crucial for Your Business Strategy
In the digital age, your online reputation is everything. Having a strong strategy in place to protect that image is essential.
Business reputation is the public perception of the brand, its products or services and its treatment of employees and customers. A good reputation serves a company well, but a lousy reputation inflicts damage and potential ruin.
That is not to say a company cannot come back from negative reviews or missteps. Reputation management is a tool to influence conversations and perceptions about a brand or enterprise. While useful for image repair, it is also an asset for well-established, clean image management.
Reputation is like currency; the better you manage it, the richer you are for it. Most business leaders understand the value of public image but are unsure how to harness and control it. They better manage tangible assets and operations than intangibles, like brand equity, goodwill and intellectual capital.
Still, inadequate reputation management has tangible consequences. Corporate and small business leaders must adhere to a proactive approach, committing to risk assessment and correction to avoid common pitfalls. Reputation management is an investment of time and money but creates the foundation for tremendous advantages and growth.
1. Improving brand image
The brand image is its reputation, the public perception. Reputation managers and firms focus on correcting or bolstering perception by increasing consumer retention, improving trust through customer interactions and developing brand advocates to promote the brand through word-of-mouth campaigns.
Brand advocacy is a crucial element of reputation management focused on transparency and authentic experiences. Advocates are often real customers who share positive reviews. Businesses can encourage positive reviews by reaching out to customers and asking; it seems simple because it is.
2. Increasing customer loyalty
A positive reputation promotes consumer loyalty, also known as customer retention. People like to buy from businesses they feel they can trust and admire. The positive emotional response stems from witnessing positive interactions or experiences, which can occur from personal use of a product or service or through private and public communications.
Customer service interactions play a crucial role in the reflections and responses of consumers toward a brand or business. Executives must understand that brand and company reputation build from consumer experiences with human representatives.
3. Managing negative reviews
Reputation management is not about the absence of negative reviews. It is impossible to please everyone, so people are bound to have occasional negative experiences or reviews of a product or service. The goal is to handle negativity with positivity.
Brands can make concessions when justified, and they should try to make something good come out of a bad experience. That said, some bad reviews and complaints are not valid. Have faith in your consumer base that they can see through intentionally derogatory or inflammatory reviews. Part of reputation management is establishing enough positivity and trust around a brand and business to overcome intentional attacks and vitriol.
4. Attracting talent
A consequence of a positive reputation is positive exposure. The more exposure a brand or business receives, the more credible it becomes. Future talent makes their first impressions of prospective employers based on reputation.
Business executives and managers should note that talent looks to more than the brand’s reputation; they also research its leadership. Reputation management as a corporate tool must encompass every aspect of a business, including its personnel. The mistakes of an executive or even a low-level supervisor or employee can affect how consumers and investors view the brand.
5. Creating partnership opportunities
Public profiles and perceptions can influence investor and partnership relations. Most investors or business owners understand how corrosive and contagious negative perception is. Partnerships with unpopular brands or individuals are infectious, hurting the bottom line of everyone involved.
Just as negative critiques and commentary can influence partnership decisions, so can positive discussions and assessments. Investors and businesses want to partner with popular and positive brands. They hope the goodwill rubs off and bolsters their reputation, which it often does.
6. Establishing recession-proof reputations
Reputation management is about creating a recession-proof identity. Consumers and investors place their trust in businesses that earn it. A company can earn trust by standing behind its products and services, investing in consumer relations and offering transparency in all interactions.
Any reputation management or public relations firm aims to establish communication that is more than transactional dialogue. Conversations about brands should delve into emotional responses and positive interactions. Consumers must see a brand as more than a business; they must start to see it as an ally or commercial partner, and once they do, they’re usually loyal, regardless of the economic climate.
7. Developing pricing power
Through proper reputation management, consumer loyalty is inevitable, though the scale varies. With brand loyalty, a business establishes pricing power — the ability to maintain demand even with rising prices. Pricing power is essential for maintaining or expanding margins through varying economic climates.
Reputation is everything because public perception is everything. When consumers love and respect a brand, they buy from it. When investors see a positive response to a brand, they invest in it. The reasons to invest in reputation management are simple; the more people like you, the more people support you.
This article originally appeared in Entrepreneur.com June edition