A glance at Fortune’s annual Most Admired Companies shows just how important reputation is to the biggest names in the world.
Populated with the likes of Apple and Walt Disney, the sought-after rankings by Fortune draw on factors like product quality, ability to attract and retain talent, and financial soundness.
A company’s reputation is then a key indicator of its operational excellence, employer brand, and market performance. It is both a result and a driver of the company’s bottom-line and brand value.
Company reputation is important – here’s why
In simple terms, a company’s reputation is the aggregate of the perceptions of its stakeholders – including customers, employees, associates, suppliers, the general public, and the media – towards the company.
A good reputation is a ticket to great opportunities. For a business, this may be access to a wider client base, deeper customer trust, and a competitive talent pool. Reputation itself is an intangible asset but the benefits of a positive reputation for a company are well established. Consider Amazon, whose brand reputation contributes a large share to it to its 135 billion USD valuation.
Company reputation impacts pricing
Research shows that such a company can leverage its strong reputation to charge a premium on its products and services. This creates sustained earnings and growth, enabling the company to gain higher market value and lower its capital costs. For example, a bigger share of earned media resulting from a better reputation would cut down the need for investment in paid media. This would bring down the overall marketing costs.
We also know that companies with negative reputations have to pay a heavy price on various fronts, whether revenue generation or talent acquisition. Poor employee reviews turn away future talent and force you to spend more money on recruiting. A CEO with a volatile reputation puts off investors and cuts access to capital. Negative customer reviews hinder sales and drive away potential customers. On the other hand, a good and strong reputation builds trust, which has become the currency of the new economy.
Online reputation presents its own challenges
The digital era has amplified the importance of business reputation and expanded it into another dimension rife with complications. Online searches have become the most trusted information source for the majority of internet users. Now 95% of customers check reviews online before they commit to a purchase and nine out of ten of them trust these reviews as much as personal recommendations.
As such, the impact of online reputation runs deep. It can be easy to dismiss what happens online as irrelevant to a company’s day-to-day operations, but online reputation also drives real-life behaviour including sales and hiring. Three out of four businesses claim to be affected by online reviews and chatter.
Why social media and search engines matter
In fact, the internet can be an efficient word-of-mouth referral system for both positive and negative feedback. While positive sentiment online can improve your company’s reputation, negative reviews and off-brand content can bring it crashing down. A negative review can set off a chain reaction and adversely impact the collective judgment of others, shaping a new or altered image of your company in the public eye.
The majority of your stakeholders today have instant access to scores of websites with limitless information on your business. Social media and search engines rank high among these sources. But these sites are also magnates for angry customers or employees looking to vent against your company. Review sites rank well in Google searches, which means poor reviews could appear towards the beginning of any search results on your business.
These search results allow consumers to explore product reviews, investors to learn about the management, and job seekers to research a prospective employer. What stakeholders discover on the first page of a Google search shape their opinion of your business and enable them to choose between you and your competitors.
For better or worse, online information is one of the key drivers of a company’s reputation. This makes it essential that companies build and maintain a sterling reputation and eliminate inaccurate information about their business from online platforms.
Managing company reputation is complex
Warren Buffet, one of the most successful investors and business magnates of all time, once famously said: “It takes 20 years to build a reputation and five minutes to ruin it.”
Reputation can change overnight, influenced by the many variables that go into its making. This is especially true for online reputations since the digital world operates in the blink of an eye and the tap of a key. Here, customer loyalty is both hard won and easily lost.
So, companies have to invest time, money and planning into reputation management – both building and maintaining a positive reputation online. Since reputation is shaped outside the organization, the ability to periodically measure and monitor it is critical.
Getting started with reputation management
Reputation management can help improve many aspects of your business. According to a recent study, almost eight out of ten businesses experience a rise in their market value with better company reputation. But it’s a complicated process that needs technical expertise and specialized tools to execute. The first step is checking and monitoring your existing reputation, to identify its strengths and gaps.
The initial questions to ask are ‘what do people see when they search online for my company?’ and ‘is the general sentiment positive, neutral, or negative?’ Unless you know what is being said about you on the internet, you cannot begin to adjust or optimise your current reputation.
How to check and monitor your online reputation
Performing reputation checks on the internet has become a common practice. Consumers do it with brands, clients do it with businesses, and job seekers do it with potential employers every day. Businesses too are at constant reputation risk from the people they work with. The negligent or misdirected actions of employees, leaders, investors, associates or anyone who represents your business can trigger a reputation crisis for you.
You can perform an online reputation check of your business, or KYC checks of your clients and suppliers and employees, by using relevant search terms and digging through the results manually. There are several online tools like Google Advanced Search, Social Mention, or Trustpilot that can help you get an idea of what is being said out there.
Making technology work to your advantage
A self-check of online reputation is only the first step. To inform your reputation management strategy, you need ongoing monitoring (remember, reputation is fickle) and analysis of the data found every time during the reputation check and monitoring.
Companies that are excelling at managing their reputation are doing so with the help of modern technologies like AI-driven search and data to analyze market intelligence quickly and consistently.
A specialist tool such as Yoono automates the search workflow and handles the ongoing monitoring that is needed for real-time insights. It cuts through the noise of digital data to remove the need for time-consuming manual searches, helping you monitor and manage your company reputation with efficiency.