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