Want to discover why corporate reputation is important for your business and to retain your customers?
Before making a purchase, the consumer of the third millennium consults the web to gather information about the product and the company that produces it.
For this reason, today we talk about the prosumer (producer-consumer), that is, an interlocutor who has abandoned the passive role, becoming shrewd, informed, and active in the entire purchasing process.
Most users, when they read four or five negative reviews about the product or the manufacturer, will most likely choose to buy from a competitor. To avoid losing customers, it is important to convey a positive, ethical, and respectable brand image.
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Corporate reputation, therefore, is one of the factors that most influence the user’s purchasing decision process, and online reviews have now become an integral part of this process.
Quoting Warren Buffett, entrepreneur, economist, and philanthropist of the ‘900: “It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about this, you’ll do things differently“.
In this article, I will explain to you:
- why it’s important to convey a positive image of your company
- how to build and monitor it online
- how to manage it in case of crisis.
The 4 key elements of Corporate Reputation: credibility, trust, esteem, and reliability are therefore essential factors of a company’s business strategy, as they determine the success or failure of the business activity.
But how to build a successful corporate reputation?
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Corporate reputation: what it is and why it’s important
First of all, we need to understand the meaning of corporate reputation.
Perhaps during your studies, you have heard of Maslow’s hierarchy, an American psychologist of the ‘900 who became known for his theory on the hierarchy of needs. Maslow identifies a series of needs, from biological to psychological ones, necessary for an individual’s growth and personal development. At the base of his hierarchy, we can see:
- the needs to be related to the survival of the human being, physiological and security needs that constitute the primary needs
- that in the middle of the hierarchy, we find social needs related to belonging and esteem
- that at the top of the hierarchy, we find the needs of the self, those related to self-actualization, or self-acceptance.
Today, Maslow’s theory is perhaps too simplistic, but it is undeniable that humans, as social beings, remain sensitive to specific needs, including esteem and belonging; however, these needs must be understood in the context of the current social context, where relationships are increasingly shifting online.
Tangible and intangible resources in corporate reputation
Tangible and intangible resources are important components of a company’s competitive advantage. Tangible resources refer to the physical assets of a company, such as equipment, facilities, and financial resources. On the other hand, intangible resources are non-physical assets, including intellectual property, brand reputation, corporate culture, and knowledge.
The relationship between people is at the core of reputation
Feeling accepted and being part of a community are responses to essential human needs, and the individual is exposed to an increasingly wide audience: no longer just a small group of school friends, office colleagues, or team members.
A good reputation, today, refers to the concepts of people, relationships, interactions, or a social construction consisting of evaluations, perceptions, beliefs, and values that a community formulates about an individual, but also about a society or a product. With the advent of the web and social networks in particular, this reputation has shifted its center of gravity to the online world.
Talking about “social” and “sociality,” reputation cannot be confined to the individual’s private life but is extended to the community, and also concerns the online realm: that’s why we talk about:
- web reputation
- corporate reputation or brand reputation.
The reputation of a company encompasses the concepts of esteem, credibility, and reliability, and is the result of behaviors and attitudes that the organization assumes at various levels: professional, financial, ethical, human, managerial, both offline and online.
Companies that convey a benevolent and esteemed impression can optimize their performance and achieve or maintain their success by positively distinguishing themselves from competitors, winning and retaining consumers, satisfying employees, and conveying reassurance to partners. However, a company that neglects its brand reputation exposes itself to potential risks that could turn into real reputation crises.
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How to manage a corporate reputation online
If you think that periodically updating the company website, and social profiles, or running ethical AD campaigns is enough to have a “good reputation,” unfortunately, you are mistaken.
Thanks to communities, blogs, and social platforms, users today spread their opinions online, sharing experiences and judgments, influencing the purchasing process of other users with comments and reviews, and spreading messages virally, thereby negatively or positively influencing the perception that others may have of a company or a product.
Even the web reputation of a company is the result of human interactions: not just a relationship between companies and customers but a dialogue between people. This is why the difference between B2B (Business to Business) and B2C (Business to Consumer) is gradually diminishing in favor of a human-to-human language; in both cases, the target audience remains people.
What does this mean? We can especially observe it in B2C: talking about people instead of consumers is a substantial difference as it implies that our focus is on the human side of individuals. Thus, the goal is to establish a relationship with their emotions rather than just their money. Reputation and communication are closely connected: the company must change its way of communicating by “humanizing” itself, creating memorable experiences for customers, and, above all, building continuous relationships and interactions.
Build your company’s reputation
Now more than ever, the company needs to “put its reputation on the line”. Many businesses have decided to include photos of individual team members on the company website or create social media posts introducing project leaders; this builds trust and lets customers perceive that real people are behind the brand.
Another way to ”stand out” is through effective content marketing to attract potential new customers. Creating quality content allows the company to convey value and build customer loyalty; to do this, defining business objectives, preparing a strategic communication plan, and creating a well-structured editorial plan to update the website, blog, and social profiles are crucial.
All communication activities, both online and offline, must contribute to creating a distinct company identity that needs to be maintained over time to create brand loyalty.
To build your company’s web reputation, I suggest starting as follows:
- choose the domain name for the company website carefully
- generate positivity with informative and valuable content
- maintain the social profiles you decide to open
- learn about your audience by listening to them
- create valuable content: tutorials, articles, free e-books, explanatory videos
- if you make mistakes, always admit them
- build positive relationships with customers by engaging with them through social media
- consider the possibility of engaging in Corporate Social Responsibility Marketing to influence your brand’s perception by implementing the right strategies.
Remember that corporate reputation must be based on interactions with your customers; therefore, adopting a communication strategy centered around the consumer is important, starting with listening to their needs to offer the best product or service that meets their requirements.
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Strategic reputation management
After identifying and establishing the foundations for your company’s reputation, it’s necessary to monitor its developments. This is where Brand Reputation Monitoring comes into play, which involves monitoring web platforms where conversations about brands take place.
But how to do it? Here are some tips that can be useful in creating a good online reputation management strategy:
- set up web alerts to monitor mentions and comments on blogs, forums, and social networks
- internally allocate resources to engage online and establish specific procedures for customer care, sales department, and marketing office
- always respond to those who leave comments, showing that your company listens to its customers’ issues
- develop a social media marketing strategy that emphasizes dialogue with customers and their active participation
- create a crisis plan outlining specific procedures to follow in case of a threat to the company’s reputation.
Enhance your company’s online reputation and communication to differentiate yourself from competitors
Crisis and reputation risk in business
Corporate reputation is a crucial strategic asset for differentiating your brand from the competition and establishing a place in the consumer’s mind.
Today, having a respectable reputation means preserving the company’s success. However, potential threats to a company’s reputation are numerous.
The digital revolution has amplified the echo of the offline market, making it accessible at any time and from anywhere, while also tracking everything, even if you don’t own a website or social channel.
This is why the decision not to invest in the online sphere is a risk that company management must carefully consider: not being online doesn’t mean not having to worry about it!
Factors influencing corporate reputation
We have seen that brand reputation is the result of actions both offline and online; but what are the factors that influence it? Here are a few ones to invest time and resources in:
- the quality of products or services offered must be high: offering low quality will likely lead to customer dissatisfaction
- sustainable mission and vision: today, a company cannot avoid sustainable planning of its business
- social responsibility: a strategic business asset through which a company demonstrates a commitment to the common good of society
- strong financial performance: influences business growth and profitability prospects, a source of competitive advantage
- an attractive work environment: positively impacts the well-being of those working within it, turning them into ambassadors and influencing consumers and stakeholders
- innovation: an innovative company listens to its customers’ needs and strives to create products and services that address new demands; being innovative means contributing to changing people’s way of life
- ethics and well-being: a company that adopts ethical and respectable behaviors and is actively committed to protecting well-being inevitably gains credibility and trust.
- leadership: it’s a corporate lever that positions the company among those that most influence consumers because of their authority
- management: a well-managed company becomes an example to imitate, thereby increasing its value
- customer focus: a company that places the customer at the center of its interests and aims to meet expectations.
Whose opinions and values matter the most regarding corporate reputation? The answer lies in your company’s stakeholders. Brand stakeholders encompass any person or group invested in your company’s results. These groups comprise:
Although each of them perceives your company through their lenses due to their distinct interests, together, their feelings and attitudes define your corporate reputation.
Now you might be wondering: what are the factors that can damage corporate reputation?
Here are some examples:
- cyberattacks that compromise company and customer privacy
- scandals involving management or notable individuals associated with the brand/company
- service suspensions leading to consumer inconvenience
- workplace accidents compromising employee health and safety
- associations with partners having a poor reputation
- negative reviews.
Having a poor reputation can lead to serious consequences for the company, especially in economic terms, resulting in significant losses. Additionally, there’s potential damage to the brand’s image, resulting in a loss of value in the eyes of the customer.
Risk assessment: who bears the responsibility?
The CEO of the company needs to delegate one person who will ensure these tasks come to fruition. They include the COO (Chief Operating Officer), and CFO (Chief Financial Officer), as well as leaders of risk management, strategic planning, and internal audit.
The selected executive must provide regular updates to his senior and the board about the prominent risks to the company’s reputation and the measures in place to address them. It’s the responsibility of the CEO or the board to determine whether these risks are acceptable and, if not, what actions need to be taken.
Tools to help monitor online reputation
But there’s also good news!
We can monitor corporate online reputation: sentiment analysis involves analyzing the media buzz generated on the web. It involves monitoring conversations users have about our brand, to identify people’s opinions about our products and services. The benefits can include:
- improved customer support: by intercepting negative feedback, we can modify and optimize our service
- increased lead generation through positive word of mouth
- effective crisis management.
And the good news doesn’t end here!
Digital tools provide practical assistance in this monitoring phase through some highly effective tools:
- Google Alert
- Amazon Comprehend
- Meltwater Buzz
The only way to preserve corporate reputation is to be proactive, integrating risk management as a regular practice within the company, and defining a crisis management procedure proactively.
Reputational risks must be anticipated, analyzed, contained, and resolved with specific guidelines to be followed when necessary, forming what is known as Company Reputation. This document contains information for the proper management of risks that endanger the company, both in the eyes of the public and on social platforms.
A Reputation Marketing Agency can exceedingly benefit your company by expertly managing your online reputation. These agencies specialize in online reputation management (ORM) and offer strategic planning, damage control, content creation and promotion, SEO, social media management, review management, crisis management, and measurement and analytics.
One such example is IPSOS, which specializes in conducting surveys, studies, and analyses to help businesses and organizations make informed decisions based on consumer and public feedback.
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Strategic coaching on what to do
In this article, you’ve learned what corporate reputation is, understood the value a company can gain from a good reputation, discovered tools and techniques to manage web reputation optimally, and grasped how to prevent reputational crises that could have negative effects on the company’s business.
If you want to delve deeper into the topic or analyze your company’s reputation, the best approach is to consult competent professionals who can provide valuable insights.
Find out how our experts can assist you in improving your company’s online reputation