Well-adjusted corporate reputation is important within any company. It should be placed on the same high level as revenue and turnover. The future of every company depends on the ability to maintain top marks in good reputation. How is this done? Here’s an example…
About 97 per cent of large business owners believe that online reputation management is essential for their well-being. According to the Reputation Dividend Report, corporate reputation is responsible for an average of 38 per cent of market capitalisation within the FTSE 100 & 250. Statistics also confirm that reputation can both increase and decrease the value of a company, and when it falls the wrong way, competitors use it to their advantage.
In this article, we’ll take a closer look at the concept of corporate reputation – why it is so important and how to measure it. We’ll highlight specific examples of how companies overcome or succumb to reputation failures.
How can you calculate reputation value?
What do you think it costs to create a new brand today? Some brands have a higher price tag than others because they may be overpricing their products or services. For example, if you choose Coca-Cola and not some cheaper, lesser-known proprietary brand, then you decide to do so based purely on its reputation.
Why is corporate reputation so important?
Your corporate reputation depends on how customers feel about your brand. For example, if the attitude towards the company is positive, then you can expect:
- increase in the company’s income and share price,
- reduced customer loss rate,
- increased customer lifetime loyalty value,
- closure of deals on more favourable terms, and
- attention from the best job candidates and employees.
On the other hand, negative public attitudes towards the company will undoubtedly lead to a fall in income levels, customers switching to competitors, and decreased employee qualifications. Yes, it can be that serious.
By fully understanding both scenarios, it becomes obvious that you need to spend time improving (or maintaining) your good corporate reputation. But how do you do this in the turbulent conditions of an ever-changing market?
Analysis of corporate brand reputation
Reputation can change very quickly. Your company may appear protected in terms of reputation – there is a favourable opinion of you both in society in general and online, you can perhaps afford to charge a higher price for your products or services because the public has a high opinion of your company and trusts your products.
However, what happens if something goes wrong? The stronger your corporate reputation is, the easier it will be for your brand to overcome a crisis. Whether you are faced with negative comments that a competitor spreads about you or the knock-on effects in the media. In times like this, it’s your good reputation which will help save you from descending a slippery slope.
How to measure corporate reputation?
The formula, criteria, and ratings differ depending on which site you are evaluating. Here are some excellent ways to measure corporate reputation:
- SERP analysis. Simple Google search can really matter. Finding out what’s being said about your company or your competitors will help you establish your corporate reputation score. Don’t forget to check out the Google News section to see more detailed search results.
- In-depth research. After you do your initial search engine results analysis, start digging deeper into relevant blogs, articles, and reviews, where you’ll likely find out how and why certain things are being said about your business.
- Social Research. Analyse public opinion to find out what people say about your business on social media. Is it something good, bad, or indifferent?
The methods mentioned above will give you a good idea of the general sentiment associated with your corporate reputation. Having more positive posts about your business than negative posts is essential for business success. Since 64 per cent of consumers trust search engine results more than traditional media, you need to make sure that what they see on the internet is a positive and accurate reflection of your business.
Constant monitoring of your corporate reputation allows you to develop more efficient strategies for sustainable business growth based on the right information. You will learn how and when to spend your valuable marketing dollars to see results. In addition to the research methods listed above, here are some other excellent practices for measuring your corporate reputation:
- set yourself goals,
- study your audience,
- create an action plan.
Every company’s reputation changes as time goes by. While it is impossible to create a universal formula for measuring your corporate reputation, it is extremely important to keep on your toes about such matters. It’s worth all that time and effort it may take you to maintain it.
Positive corporate reputation will lead to higher revenues and share prices, lower customer churn, longevity in customers’ loyalty value, and better employee performance. It’s so clear. Your corporate reputation determines the cost and quality of your company.
Why not maintain your reputation by following some of the advice and ideas discussed above? You know it makes sense. If you need more help in strengthening your reputation or recovering it from a reputation crisis, don’t hesitate to contact us. We will develop a customised strategy plan that will help you keep your good name.