The importance of brand reputation to stakeholders cannot be overstated. A strong brand reputation can help a company attract and retain customers, secure funding from investors, and recruit top-tier talent. Conversely, a weak brand reputation can damage a company’s bottom line, making it difficult to be competitive in the marketplace, prosper and innovate.
At Minc Law, we know and understand that a brand’s reputation is one of its most desirable and valuable intangible assets. That is why we help clients monitor, protect, and repair their reputations in an increasingly digital world.
In this article, we will discuss the importance of brand reputation and how a company can build and bolster its public image with a few practical, actionable steps.
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The Key Components of Brand’s Reputation
A company’s reputation is essential to its success. It affects everything from customer loyalty to employee retention to the ability to attract new business.
But what exactly is brand reputation?
While it can be difficult to define, there are five key components that contribute to a company’s reputation:
- Financial performance,
- Customer service,
- Workplace culture, and
- CEO reputation.
What Are Key Brand Elements That Affect Reputation?
The Quality & Safety of Your Brand’s Goods & Services
It is essential that businesses offer high-quality products and services, as this is the primary reason that consumers will interact with the business in the first place. If a business offers a poor product or service, it will not take long for customers to find out, especially if someone leaves a negative review online.
Financial Performance & Projected Viability
A business’s financial stability and profitability are key factors in developing and maintaining a positive reputation. Customers want to know that the businesses they patronize are successful and will be around for the long term.
A company that maintains financial stability is more likely to be viewed positively by customers and investors alike.
The Quality of Your Employees & Customer Service
Companies that retain their top talent tend to produce higher-quality products and services. However, simply hiring talented employees is not enough – you also need to be able to keep them happy and motivated at work. Unhappy or unappreciated employees are less likely to do their jobs effectively, which can ultimately damage your company’s reputation.
Happy employees, on the other hand, not only provide better service to customers but also help improve your company’s image in the long run. This, in turn, can help you attract even more customers.
Workplace Conditions & Culture
Good employee relations are essential for any company that wants to maintain a healthy stock price and positive reputation.
It is important to understand that employees should be seen as key stakeholders – because they interact directly with your customers. If your business has poor working conditions or culture, it can lead to inferior customer service, which translates into financial loss and a damaged reputation.
The Reputation of the CEO or Founder
It is commonly accepted that the CEO is the face of the company. Their actions and words can carry a lot of weight in how the public views their business. If they are considered trustworthy and ethical, then their company will likely be seen in a positive light as well. On the other hand, if the CEO is viewed in a negative light, the company’s reputation will likely suffer as well.
Ultimately, a CEO’s reputation can have a significant impact on how people (including stakeholders) view a business.
Why is Brand Reputation Important to Stakeholders?
A company’s reputation is not just a reflection of its shareholder value but also a means of growing it. A strong reputation indicates to investors that a company is a safe bet, and this increased confidence can lead to a higher market capitalization.
Numerous empirical studies have explored the significance of corporate reputation as well as the factors that contribute to these organizations’ reputation. The evidence suggests that a positive reputation confers a competitive advantage, increases patronage, encourages shareholders to invest, attracts good staff, retains customers, and protects the organization from excessive scrutiny by the media.
Moreover, studies have found that improvement in reputation leads to financial growth. Even as little as a 5% improvement in reputation can yield a market capitalization growth of 2.5% for the average S&P 500 company.
By understanding how reputations are valued and how they can be leveraged, companies can maximize the value of their reputations and the return on investment for reputation management.
What Can Influence a Brand’s Reputation?
A brand’s reputation is built over time and can be influenced by many factors. The quality of products or services, the experiences of customers and employees, and the company’s values and actions all play a role in shaping how a brand is perceived.
What Are Some Ways to Measure a Brand’s Reputation?
Brand reputation is an important metric for businesses to track, as it can have a significant impact on revenue and growth. Fortunately, there are several methods for measuring brand reputation, including online reviews, social media engagement, and search rank.
Online Reviews From Clients & Industry Leaders
Word-of-mouth marketing is not a new concept – people have always relied on the recommendations of friends, family, and neighbors when making purchasing decisions. Even today, nearly 75% of customers cite word-of-mouth marketing as a critical factor in their purchasing decisions.
However, the rise of the internet has drastically changed the way that word-of-mouth marketing works. Online reviews are written recommendations in a digital form, and they have become one of the most important factors in determining purchase decisions. 92% of business-to-business (B2B) decision-makers are more likely to make a purchase after reading a trusted review.
At the end of the day, word-of-mouth marketing is supreme, and online reviews are one of the most powerful tools that businesses have to measure their brand reputation.
Social Media Followers & Engagement
While it is important to keep an eye on your overall online reputation, social media is a great platform for monitoring your reputation at any given moment.
One way to do this is by paying attention to your social media following. If you have a large and engaged social media following, it is a good sign that your brand has a good reputation. After all, people are more likely to follow and engage with brands that they perceive as being trustworthy and valuable.
So, if you are looking to get a pulse on your online reputation, make sure to watch your social media metrics.
Share of Voice
Share of voice is a measure of how much of the conversation (on social media, in the press, or in broadcasting) is devoted to your brand in comparison to your competitors. By tracking your share of voice over time, you will be able to see how your brand reputation stacks up and make informed decisions about where to allocate your resources.
Additionally, monitoring your competitors ‘share of voice’ can give you insights into their strategies and how you can better position yourself against them.
A company’s financial statements provide valuable insights into its overall health and performance. After all, when customers and clients trust a company, they are more likely to do business with it. This trust can have a direct impact on the bottom line, as businesses with good reputations are often rewarded with increased sales and higher valuations.
Local Search Rank
Local search rank can be a valuable metric for measuring and managing your online reputation. Your local search rank is important because it determines where you appear in local search results, which, in turn, can have a significant impact on your brand.
By keeping an eye on your local search rank, you can ensure that your business is visible to potential customers and that you are making the most of opportunities to claim local traffic.
How Quickly Can Your Brand’s Reputation Change?
In today’s business climate, a company’s reputation can change rapidly in response to changes in customer expectations or negative publicity. Even well-known brands like BP and Volkswagen are not immune.
In 2010, BP’s Deepwater Horizon oil spill caused widespread damage to marine and bird life, as well as to the reputation of the company. In the aftermath of the spill, BP’s stock price plummeted, and its CEO was forced to resign. The company also faced a wave of lawsuits and billions of dollars in fines. In the years since the spill, BP has worked hard to improve its image but still faces challenges in winning back the trust of consumers.
In the case of Volkswagen, the company was caught cheating on emissions tests, leading to a major recall of its vehicles. Not only was the company forced to recall millions of cars, but it also lost billions in value as its sales and stock prices plunged. Like BP, Volkwagen also faced multiple lawsuits and investigations – resulting in even more reputational damage. While the company has made an effort to be more transparent in the wake of the scandal, it has a long way to go to regain its former status as a trusted automaker.
In a nutshell, once a company’s reputation is damaged, it can be very difficult to repair. And a single misstep can have devastating consequences, so companies must be proactive in managing their reputations and protecting their brand.
What Does a Positive Brand Reputation Look Like?
A brand’s reputation is one of its most valuable assets. It signifies that the brand is credible, trustworthy, and desirable. A positive brand reputation might typically include:
- Active and positive social media engagement,
- High star ratings and positive reviews on consumer review websites,
- Healthy company culture and high employee satisfaction rates,
- Higher revenue, strong financial performance, and greater market share,
- Loyal customer base and brand trust,
- Positive PR and other media.
Customers who trust a brand are more likely to purchase its products or services. Therefore, a key element of a winning brand reputation strategy is to focus on the customers’ needs, wants, values, and opinions.
By aligning the brand’s experiences with these factors, companies can help shape how customers perceive their business. In doing so, they can build a positive brand reputation – on and offline – that will lead to continued success.
The Financial Value of Brand Reputation to Stakeholders
A company’s reputation not only affects consumer behavior but also has a direct impact on the company’s bottom line. For example, a 2015 survey by Deloitte found that 25% of a company’s market value can be directly related to its reputation. Brand reputation is therefore an important consideration for any business and one that should be managed carefully.
How Do Changes to a Brand’s Reputation Affect Your Stakeholders?
Countless studies have found that a positive reputation has immeasurable benefits for an organization and stakeholder confidence in a brand.
First, it increases the value that high-identification stakeholders derive from being associated with the company. High identification stakeholders are those who have a strong emotional or cognitive connection to the organization.
As a result of their strong connection, these stakeholders are more likely to be influenced by the business’s reputation. A positive reputation, therefore, strengthens the connection between the company and its high-identification stakeholders.
In turn, this increase in value leads to a larger stock of social capital and goodwill for the brand.
On the other hand, negative changes in an organization’s reputation can be a burden because of the greater stakeholder attention and violation of expectations associated with a negative event. Specifically, a brand’s reputation can increase stakeholders’ expectations about an organization’s future behavior.
In a word, reputational changes – whether for the better or worse – have a significant impact on stakeholders, particularly those who identify closely with a business.
How Do Stakeholders Influence Corporate Reputation?
Anyone who has an interest in a company’s results or outcomes is a brand stakeholder. They have a high interest in your company, and they play a critical role in its success.
According to researchers, there are four primary types of brand stakeholders: consumers, employees, business partners, and shareholders. Each group has different relationships with the company and different levels of influence on the brand.
Consumers are the first group of stakeholders because they are the reason businesses exist, and their satisfaction is what ensures companies thrive or fail.
The second group, employees, represent another key factor in a company’s success, as they develop and produce products or provide services daily. If they are treated poorly, they are less likely to produce a high-quality product or service – leading to major losses for a company over time.
Business partners make up the third group. While they may not have as much interaction with the company’s consumers, they provide essential support to get the products or services to the brand’s customers. They contribute to an organization’s business model and create the relationships necessary for the business to succeed.
Finally, shareholders own stock in a company and want to see it grow so their investments appreciate. By maintaining a positive brand reputation, you can keep shareholders tied to your company – which will in turn contribute to a positive brand image for your business.
Recognizing all of these groups as brand stakeholders is critical to formulating marketing goals and objectives that will allow your company to succeed.
What is the Financial Value of Reputation to Stakeholders?
A company’s reputation is one of its most valuable assets. Recent studies have shown that the reputations of publicly-traded companies make up a significant portion of their overall value. In fact, over 40% of the value of businesses listed on the FTSE 100 is attributable to their reputations. This is the value that the market places on a business that is over and above its valuation derived from traditional financial measurements such as net asset values.
A strong reputation can be a major competitive advantage, and companies are increasingly aware of managing their reputations effectively. Approximately 69% say senior management has mentioned the company’s reputation to employees in the past year and more than half of publicly-held companies report company reputation has come up on earnings calls.
Managing a company’s reputation is a critical part of doing business, and it is clear that businesses are starting to take notice.
How to Improve Your Brand’s Reputation
If you are looking to improve your brand reputation, there are a few key things you can do. First and foremost, focus on delivering quality products and services – as this will build customer trust and loyalty.
Some other strategies for improving your reputation include:
- Practicing corporate social responsibility,
- Taking constructive criticism seriously,
- Utilizing social media,
- Apologizing when necessary,
- Engaging in community outreach,
- Responding to negative reviews,
- Becoming a thought leader,
- Creating an identifiable brand,
- Planning for crises,
- Building a positive company culture, and
- Working with a brand attorney.
Practice Corporate Social Responsibility
Practicing corporate social responsibility (CSR) can be good for business. Numerous studies have shown that consumers have a positive view of brands that are seen as CSR leaders. Not only can CSR attract consumers, but it can also help to retain employees, as well as build stronger relationships with stakeholders.
Take Constructive Criticism to Heart
If your business is struggling with negative online reviews, it is important to analyze the common themes in the complaints. Are the negative reviews due to rude employees, inefficient staff, high prices, or a lack of customer service? If you notice patterns in the complaints, there may be a common problem that is preventing your business from reaching its full potential.
A successful business will take this constructive criticism to heart and take actionable steps to remedy the issues (and bolster its image in the eyes of stakeholders).
Utilize Social Media & SEO
In the digital age, it is more important than ever to have a strong online presence. Utilizing social media and search engine optimization (SEO) can help improve your brand’s reputation by increasing your visibility and reach.
By regularly posting high-quality content and using relevant keywords, you can attract new customers and followers while also engaging with your existing audience. In addition, monitoring your online reputation on social media and search results can help you quickly address any negative feedback or comments.
Apologize If Necessary
If you have made a mistake that damaged your reputation, it is important to take responsibility for your actions and apologize. In the business world, apologizing is not a sign of weakness; rather, it shows that you are willing to take accountability for your mistakes.
Of course, this only applies if the damage to your reputation is the result of something you did – if someone else’s actions are harming your reputation, it is not your fault. In that case, it may be worth speaking with an experienced internet defamation attorney.
Engage in Community Outreach
Engaging in community outreach can be a great way to improve your brand’s reputation. When you take the time to connect with your local community, you show that you care about more than just making a profit. And as an added bonus, you will also build goodwill among potential customers and clients.
Respond to Negative Online Reviews (When Appropriate)
Whenever a business receives a negative review, it is provided with an opportunity to improve its brand’s reputation. Responding to the customer and addressing their concerns shows that the business is willing to listen to feedback and make changes when necessary.
However, there are some potential pitfalls that businesses should be aware of before responding to negative reviews. First, businesses should avoid getting into arguments with customers online. Instead, focus on resolving the issue and thank the reviewer for bringing it to your attention. Additionally, avoid making promises that you cannot keep, as this could lead to further reputational damage.
When approached with caution, responding to negative online reviews can be an effective way to improve your brand’s reputation.
Become a Thought Leader
By positioning yourself as a thought leader, you can not only improve your brand’s reputation but also attract new customers and business partners.
To be seen as a thought leader, it is essential to produce high-quality content that is both accurate and insightful. You should also be active on social media, engaging with your audience and sharing your ideas. By consistently offering valuable insights, you will eventually build a reputation as a trusted source of information. And as your reputation grows, so too will your brand.
Create an Identifiable & Strong Brand
A brand is more than just a logo or a name. It is the sum of all experiences and interactions that a customer has with a company. A strong brand helps to create a positive reputation that can attract new customers and help to retain existing ones.
Many factors contribute to a strong brand. A clear and consistent message is essential, as is a distinctive visual identity. It is also important to create an emotional connection with customers so that they feel positive about your company and its products or services.
Plan For Crises
No brand is immune to crises. But how a brand reacts to a reputational crisis can mean the difference between a temporary setback and long-term damage. This is why brands must have a crisis communications plan in place before trouble strikes.
By being prepared and having a clear plan of action, companies can take steps to minimize the damage and protect their reputation. In some cases, a crisis can even be turned into an opportunity to improve the brand’s image.
Build a Company Culture People Want to Join
In today’s competitive marketplace, customers are increasingly interested in doing business with companies that align with their own values. By building a company culture that people want to join, you can show potential customers that your brand is one that they can trust.
Work With a Brand Lawyer or an Internet Defamation Attorney
Negative or unwanted content on the internet can be very damaging to one’s reputation. If you find yourself in this situation, you may want to consider contacting an internet defamation or brand attorney, like Minc Law.
An experienced attorney will be familiar with the various options for removal and can take action on your behalf to restore your reputation.
For further reading on the benefits of working with an experienced attorney to take the reins for ORM, we recommend reading our guide ‘Why Hire an Attorney as Your Online Reputation Expert’.
Benefits of Working With Brand Reputation Management Professionals
Any business that wants to maintain a positive image and build trust with its customers will need to manage its brand reputation.
That is where brand reputation management professionals come in. These experts help businesses to monitor their online reputation, identify potential threats, and take steps to mitigate damage. They can also manage a business’s social media presence and promote positive customer reviews.
In short, brand and corporate reputation management professionals provide an essential service for any business that wants to thrive in the digital age.
How Does Improving Your Brand Reputation Generate Competitive Advantage?
Your brand reputation is what sets you apart from your competitors, and it is something that you need to actively manage. A strong brand reputation can give you a competitive advantage by making you more attractive to customers and other stakeholders. Conversely, a weak reputation can put you at a disadvantage, making it harder to attract customers and leading to pressure on margins.
A Good Reputation Builds Trust
A company’s online presence is one of the most important aspects of its brand. In fact, for many consumers, a company’s online presence is their first interaction with the business.
Unfortunately, negative news, like lawsuits and bad reviews, can damage a company’s reputation and make potential customers less likely to do business with them.
But, online reputation management (ORM) can help.
ORM is an umbrella term for the process of monitoring and actively shaping one’s online reputation. By promoting positive stories and suppressing negative content, ORM can help to improve a company’s image and increase its chances of success.
Attract Clients to Your Products & Services
With the vast majority of consumers spending time online, an effective online presence can help attract and retain customers. Business reputation management professionals can help you create a brand-centric online strategy that keeps you at the forefront of your audience’s mind by understanding their needs and preferences.
Increase Your Brand’s Profitability
A positive online reputation can be seen as a form of free advertising that sets your business apart from competitors, boosts search engine rankings, and drives customers to your business.
In fact, a Harvard Business study found that every one-star increase in Yelp ratings translates to a 5-9% increase in revenue. Even if you are a small business starting out, this increase in revenue can make a big difference and help you stay in business for the long term.
Attract & Retain Talented Employees
When most people think about a business’s online presence, they think about the way consumers interact with the company. However, it is important to remember that potential employees also research companies online before deciding to apply or accept a job. And talented employees want to work for companies with strong reputations.
For further reading about ORM, we recommend checking out our comprehensive guide explaining the benefits of online reputation management services.
What Are the Benefits of Working With Professional Brand Reputation Management Teams?
As the world increasingly moves online, it is more important than ever to make sure that your digital footprint is an accurate reflection of what your business stands for.
That is where brand reputation management comes in. Online reputation management (ORM) services can help you take control of your online presence, identify and repair any negative content, and proactively create the image you want to convey.
As pricing is often a major concern for most businesses and corporations considering ORM services, we have compiled an extensive guide breaking down key online reputation management costs.
Work With ORM Professionals to Repair & Improve Your Brand’s Reputation
In today’s digital landscape, good reputations can be destroyed at the drop of a hat. A poor online reputation can have devastating impacts on stakeholder confidence in a company and ultimately, its longevity and success in the marketplace.
At Minc Law, we have extensive experience empowering businesses to put their best digital footprint forward, monitoring the internet for potential reputational threats, and removing highly damaging online content.
“Darcy was professional and patient with helping with a online reputation matter. She handled all my queries in a timely manner and she got the job done.”
July 22, 2021
If you are ready to start improving your business’s online reputation and monitoring the internet for online attacks, make sure to contact us by calling (216) 373-7706, speaking with a chat representative, or filling out our online contact form.