The Growing Importance of Corporate Reputation and Risk Management

Putting a Price Tag on Corporate Reputation Management in the New Economy

You may not be able to put a value on customer loyalty, but companies both small and large are finding out that you can put a tangible price tag on your Internet reputation. There is a growing importance of corporate reputation and risk management.

The financial crisis that began in 2007 has changed the way that the corporate world operates, and a trickle down effect has resulted in businesses that are spending as much money on reputation protection as they are on digital PR.

This article will detail how the current economy has refocused the business community from risky marketing ploys to a slow and steady build toward corporate reputation management.

 

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Control your profits through business reputation management

Although any business model is ultimately based on risk, there does not 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 is working. In fact, a good business reputation has now statistically been found to boost stock prices. In this way, you can see the how big business assesss the importance of corporate reputation and risk management.

In much the same way that stock prices fluctuate due to the release of a new product, issues with a company’s public image and how their Internet reputation is perceived can result in increases and drops in the cost of shares. Calling it “The new Science of Reputation Management”, Business Week cites research that shows companies are beginning to use their steady online reputation as an asset to gain investors, customers, and increased market share.

Check out this article from the ReputationDefender Resource Center that details the best practices for implementing company-wide online reputation management. Conservation seems to be replacing innovation, at least for the time being.

Need personalized advice on your situation?Talk to an online reputation expert

 

Protect your online reputation by learning how large companies protect theirs

In the current economic climate, how you perceive a company can ultimately lead to its success or failure. There are three important lessons that can be taken from businesses that have managed to survive the financial crisis:

1. Risky policy changes are being replaced by a slow progression to gaining the public’s trust

When you own a business, you are focused on making a profit for yourself. In large companies, you have to report to share holders and investors. The pressure to make a profit is intense, and this leads companies to make frequent changes in order to increase earnings.

A large entertainment company in the US has learned that in the current economy, making rapid changes will no longer increase your bottom line. Specifically, the company expanded in too many different areas, changed their user policies several times, and inflated their fees. The end result has been an extremely poor online reputation and a decrease in public trust.

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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 and the World Wide Web, 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 Internet reputation.

Businesses such as a large U.S. based oil company have found out the hard way that the current financial climate will not tolerate anything less than full disclosure. In attempting to avoid discovery of the truth with regards to the impact of a very public disaster, the company severely damaged its online reputation. The company not only lost the trust of the public, but also suffered from dropping share prices and lost investors.

3. Dealing badly with a corporate reputation management crisis can be more damaging to your online reputation than the crisis itself

You’ve seen public relations at its worst when you watch high profile individuals attempt to cover up public transgressions. PR firms use a very reactive approach to reputation management, attempting to use smoke screens and delude the public until such time that the entire event blows over.

This approach no longer works for several reasons, most importantly that the public is now connected to the outside world in more ways than just television. News spreads quickly online, and social networking websites such as Twitter and Facebook often break news more quickly than news outlets {http://mashable.com/2010/03/11/reuters-social-media-policy/}.

Savvy companies are focusing on proactive brand reputation management as opposed to using PR firms to deal with negative feedback and digital PR crisis. The importance of corporate reputation and risk management is undeniable.

Need personalized advice on your situation?Talk to an online reputation expert

 

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 in mind are those that are succeeding.

One of the most well known pharmaceutical companies in the world is a prime example of a company that is leading the charge toward a future that focuses on business reputation management. It is a fact that drug recalls can sink a pharmaceutical company. Rather than attempt to avoid negative publicity, a big brand recently averted a company wide crisis by not only admitting to their mistake, but also publically detailing how they planned on fixing the issue. They know, as do other companies focused on reputation management, that a solid online reputation is money in the bank.

In the U.S. the bottom line for many companies has changed drastically since 2007. If the 1990’s were a time of quick changes and increased profits, the current decade has become one that is reflective of the fable “The Tortoise and The Hare.” Slow and steady really do win the race when you focus on corporate reputation management.

Make an even larger impact on your yearly reputation management plan by utilizing the ReputationDefender package from ReputationDefender. The ReputationDefender package {www.reputationdefender.com} helps you control how you look online, which is good news for both you and your company’s online reputation.

Contact us for a free consultation

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  • Tailored to your specific case

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