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What is reputation management?

What is reputation management?

Corporate reputation is the perception of a business by its stakeholders, both internal and external. Reputation management must then, by inference, be the shaping of those perceptions. In the real world, however, it’s not that simple.

Reputation management as a concept sounds straightforward, and definitely sounds like something every business should be doing. But scratch the surface of the subject, and it becomes clear that it’s neither simple, nor strictly feasible. 

In today’s hyper-connected world, where stakeholders are more tuned in to corporate behaviours than ever before, employing reputation management strategies can backfire. Manipulating reputation means manipulating stakeholders, which is at best inadvisable and at worst disastrous.

Why is reputation management important?

A strong corporate reputation is a vital component in the success of any business.

When different stakeholder groups perceive a business in a positive light, it opens up a host of potential benefits for the organisation. These include:

  • Growing markets for its products and services and extending lifetime client value
  • Heightening share performance and encouraging new investment
  • Attracting and retaining employee talent
  • Reducing regulatory burden and scrutiny
  • Raising and improving its media profile

With these and many other advantages coming as the result of a good reputation, it’s little wonder that the impulse is to give that reputation a polish. However, short-term brand reputation management is no substitute for time spent growing a positive business reputation – which is essentially time spent growing your business. 

What people think reputation management is

A quick Google search will throw up a host of posts outlining the theory of reputation management, and how it can be achieved. The majority of these will typically focus on the so-called “brand reputation” of a company. They will offer tips on how to optimise search results, solicit customer reviews, bump up star ratings, bury negative comments, and promote positive reviews on online review sites.

The concept is pretty basic – using management tools to influence or conceal aspects of an individual’s or group’s reputation. This is done by directing the perceptions that stakeholders, both internal and external, have about that company and its brand. In other words, making sure that shareholders, employees, customers, suppliers and regulators see what your business wants them to see, and so protects your brand.

What reputation management really means

There is a problem with this approach, however.

It relies on an outdated theory of reputation as a solid construct, which can be built up or torn down and is composed of pre-determined building blocks.

This approach breaks reputation down into silos of cause and effect. Headers such as ‘financial performance’, ‘products and services’, ‘vision and leadership’, ‘workplace environment’, ‘social responsibility’ and ‘emotional appeal’ are assigned bullet points, and tick boxes record when stakeholders have been appeased.

With this schematic approach, reputation management companies profess to offer a system for not just managing, but controlling, reputation. Get all of the boxes ticked and you shape how people view the company. This ‘command and control’ approach relies on a top-down view of reputation, in which the business acts and the reputation follows.

With this schematic approach, reputation management companies profess to offer a system for not just managing, but controlling, reputation. Get all of these boxes ticked and shape how people view the company. This ‘command and control’ approach relies on a top-down view of reputation, in which the business acts and the reputation follows.

Worse still is the concealment approach.

This works by engaging online reputation management (ORM) companies to root out negative content posted online about a business. This might be in news reporting, social media or on online review sites. It attempts to push any bad press off that all-important first page of search engine results. This doesn’t improve reputation per se – it merely serves to cloak any negative reviews, critical blog posts or damaging stories.

This methodology is anachronistic in today’s inter-connected, hyper-transparent world.

Stakeholders form their perspective on a business from myriad data points, and share their opinions freely and broadly. No business can hope to censor, command or control that volume of data.

And in trying to do so, its reputation is more likely to suffer, as its communication strategy is perceived as inauthentic and manipulative. Reputation management is, in fact, a misnomer. You can’t truly manage reputation.

Influence: the alternative to reputation management

Rather than seeking to exercise control over reputation, businesses will better succeed when they recognise reputation as a multi-faceted, constantly shifting asset. It can only be influenced, not managed. By engaging with stakeholders, following the conversation, and listening effectively, those charged with protecting the company from reputational risk will have far more success.

 

A reputation management plan will encompass the dissemination of positive messages. A reputation-focused corporate communications team will ensure that positive content is reaching the right stakeholders, whether through traditional advertising and media-focused PR, social media posts, or even word or mouth.

Instead of trying to control reputation, companies need to control their actions. No business has the power to prevent a dissatisfied customer from spreading negative reviews about it across their social networks. 

But they are able to respond positively. They can monitor online reviews to understand the customer experience. They can then respond to comments and engage with that individual to resolve the issue. They can improve customer service, and recognise any failings the product or service may have. 

This kind of review management is enabled by monitoring tools. By using media monitoring, companies can listen to what is being said about them, where and by whom, and formulate an appropriate response. Appropriate means respectful and considered. Attacks by the business on negative commentary from customers, journalists or employees will result in more of the same.

While it’s not really possible to manage reputation, it’s certainly possible to mismanage it by being heavy handed in this area.

Instead, aim to understand stakeholders’ concerns and priorities, assess which are the primary influencers who need to be got onboard, and ensure that any response is also in line with the company’s mission and purpose. PR has not stood for press release for many years now. It has become about engagement with a broad range of stakeholders across every conceivable communications channel.

Authentic behaviours build authentic reputations

Reputation relies on authenticity, and authenticity necessitates transparency. In a digital world where consumers, investors, campaigners and employees have real-time access to information about how a company behaves, there’s nowhere to hide. 

Embracing this, being open about mistakes and honest in attempts to fix them will have a more positive impact on reputation than refusing to communicate about it. Transparency engenders trust.

Rather than trying to drive the news agenda, nurturing organic discussion around the business is more likely to reap long-term rewards. Employees who are valued and encouraged to express their opinions are more likely to spread the good word about the company they work for. Environmental and social responsibility will engender better community feeling. 

In the time of media anarchy, where anyone can be a citizen journalist, policies put in place for the common good rather than to appear altruistic will result in more positive unplanned press.

Reputation in the post-pandemic world

In the wake of Covid-19 and its seismic impact on the way people work, communicate and socialise, this stakeholder-centric approach to expanding reputational capital is more important than ever.

Businesses are being held to account for their actions, both during and after the worst of the crisis. Boycotts of companies making sweeping redundancies or refusing customers compensation have been swiftly organised and implemented. The social contract between business and community is being tested.

Coronavirus has catalysed the way that stakeholders interact with businesses, and held up an unprecedented and unavoidable lens through which their actions are now judged.

Any company rooted in the traditional, siloed view of reputation management is likely to find itself out-evolved in the post-pandemic landscape. Meanwhile, those embracing a holistic, engaged, authentic approach to influencing reputation will strike a chord with their newly empowered stakeholders.