The importance of reputation management
The digital age has been an age of disruption, of unlearning and of constant evolution. The boundaries between professions are blurring as we become more connected and intertwined. The effect is the most pronounced in the PR world. Already unrestricted by a clear definition, the PR professionals are taking on more varied roles as they help businesses and entities reach out to the core demographic. With the advent of social media, digital marketing and a considerable online presence on both the consumers and the industry’s side, it has become imperative to protect a brand’s reputation. Welcome to the world of reputation management where unfounded claims, a negative tweet and sometimes a viral message is all it takes to bring down years of hard work. Reputation management is key to creating goodwill, a not so tangible yet accounted for asset and one that can only be earned through a consistent dedication.
Goodwill and reputation management
We must appreciate the importance of reputation management and its effect on goodwill. Despite all marketing efforts and the best ad campaigns, goodwill cannot be bought but outlasts all other efforts. Reputation management refers to protecting that goodwill of the brand. Reputation management is not only about replacing the negative earned media with the positive news. Unfortunately, bad news travels faster and you can be sure that the damage will be done. As PR professionals, we must enhance the perception of the brand in the minds of its consumers. A US survey by Burson-Marsteller found that while 95% of chief executives surveyed believed that corporate reputation is important, only 19% had a formal system to actually measure its value. This gap between theory and practicality is where a PR firm steps in to ensure effective execution. Take for instance the case of Exxon, after the Exxon-Valdez incident, its share prices plunged by 20%. A smaller company would have been at the deep end with a sharp decrease like that.
Why it matters?
Exercises in reputation management go a long way in building trust and credibility for a firm. There are a number of other benefits from having a stellar reputation not just with your target audience but also your stakeholders, employees as well as within the industry. The most immediate return is in the customer’s preference for your products. When available at the same price and quality, their perception of the brand is the one thing that will make them reach for your brand. A brand may even be able to charge a premium for their products. As Walter Landor famously said,” A product is
made in the factory but brands are created in the mind.” What people say about your brand has become a reflection of the brand’s skills and abilities. Its reach does not only limit to end-users but also to the financial world and the stakeholders who are more likely to support you in times of crisis if they have a favorable opinion of your brand. Their engagement with your brand will be heavily influenced by what they perceive your brand to be.
The same acquires even greater importance in knowledge-based firms such as consulting, legal firms, hospitals, universities and the financial sector.
Online and on-the-go
With social media, online reputation management has also emerged as an integral part of a brand’s communication with the consumers. It entails navigating the labyrinths of social media, websites, online portals, forums. In the absence of a traditional media framework, a company’s online presence is exposed to a number of risks coming in at all quarters. With information going viral and no source to pinpoint the blame at, a lot of unsubstantiated claims pass off as legitimate information. Mostly negative and sometimes positive, the information gives no turnaround time as, despite best efforts, it exists and thrives. Then there are groups of negative advocacy, popularly known as ‘haters’ or ‘trolls’. These groups can be a quite damaging to a brand’s image as they are coming from users themselves and the general public is likely to believe them more. While unhappy customers are a source of learning, these groups operate differently. By attacking the image and not the product of the company, they aim to completely discredit it in the eyes of the consumers. The UK based Business Review surveyed over 500 businesses and concluded that online trolls had affected 52% of the businesses in 2016. What is truly upsetting is that despite 30% of them setting up departments to handle the problem, they do not seem any closer to a solution. With no moderation and accountability and a plethora of platforms to choose from, online reputation management can keep any PR professional on their toes. Apart from the social media platforms, Reddit, Tumblr, Wikipedia have all contributed to the chaos. Twitter deserves a special mention here for wreaking havoc with just 140 characters.
PR agencies are now, more than ever, being called upon to fill this essential gap and incorporate this factor as they communicate with the media and other stakeholders. Reputation management has become more than a function, it has become a necessity of the times. Every company is in need of it whether it is to create, maintain or revive. There are still some who are completely sold on investing in this soft power and opt for more quantifiable attributes. Having said that, studies have shown that there is a direct correlation between the ranking of a firm and its corporate communication expenditure which is definite proof of its value. This coincides with the shift from return on investment (ROI) to return on objective (ROO) that has emerged as a more effective way to achieve organisational goals. There are some effective tools both for online and offline listening that can help professionals mitigate crisis and prevent damage to the firm’s reputation. Not only will this translate into more customers, the online footprint will also be crucial to insights into how the brand is perceived. This can help in the future strategies of the firm. Brands and PR agencies need to work together to create a strong partnership to tackle issues of reputation management.