The business case for reputation
Today nebusiness launches a new series looking at the reputation of business. As North East companies look to rebuild after the recession, what people think of your business has never been more important. Over the coming weeks and months, Reputation Matters will look at how you can help build the reputation of your business - and highlights North East firms leading the way.
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If you want your business to have a good reputation, you must ensure it permeates right through the organisation, says Joanna Berry.
"Lose money for my firm and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless." - Warren Buffet.
SO HOW would you define reputation? What others think of you? How you “come across”? Whether you are trustworthy?
These are all important elements of your personal reputation, but they are also more relevant to business today than they have ever been. For a company, whatever its size, a good reputation is becoming an increasingly important element of their competitive advantage over others in their sector.
In a market environment populated by increasingly empowered customers who have more choice and flexibility in their purchasing decisions than ever before, and who can easily find alternatives to what you offer, your reputation can be the single most important factor which attracts them to you, keeps them with you, and persuades them to tell their friends about you.
Reputation has been called by academics “a collective representation of multiple constituencies”. Whatever that means to you, most definitely reputation is NOT about a self-promoted message.
Reputation is gained, maintained, enhanced or detracted from over time, and it’s a two-way process: Greggs have spent over 70 years consolidating their “reputation for good quality and great value”. It is important to note that ‘brand’ ‘identity/image’ and ‘reputation’ are not interchangeable. Reputation is, unlike the other elements, a two-way street. You have to ask not just yourself, but also all the stakeholders involved: “’What do all the stakeholders in my company think of who we are telling them we are and what we have done to prove that?”
The thing about reputation is that you can’t make it up, nor can you create it overnight. ‘Reputation management’ is a topical buzz word – and increasingly, job description – which implies just that. However if not very carefully integrated over time into daily corporate practice at all levels, with real authenticity and sincerity, trying to manage your corporate reputation is just like managing your own personal popularity. As many tales of celebrities in the fields of film, sport and entertainment have recently testified, that’s an awkward, superficial and potentially self-defeating activity.
A good corporate reputation depends upon some fundamental principles. Employees and management from CEO down need to be absolutely obsessed with the product or service that they represent. They need to work for and deserve the confidence of their consumers.
They must be available where and when their consumer requires them to support the marketing and sales activities of the company. If a mistake is made, the company’s reputation will depend upon admitting that mistake frankly and up front, and doing something about it, not trying to sweep it under the carpet: Toyota’s recent tribulations remind us of that.
Nobody is perfect – individual or corporate – and consumers know this. But that does not mean that they are prepared to be lied to for short term peace of mind. Companies must engage their consumers’ interest, and have something to say to them which adds value to their purchase decisions.
Over an eight-country investigation, researchers have identified the most important influencers of corporate reputation, which we will be assessing during this series on corporate reputation here in the North East.
At the top of the list of influencers came customers, closely followed by employees at all levels. Thirdly, and of increasing importance, the influence of the chief executive officer has increased. A good reputation precedes and helps business grow internationally, so the reputation of the CEO and their company are increasingly intertwined, as Fabio Capello recently proved (and John Terry found out to his cost).
Managing reputation is a key responsibility, which has to be led by the CEO and implemented in an integrated manner. Of later interest are other influencing factors such as print media, shareholders, the internet, policy regulators and broadcast media. But the primary influencers – the consumer, employees and the CEO – are key to the successful implementation of a reputation strategy which will have deep rooted, long lasting and meaningful effects.
Joanna Berry is a lecturer in marketing at Newcastle University Business School and vice-chair of the regional board of the Chartered Institute of Marketing
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