When you consider corporate “reputation” there are some questions that surface. What is the reputation of your organisation from the perspective of customers, prospective customers, influencers and other important stakeholders? How well do you understand your stakeholders and the influence that they have on the success of your business? Are you trying to build or repair the reputation of your organisation? Where are your greatest areas of reputational risk? As you answer these, will be able to get a better understanding of marketing reputation, and the picture will be clear.
With evolving times, organisations increasingly recognize the importance of corporate reputation to stay competitive and achieve business goals. We can recall examples of organisations whose leadership and business practice behaviours destroyed their reputations, such as Enron, Arthur Andersen, Tyco and WorldCom. Then there are examples where reputation has been chiseled by old leading organisations such as Johnson & Johnson and Philips and so on.
What is evident is that reputation is not a ‘chance’ happening. It has to be worked on tediously. It relates to leadership, management and organisational operations; the quality of products and services; and, importantly, relationships with stakeholders. It is also connected to communication activities and feedback mechanisms.
Then there is Reputation Marketing. A simple definition of reputation marketing is: building a top-of-the-line reputation and marketing that reputation to get more customers. So, while it is very important to have a strategy in place to manage one’s reputation, it is also important to have a plan in place to market good business reputation.
Importance of good corporate reputation
Your corporate reputation is by far, your most valuable asset which takes years to build but can be ruined in an instant. Developing a clear understanding of the variables and dynamics of corporate reputation is vital for all leaders, and no business strategy should ignore the important role of reputation. For organisations, whether commercial, governmental or not-for-profit, reputation will always be of prime importance. To reach their goals, to stay competitive and succeed, good reputation paves the organisational path to acceptance and approval by stakeholders. They work actively to build their good reputation, to build the ‘bank of goodwill’ towards them.
Corporate reputation is the overall estimation in which an organisation is held by its internal and external stakeholders, based on its past and future actions. The organisation may have a slightly different reputation with each stakeholder according to their experiences in dealing with the organisation.
Main benefits of good corporate reputation
The main benefits of a good corporate reputation can be when:
- Customer prefers doing business with you (when other companies’ products/services are available at a similar cost and quality)
- You are able to charge a premium for products/services
- You get stakeholder support for your organisation in times of controversy
- The value of your organisation goes up in the financial marketplace
Although reputation is an intangible concept, a good reputation invariably increases corporate worth and provides sustained competitive advantage. A business can achieve its objectives more easily if it has a good reputation among its stakeholders, especially key stakeholders such as its largest customers, opinion leaders in the business community, current and future employees and suppliers.
If your organisation is well regarded by your main customers, people will prefer to deal with you rather than others. And these people will influence other potential customers by word of mouth. Suppliers will be more inclined to trust in your organisation’s ability to pay and to provide fair trading terms. Likewise, government regulators will trust you more if you have a good reputation. And clearly, a potential employee will be more likely to sign up with you if you have a good reputation.
Marketing your reputation
Developing a marketing strategy is vital for any business. Without one, your efforts to attract customers are likely to seem inefficient.
To market your reputation you need to:
- Gain an in-depth understanding of your current reputation
- Understand how to maximise your reputation
- Be able to identify the priority areas and relationships to nurture, protect reputation
- Understand the role of key individuals in leading the reputation agenda
- Develop a reputation strategy with action plans and objectives
- Identify the risks to reputation and develop a plan to minimise these
The company’s reputation has a strong influence on buying decisions. The influence of organisational reputation will impact customers’ perceptions of product and service quality, customer value, and customer loyalty in a business market.