The Value of Reputation

13th September 2017

Reputation is one of the great intangibles of business life – and yet has the greatest value to the success of any commercial venture. Its very vagueness leads some companies to neglect it all together, others to treat it as a smoke and mirrors illusion, a con trick based on communicating values or virtues its operations or products can’t deliver.

‘If only everything in life was as reliable as a Volkswagen’ the advert used to say. It was a pitch that consciously pumped up the car brand using Germany’s reputation for quality engineering. So much for the say, what about the do? Well, as we now know, Volkswagen wasn’t very reliable at all. Not when it came to emissions testing.

Its considered operational deceit has cost it a CEO, a collapsed share price, declining sales and God alone knows how much in law suits, fines and, of course, jobs. Suddenly the value of reputation is very tangible indeed. VW is, of course, a big company. Until its hubristic miscalculation, the largest car manufacturer in the world. They will survive. Diminished, humbled, tainted. But, to coin a phrase from another corporate crisis, ‘they’re too big to fail’.

Unfortunately, small businesses enjoy neither the padding of scale nor the support of a government with one eye on the unemployment figures and the other on lost tax revenue. Screw up as a small business and you are a memory, a few bubbles and ripples on the surface of commerce and then – gone.

But, as we say in reputation management, never let a good crisis go to wasteEspecially when it’s someone else’s. With each new corporate failing, each decline in the trust people have for global brands, unaccountable big business, overpaid senior executives, unreliable accountancy, ill-protected data, miss-sold finance, over-sold technology, un-met promises; the trust in small, human, local, regional, accountable increases proportionately.

Being the challenger, the minnow, the little man – or indeed woman – suddenly allows SMEs to become an alternative proposition. And one with an instant reputation for being ‘good’ that carries both opportunity and, of course, risk.

How can you build and protect your reputation?

Reputation Communications has called on its many years dealing with big business and small, crisis and triumph, to offer the following tips on how to build and protect a great reputation.

  • Reputation is not a single activity to be covered in an occasional half-hour ‘PR’ meeting. It is shot through everything you do. Manage it or events, circumstances or competitors will do it for you and probably not to your benefit.
  • Reputation isn’t just about the say, it’s about the do. Actions continue to speak louder than words. So when you communicate the benefits of buying your goods or using your services make sure it’s a promise your operation can deliver.
  • Operations remain the great reputational vulnerability of any business, large or small. No matter how good the intention, the decision and actions of your junior management or staff, the people at the coal face, will be the ones on which your whole enterprise is judged. Make sure they’re right.
  • Always ask ‘how will this look?’ Reputation shouldn’t dictate your business strategy but should inform it. When you leave that meeting, will your decision look as good in the real world?
  • Richard Branson once said that mistakes are inevitable but dissatisfied customers aren’t. In other words, it’s how you handle it that counts. People understand the realities of life; they have less tolerance for being left in the dark or being treated as an afterthought or an inconvenience. Think of that delayed flight, how differently you tell the story if you’re kept up-dated, given that glass of champagne, made a fuss of.
  • Apologise where appropriate. A little conceded gains a lot. Don’t, however, be seen as a push-over. Word soon gets around.
  • Word does soon get around and studies suggest that some 70% of what gets around by word of mouth is negative. The remaining 30%, however, has enormous power. People trust people like them. A friend’s recommendation is gold dust. Give customers the right story to tell.
  • Somebody once described social media as ‘passing nasty notes in class’. Develop an on-line profile then manage it. Engage where appropriate and use it as a platform you own to position your business and its values. Don’t, however, get involved in prolonged and unedifying spats. Sometimes being right isn’t the point and drawn out arguments daily erode good will and reputation.

All of the above should help you avoid a crisis. Which is the sort of crisis management we all prefer. However, it’s not enough to hope for the best. Prepare for the worst. Have a plan for the day the solids impact the air conditioning and if you can’t, find someone who can.

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