When it comes to reputation, whether that’s personal or corporate, it’s all about the collective opinion of the entity in question. For businesses, it can be based on a variety of factors, including where you appear on a search engine results page, your appearances in local or national news, and your PR department. In the world of the 24-hour news cycle, there’s nothing the general public loves more than watching a brand name implode due to their mishandled reputation. The reputation of a business can be hard to maintain and protect, but it could have much more of an impact on your profit margins and your future than you think.
Reputation: The Intangible Asset
Assets are what make up the structure and management of a company. Tangible assets are easily identifiable and measured, such as any owned property, land, finances, or stock. Tangible assets can be very easily measured, whereas intangible assets can be much more elusive in terms of measurement. That intangibility can make it very hard to protect, and when it comes to reputation, that protection and focus is of vital importance. While some brands work very hard to maintain and protect their reputations, the problem is that reputation can often become its own entity, and that means it can quickly develop a life of its own.
The Positives of a Good Reputation
If your company has a good reputation, then it greatly benefits. The phrase ‘intangible asset’ is important because a good reputation is a very important asset to have. It can be a unique property that cannot be replicated by your competitors, no matter how hard they try to emulate your way of working. There are many benefits of a positive reputation in business, and how they affect your growth and sustainability can vary from the minor to the major. Many brands focus on maintaining their positive reputation solely to continue making sales, but it can be much more in-depth and all-encompassing than that.
Who Cares about Your Reputation?
Although customers are the first group that you probably think of when it comes to protecting your reputation, the fact is that there are other groups equally as invested. Both within your business and externally, there are a number of additional groups that will be interested in building a strong and positive reputation. These include:
- The Bosses: Whether you are the CEO or you are on a board of directors, reputation is important for the obvious benefits that the company gains from a good reputation.
- Employees: One of the more understated beneficiaries of a good brand reputation is the teams that keep it running. Employees want the companies that they work for to be profitable because it makes the future less uncertain. Businesses with a good reputation are more profitable than those with a poor reputation, and that means that there are going to be more opportunities for career development and promotions.
While both of these groups are dependent on your reputation being protected, there are additional groups external to your brand that are equally as invested. These include:
- Suppliers: If your business is doing well, then you will sell more, and that means that you will be ordering more from your suppliers. If your business suffers losses due to a reputation hit, then those suppliers will be just as impacted as you.
- Job Applicants: Nobody wants to work for a brand name that is neither stable or has a bad reputation. A good reputation will make it easier to attract talent to your company while keeping employee retention higher.
- Consumers: When it comes to buying what they need, consumers want the brands that they use to be aligned with their ethical and practical parameters. Customers want value, and they will avoid companies that have a bad reputation.
Of course, there are also investors to take into account, as well as the general public. When it comes to the general public, a good reputation, revealed in PR strategies that make the general public feel more positive about your brand can generate highly beneficial word of mouth buzz. Consider how a bad PR mishap can be hugely entertaining for the general public and that the bigger the scandal, the more entertaining it is.
Turning Reputation Problems into Reputation Positives
No company is immune from taking hits to their reputation. Sometimes, a calamity can affect a brand from out of nowhere, and that means reputation management becomes even more essential. One mishap can transform a company, but there are many examples of a bad action by a brand being turned into a golden opportunity. From the UK insurance company Go Compare publically killing off their very hated campaign character (an opera singer), to Coca Cola seeing huge sales increase after the New Coke debacle, or even the decision by Chick-fil-A to stop donating money to questionable charities, it’s not impossible to turn bad PR into good PR.
The Streisand Effect
However, the Streisand Effect is also a big factor that can impact brand reputation. Named after the singer Barbara Streisand, the problem with making a big issue of a PR disaster can sometimes make matters worse. The singer sued the California Coastal Records Project because they listed her property on their website, which she called an invasion of privacy. However, by suing and trying to take charge of the situation, Streisand simply made it bigger news, and people that would never have known about the website suddenly flocked to it to look at what Streisand didn’t want them to see. Even now, the property is used on Wikipedia to explain what the Streisand Effect is. Reputation management is incredibly important, and companies that fail to protect their reputation proactively run the risk of simply causing more damage to their brand.
A good reputation can take years to develop and grow, but it can take just a few seconds to cause untold damage. When a bad reputation for a business can often be fatal, it’s more important than ever that companies take more control over their reputation and start looking more clearly at one of their most important assets. Just because reputation isn’t tangible, it doesn’t mean that it can’t be managed and used as part of your ongoing growth strategy. Fail to protect your reputation, and your business will never be as secure as it could be.