Business risk. Why is reputation important and how to preserve it.

This isn’t the first time we’re writing about business compliance risk or when we offer you risk management strategies on this blog. Most likely this occurrence won’t be the last, either. We are passionate about this subject because we know that understanding, preventing and better yet, managing risk are vital for the wellness of a business. Since perception is oftentimes more important than reality, the following will focus on the subject of business reputation. 

What is business reputation and why is it so important

Business reputation refers to the way your business is perceived by the public. We’re talking about customers, but also business partners or employees, both current and potential. Thus, reputation is the equivalent of the image you have on the market. 

Why is this image so important? Well, it influences the way people will relate to your products/services or the opportunity of working with you. If your business is well regarded, it will certainly be far easier for you to find new customers, attract more partners and overall have a more successful enterprise. On the other hand, a bad image may result in fighting to survive in a market that does not take kindly to you. 

What is the consequence of a good business reputation?

See below some of the most obvious advantages: 

• Increase in sales;
• Obtaining and/or preserving client loyalty;
• Improving client relations and upsell options.

Do you think the above are worth the effort?

If so, ask yourself the following questions: 

• Is my business model an ethical and honest one? 
• Do I have efficient market communication, based on a brand strategy? 
• Do I have a long term vision? 
• Is my business involved in corporate social responsibility activities? 
• Does the Customer Care department, if there is one, meet the needs of my clients? 
• What’s the quality of my products/services and do they represent my company’s brand? 
• Do my employees appreciate the corporate culture and do they like coming to work? 

Based on the answers to these questions you may deduce your company’s current reputation on the market.

How can you build a better business reputation?

A brand’s reputation is strongly linked to how that brand is perceived, but also to the commercial value derived from it. Sadly, the quality of a product is not necessarily enough to create a brand’s reputation, in which case the company will have to invest in different strategies as follows.

Create a brand identity

You will need to determine what your business stands for, how it positions itself on the market and what is the message you want to deliver. Brand identity will be created based on elements such as: name, image, slogan, tone of voice, ambassadors, etc. Then, you will have to communicate about this identity and promote it, both online and offline. Your message needs to be easy to understand and remember.

Make you company known

A successful company is almost synonymous with its sector. Make all possible efforts with publicity, events participation, sponsorship, free seminars and a social media presence in order for the public to recognise and associate you with your sector.

Communicate

Even if you have already invested in your products and services quality, this does not mean that your clients will automatically see you in a different light. Discover your target audience, with help from market intelligence for example, and concentrate your efforts on them. Smart communication may be achieved with elements such as label, packaging or even delivery method. 

Associate yourself with similar brands

Especially if you’re new on the market, your image will be greatly benefited by associations with more powerful brands. Of course, mind that you share the same values. Associating yourself with new partners must be regarded as a risk anyway, so it wouldn’t hurt you to first do the due diligence before any new partnership. 

Create a loyal customer base

A loyal customer is the person who repeatedly buys your product/service to the detriment of your competition. This element not only generates direct sales, but also recommendations. As such, the number of your loyal customers will be inversely proportional with marketing resources. Don’t forget the following: if you desire loyal customers, you must first gain the trust of your employees.

How can you preserve your reputation?

There are a couple of strategies that help preserve reputation once you’ve built it, as follows: 

• Always keep your promises, be it service/product quality or employee obligations; 
• The number one concern is client service;
• Changes are not generally good, especially regarding price policy, logo, webpage design or the company’s image. Clients are slow to adapt, so consistency and uniformity are paramount to them. When a change is necessary, make sure you make an announcement in advance and smoothen the transition;
• We recommend tackling any dissatisfaction from customers or employees on the spot, not postponing it. Ignoring problems or delaying them is a slow, but sure-fire way to bankruptcy;
• The ethics code, which pertains among others to business transparency or environment protection or social investments is the most important business asset. 

Abide by all these principles and customers will find it impossible to ignore you!

Photo source: via Shutterstock