A specialist in public relations and crisis management, ReputationDefender EMEA Director Tony McChrystal recognises all too well the value of taking a proactive approach to online reputation management. This article will look at corporate reputation management and why it is crucial for companies to portray themselves in the best possible light.
Consumer trust can be won or lost based on a company’s reputation. A company could offer great products at half the price of its competitors, but if it fails to align with a consumer’s values, many modern shoppers are prepared to walk away.
Whether examining a company’s corporate social responsibility policy, customer service or the way it treats its staff, modern shoppers are increasingly socially conscious, placing their spending power behind brands they can believe in (i.e. those that have earned a solid reputation).
A business’s online reputation can directly impact its bottom line. In fact, a 2018 study by Zignal Labs and PR Week revealed that an organisation’s reputation accounts for 52% of its market value. Further research from the University of Technology Sydney suggests that consumers are actually willing to pay more for products sold by companies with a good reputation.
Effective management of corporate reputation has a multitude of benefits, contributing significantly to brand loyalty and making customers more likely to refer the business to other people. Indeed, a survey by American Express suggests that each happy customer tells 11 of their contacts about their positive experience, on average.
Online reviews are particularly important, with 86% of modern consumers checking them before buying a product. Described in one Forbes report as ‘the customer reference that never sleeps’, online reviews can make or break a business, with 35% of buyers prepared to shop only with companies that have a rating of four stars or higher. Among 18-to-34 year-olds, online reviews are particularly important, with 91% of this age bracket deeming online reviews from strangers just as trustworthy as personal recommendations from people they know.
Poor reputation management can cost a company dearly, not only impacting sales but driving up hiring and retention costs – culminating in a 28% higher turnover rate, according to a survey by LinkedIn. Vilification or negative press on social media could result in a brand crisis, driving down a company’s market value.
Having a great product is no longer enough. Today’s companies need to conduct themselves in a socially responsible way, maintaining an active presence on social media, engaging with customers, placing the customer experience front and centre and, ultimately, striving to add value to people’s lives.