You might not be able to tangibly value customer loyalty, but companies both small and large are discovering that you can put a price tag on your Internet reputation.
The financial crisis that began in 2007 has changed the way the corporate world operates; one way is that businesses are now spending as much money on reputation protection as they are on digital PR.
This article will detail how the current economy has influenced the business community to shift away from risky marketing ploys in favor of corporate reputation management, and how because of this, there is no way to put a price tag on corporate reputation management.
Though any business model is ultimately based on risk, there doesn’t seem to be a place for it in the current economic climate.
A recent article in Business Week magazine highlighted the fact that big businesses are more focused on brand reputation management than presenting new products and policies. Rather than rock the boat with risky marketing plans, large companies have chosen to stick to what’s working. In fact, a good business reputation has now statistically been found to boost stock prices.
In much the same way that stock prices fluctuate when a new product releases, issues with a company’s public image and how its online reputation is perceived can result in share fluctuation.
Calling it “the new science of reputation management,” Business Week cites research that shows companies are beginning to use their online reputations as assets to gain investors, customers and increased market share. Conservation seems to be replacing innovation, at least for the time being.
Protect your online reputation by learning how large companies protect theirs.
In the current economic climate, how a company is perceived can ultimately lead to its success or failure. Three important lessons can be taken from businesses that have managed to survive the financial crisis:
1. Risky policy changes are slowly being replaced by initiatives to gain public trust.
When you own your own business, you’re focused on making a profit for yourself. Large companies have to report to shareholders and investors. Intense pressure to realize a profit has led these companies to make frequent changes in order to increase earnings.
But they’re learning that rapid changes no longer increase the bottom line, especially when they include missteps like imprudent expansion, unstable user policies and fee inflation. Damaged reputations and a decrease in public trust are the inevitable results of such outdated thinking.
2. Open and honest communication with the buying public has replaced hidden business deals and agendas.
Every large company has its secret to doing business, but with the popularity of social networking, the tendency to hide decisions and policies behind boardroom doors has changed.
Companies are now more open and honest in hopes of maintaining a consistent reputation. These businesses have found out the hard way that the current financial climate simply won’t tolerate anything less than full disclosure. Attempting to avoid discovery of the truth can not only severely damage a company’s reputation, but also result in lost investors and market share.
3. Responding badly to an internet reputation management crisis can be more damaging to the company’s reputation than the crisis itself.
You’ve seen public relations at its worst when you’ve watched high-profile individuals attempt to cover up public transgressions. Traditional PR firms use a reactive approach to reputation management, attempting to use smoke screens and delude the public until the event blows over.
This approach no longer works for several reasons, most importantly because the public is now connected to the outside world in more ways than just TV. News spreads quickly online, and social networking websites like Twitter and Facebook often break news more quickly than news outlets. Savvy companies have begun focusing on proactive brand reputation management as opposed to using PR firms to deal with negative feedback and digital PR crises.
So, as you can see, there is no putting a price tag on corporate reputation management.
Succeed in the current economy by focusing on corporate reputation management.
Large businesses that put risk in the backseat and steer their companies with brand reputation management at the wheel are those that are succeeding. A leading pharmaceutical company is a prime example of this trend. Rather than attempt to avoid negative publicity over a drug recall, the company averted a reputation crisis by admitting to their mistake and publicly detailing how they planned to fix the issue. They know, as do other companies focused on reputation management, that a solid online reputation is money in the bank.
The bottom line for many US companies has changed drastically since 2007. If the ’90s were a time of quick changes and increased profits, the current decade has come to reflect the fable, “The Tortoise and the Hare.” Slow and steady really does win the race when you realize that there is no putting a price tag on corporate reputation management.
Shelly Wutke is a freelance writer based in Vancouver, BC. Shelly has been published in Vancouver-based LOVE Magazine, local newspapers and on various websites.