Since the formation of the very first company, reputation has been at the forefront of a business. Few businesses actually know what reputation actually consists of and few have actually broken down the elements of reputation and tackled it head on. Only since the arrival of businesses on the Internet has the effects of reputation been felt in a physical form. It has inherently been a company asset but now with people voicing their trust and sentiment publicly under the guise of ‘Freedom of Speech’ on the Internet, companies are now realising they need a specific strategy to deal with the effects on their business, to enable them to both increase their bottom line and to deal with crisis events.
What is reputation?
Let’s see what wikipedia has to say as a start:
Reputation is the opinion (more technically, a social evaluation) of the group of entities toward a person, a group of people, or an organization on a certain criterion. It is an important factor in many fields, such as education, business, online communities or social status.
So essentially it is the opinion people have of a business, group or individual. This opinion can be broken down into two elements of Trust and Sentiment. It is these two elements that form the individuals opinion. Would you trust that business? What is your overall feeling of how a business goes about its business? and why?
If you asked a number of people that question about a business you would get widely disparaging answers which would not allow you to compare one business with another so we need to form some structure to make elements of both Trust and Sentiment. The reason you would get such disparaging responses is because each business has a number of groups that take an interest in a business. Financial organisations have differing criteria than lets say someone who buys your products/services and the media will have a completely differing perspective. So we need to consider all these groups to get an overall picture.
These groups are called stakeholders and they are:
- Customers
- Employees
- Investors
- Media
- Regulators
- Government
Once a business has identified the current snapshot from these stakeholders only then can a true reputation be established. With the arrival of the Internet these stakeholders now have a vehicle to express their opinion on the Internet and it is vital that not only do businesses monitor what the stakeholders are saying about a business but have in place a strategy to manage the reputation effectively to increase profits.
Why have a Reputation Management Strategy?
With customers being the top influencer in assessing a business reputation the Internet has affected the Trust element that changes the sentiment dramatically. Consumers are wary about buying products online. Traditionally you walk into a shop and you purchase a product, if you have a problem you return to the shop and speak to the shopkeeper. This is what we as customers have become accustomed to so have inherent trust built in. However when we buy off the Internet we don’t know who we are buying from and if they will be around long enough to support our purchase if something goes wrong. One Global Reputation Business KwikChex is at the forefront of building trust in businesses on the Internet, by ensuring that their clients are transparent about their business and publicly display a ‘Proof of Quality’ that is checked by KwikChex, additionally they provide dispute resolution services for those that fall foul to defamatory and illegal comments on the Internet with great success.
This is the start of Trust on the Internet, building trust within the stakeholders is key to ensuring they support your business. Monitoring and managing that trust follows using a Reputation Management Strategy. In large businesses this may well have started within the PR department but has now become a department in itself. Small companies may not have the resources so they outsource this service.
Why should a business bother what Stakeholders think?
A bit like saying I don’t care about what reputation my business has. There is not one stakeholder, be it a customer, an investor, an employee that is not interested in a business reputation that it has an interest in. A positive reputation will bring:
- Increased sales
- Increased investor confidence
- Attract better employees
- Positive Media coverage
Summary
Nobody is in doubt that all stakeholders are interested in a company’s reputation, but are they managing and engaging with stakeholders in a way that encourages their support. The next 2-3 years will see businesses embracing the whole issue of Reputation Management and those that are early adopters will reap the benefits and gain the competitive edge.
