Some of you may remember Dieselgate, the scandal from 2015 when Volkswagen was found to have installed software on its diesel cars to cheat emission tests. The issue became even more serious because Volkswagen kept insisting that the problem was due to technical glitches till the evidence was presented.
The scandal not only led to the resignation of senior officials it also brought down Volkswagen’s sales and share value and seriously impacted the image of a brand that was long considered trustworthy.
While a brand is owned by a company and its characteristics – logo, colours, voice and positioning – are things the company controls, the brand is finally defined by how people see it. Which is why reputation can make or break a brand and brand reputation management is crucial in safeguarding and maintaining consumer trust.
What is reputation management?
Simply put, reputation management is about shaping how people see you, your brand, or your organization. It started out in the world of PR back when people mainly learned about brands through ads, news stories, or word-of-mouth.
With the explosion of the internet, social media, and search engines like Google, reputation management has shifted heavily online. Today, Google reviews, social media posts, and online comments can shape public opinion just as much as traditional media. For instance, almost 60% of all reviews for local businesses are on Google.
Nowadays, reputation is built across a mix of social media, search results, user-generated content, and reviews. Each one—whether it’s a Google review, a tweet, or a headline in the news—has the power to help or hurt your brand.
With so many channels out there, reputation management has grown so broad that some service providers focus solely on managing online reputations. But no matter the focus, it’s key to look at the big picture across all platforms. Every mention can affect your brand’s image, so a well-rounded reputation strategy is essential.
Why is reputation management important?
Does it really matter what people say about you if your products are good and your prices are competitive? In today’s connected world the reputation of companies and individuals can be severely and irreversibly changed within moments. In the corporate world a well-managed reputation can increase brand equity, foster loyalty, increase company worth, attract talent and create long lasting relationships. Conversely, a bad reputation can decrease company worth and brand equity while leading to loss of customers, business and employees.
In today’s crowded market, trust and loyalty often matter more to customers than just getting a good deal. People stick with brands they feel good about, and they’re often willing to pay more for products from companies they trust.
Customers also care about shared values and ethics. A study by Harvard Business Review of over 7000 customers showed that 64% of customers said shared values were the main reason they felt connected to a brand. If negative publicity shakes that trust, those relationships can fall apart quickly. Reputation management can help protect those bonds and reduce the risk of losing customers to bad press.
In short, your brand’s reputation can make or break your business. Even so, many companies still aren’t investing much in building or protecting their brand’s image. Most companies only act when there is a crisis.