The Importance of Business Reputation Management

Business reputation management is a must for any serious business owner today. The opinions and perceptions of your customers and would be customers greatly affects how they would interact with your business. See the importance of reputation management and how you as a business owner could treat your customers well to gradually improve the reputation of your business over time as well as practical steps you can take right away to improve your business reputation.

Business reputation managementThe public's opinion of your business translates into your business reputation and may mean more or less business for you.

Although business owners have many more ways to promote their business today, the importance of maintaining a good reputation remains the same. 

Having a good reputation encourages customers to trust your business and makes them more likely to enter into a transaction. It also affects how your suppliers, employees, contractors, and competitors view your enterprise.

Unfortunately, managing your business’s reputation is not as simple as it used to be. 

The advent of the Internet means there are additional ways for your business to interact with consumers and other stakeholders.  Your enterprise has to manage its reputation on more fronts, which can be difficult at times.

To deal with this additional complexity, business owners are using business reputation management techniques. 

This article will explain how business reputation management works and why it is an important part of doing business.

What Elements Make Up Your Business’s Reputation?

A business’s reputation is the overall estimation of the enterprise by various stakeholders.

These stakeholders can include customers, investors, suppliers, contractors, government entities, and the general public. Each stakeholder will determine your reputation based on past actions and the probability of future actions. Even though business’s reputation is intangible, it has a demonstrable impact on the value of your business.

That’s because having a good reputation provides a significant competitive advantage in the marketplace while having a poor reputation can deter stakeholders from doing business with you.

There are ten main components to consider when thinking about business reputation:

  1. Ethical. Do stakeholders believe your business is honest and ethical in its dealings?  Is your business trustworthy, reliable, and safe to work with?
  2. Employees/workplace. Does your business have a reputation for treating employees well or do people believe they are underpaid?
  3. Financial performance. Does your business have a reputation for strong financial performance and profitability?
  4. Leadership. Does your leadership group have a reputation for being innovative, forward thinking and organised?
  5. Management. Is the business considered well-managed or chaotic?
  6. Social responsibility. Does your business contribute to social causes and act in a socially responsible way?
  7. Customer focus. Has your business built a reputation for treating customers well and providing excellent customer support?  Do you handle customer information carefully?
  8. Quality. Are the products and services that your business sells considered high quality by other people?
  9. Reliability. Do you stand behind the items that you sell and guarantee their reliability?
  10. Emotional appeal. Does your business have an emotional attachment that boosts its reputation?

Stakeholders will weigh up each of these components before deciding how to interact with your business.  A customer might know your business has a bad reputation for paying employees poorly, but is willing to continue doing business because you also have a reputation for providing excellent customer focus and quality.

What Is Business Reputation Management And Why Is It Useful?

There are now many ways for your business’s reputation to be positively or negatively impacted.  In addition to word of mouth and news stories, your business’s reputation can be impacted by blog articles, social media posts, forum posts, online videos, and reviews on websites like Yelp

Reputation management involves taking active steps to manage your reputation across these platforms.  Not only does it promote content that will benefit your business’s reputation, it attacks items that will negatively impact it. 

To give you an idea of how important reputation management is, a survey performed in 2017 found that 85% of consumers trust online reviews as much as personal recommendations

It also found that 49% of consumers expect a company to have at least 4-star online rating before they will use it.  It’s easy to see how your online reputation might be losing you customers and affecting your bottom line.

Some of the tactics that are employed for business reputation management include:

  • Developing content that showcases the positive interactions your business has with other stakeholders
  • Promoting the ways that your business contributes to society
  • Sharing your businesses achievements and successful track record
  • Improving how well the business communicates its successes with stakeholders• Creating social media accounts to interact with customers in a positive way
  • Ensuring that negative content is responded to appropriately
  • Ensuring that the business has strict privacy policies and telling customers about it
  • Training employees on how to use social media appropriately, so they do not publish something that damages your business’s reputation
  • Request that happy customers place some reviews online•
  • Publishing original content online that is positive to the business so it obscures negative content
  • Promoting company websites and social media profile to outrank negative websites

How Reputation Management Improves the Bottom Line

Here are a couple of real-world examples of how reputation management can improve a business’s bottom line.

Toyota Dealership in Michigan

Purchasing a car is a significant decision, which is why many consumers look online for reviews of local car dealerships. They are usually interested in determining if the car salespeople at a dealership are honest, easy to talk to, and give great deals to customer.

A Toyota dealership in Michigan found that their satisfied customers weren’t leaving reviews online — but a handful of unsatisfied customers were.  As a result, their reputation was taking a battering online.

This was corrected by contacting happy customers and asking them to add their own reviews. Within a few months, the business had seen review volume grow by 83% and their average star rating increase to 4.3 stars on a popular review site. This results in an increased in leads in the next quarter.

MedQuest — Medical Diagnostic Company

MedQuest is a diagnostic company with more than 50 clinics across the United States.

The company found that many users were leaving reviews of their performance online.  A small percentage of these reviews were from unhappy customers who didn’t receive the service they expected. 

The company wanted to obtain the valuable customer feedback that was being posted online and to respond positively to customers who had a complaint.  After hiring a business reputation management team, they began tracking responses.  They also encouraged happy customers to post online. 

The company saw an improvement in their ratings on various review websites.  They also saw a boost in the number of reviews, which increased their visibility on websites like Yelp! — leading to an increase in customers.

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