We have more information at our fingertips now than at any other time in human history. In the past thirty years, we have created and consumed more information than during any other time period. In fact, the average person creates an estimated 1.7mb every second. The creation of this data, and the way we use it, has serious repercussions for companies and entrepreneurs.
With this information comes the opportunity for increased scrutiny. In the past, to voice complaints, consumers would have to either send letters, tell friends, or even protest in person. Now, every one of us has a huge potential audience, thanks to the uptake in online media. This has real consequences for companies, but many businesses still do not take their reputation as seriously as they should.
A Competitive Edge
When you think of a competitive advantage, you probably think of one business being able to do something faster, cheaper, or to a higher standard than others in the market. Something you probably don’t think about is their reputation.
The fact is, if a company has a reputation for quality products, consumers will want to do business with them. The power of a brand’s reputation can even trump the goods or services that they actually provide. However, this means the opposite is also true. If a brand is frequently attacked with negative reviews or harmful social media posts, people will be less likely to buy their products. In fact, negative reviews can scare aware as many as 22% of prospective sales.
Just as word of mouth is an incredibly effective way to sell your company, so too are your own communications channels when talking about your business. 83% of people would be more likely to buy something if it was recommended to them by a friend, so what better way to give yourself a competitive edge than to get people talking about your products positively on social media and elsewhere online.
Perceptions vs. Reality
When you work within an organization, it’s often hard to look at it through an objective lens. That’s why so many CEOs still do not take reputation seriously. They see the good work their company does, they have pride in their products, and they know the value of their services – but consumers don’t always see it the same way.
The reality may be that your company is excellent at what it does, selling quality products at or below market value. However, if the perception is that you are an inexperienced operation or even worse, that you treat staff or consumers poorly, then this will do serious damage to your company. For that reason, many companies use reputation management services to ensure the public perception of their company matches their own positive view.
Ignoring the perceptions of your company in favor of the reality that you think is true can seem naïve, but this is the case in many of the world’s largest companies. Reputation is an intangible asset, but it’s no less important than physical assets that you can mark on your balance sheet.
Peace of Mind
One of the biggest benefits a good reputation can bring is that it will ease your worries. You won’t be kept up at night fretting over a negative review left on your website or what journalists are writing about you in the papers.
A positive reputation acts as a barrier to these kinds of harmful events, so you can rest easy knowing that your business is reputable enough for the bad press not to stick, or at the very least that there is much more good than bad. The idea of a communications crisis is always a niggling thought at the back of any executive’s mind, but with a proper strategic thought put behind your reputation, you have a lot less cause for concern.
The Bottom Line
The previous points are all important in their own ways, but perhaps the single greatest benefit a positive reputation will have to your company is financial gain. Companies with good reputations make more money – and that’s the long and the short of it.
All of the above points combine to create this effect. The competitive edge that reputation brings will enhance other aspects of your company’s performance. If your business is a market leader with a good reputation and the financial firepower to back it up, then the opportunities for growth are endless.