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.
How can a brand manage its reputation?
Effective reputation management rests on four key pillars:
Transparency: Honesty builds trust. Brands must be upfront about their practices, pricing, and values.
Responsiveness: Prompt responses to customer queries and complaints signal that the brand values its stakeholders.
Consistency: A uniform tone, message, and experience across all channels reinforces credibility.
Values Alignment: Actions must reflect the brand’s stated values, creating a sense of authenticity.
Transparency is the cornerstone of reputation management. Customers and stakeholders value honesty and are quick to spot inconsistencies or attempts to obscure the truth. In an age where information is readily available, being upfront about your business practices, pricing, and values is not just desirable but essential.
At a time when consumer patience is shrinking, responsiveness is a critical aspect of reputation management. Prompt responses to customer queries, complaints, and feedback demonstrate that a brand values its stakeholders and is committed to serving them.
Responsiveness is not limited to customer service. Engaging actively on social media, during crises, or through live support channels builds a stronger connection with audiences.
Consistency in communication and action builds a recognizable and reliable brand image. Consumers expect brands to deliver the same message, tone, and experience across all touchpoints. Brands like Apple excel at consistency, delivering a seamless experience across their ecosystem of products, services, and communications.
Aligning a brand’s actions with its stated values creates authenticity, a key factor in building a strong reputation. Today’s consumers are increasingly discerning and expect businesses to practice what they preach. The values of a brand are reflected in its social or environmental responsibilities, its treatment of employees and its marketing communication and activities.
Authenticity arises when brands align their promises with their operations, creating trust and loyalty that endure over time. Managing a brand’s reputation isn’t just about reacting to bad reviews—it’s a proactive process with a few key steps.
First, monitor what’s being said about your brand across social media, review sites, and news channels to stay on top of public opinion. Tools like Google Alerts, Mention, and Brandwatch enable businesses to keep tabs on online discussions, reviews, and social media chatter. Sentiment analysis can help identify trends, allowing companies to address concerns before they escalate. Proactive monitoring is akin to installing a smoke detector—it won’t prevent fires, but it can minimize the damage. Next, engage with customers by responding to feedback, both positive and negative; this shows you’re listening and willing to make things right.
Then, build a strong presence by sharing content that aligns with your brand’s values and strengths, keeping your image authentic and relatable. If issues arise, address them quickly with a clear, transparent response to build trust and show accountability.
Finally, keep refining your approach—reputation management is an ongoing effort, so review and update strategies to adapt to changing public expectations.
Crisis Management: Turning Challenges into Opportunities
Consider two contrasting examples - Johnson & Johnson’s response to the 1982 Tylenol tampering crisis and United Airlines’ mishandling of the 2017 passenger-dragging incident.
In 1982, an unknown people replaced Tylenol Extra-Strength capsules with cyanide-laced capsules in pharmacies and food stores in the Chicago area. The capsules were resealed and returned to the shelves. Seven people died after taking cyanide-laced Tylenol tablets. Johnson & Johnson acted quickly and recalled 31 million bottles of Tylenol offering free replacement tablets in a safer form. The company also launched a media campaign and returned Tylenol to the market in tamper-proof packaging. The result, Tylenol's market share dropped from 37% to 7% after the poisoning, but it recovered to 30% within a year.
In 2017 at Chicago’s O’Hare Airport, 4 paying passengers were deplaned from a United Airlines flight to make seats for 4 airline employees. In the process, one passenger was injured and taken away bleeding. Initially, the CEO of United Airlines sent out a message apologizing for the event while at the same time sending out an email to his staff defending the actions of the airline employees and blaming the passengers. The social media backlash was extreme with many users calling for a boycott of United Airlines. A poll conducted three days after the incident suggested that 79% of prospective fliers who had heard of the incident would choose a non–United Airlines flight. 44% would choose a non–United Airlines flight even if it cost more and took additional time.
Reputational crisis are inevitable, but they can be managed effectively with the right approach. A robust crisis management framework involves:
Acknowledgment: Admit when something goes wrong. Avoiding responsibility worsens the damage.
Investigation: Study the facts before issuing statements.
Response: Be empathetic, transparent, and solution-focused.
Resolution: Take concrete actions to prevent recurrence.
The Role of Leadership in Reputation Management
Reputation begins at the top. Leaders shape how the world perceives an organization. From public statements to internal decisions, every action of a CEO or executive team has reputational implications.
According to a global research report from PR agency, Weber Shandwick, on an average 45% of the company’s reputation and 44% of the company’s market value was attributed to their CEO’s reputation.
Building and Sustaining a Resilient Reputation
In a world where public perception is everything, managing your brand’s reputation is no longer optional—it’s essential. With a strong reputation strategy in place, you’re not just protecting your brand; you’re building trust, loyalty, and a lasting connection with your audience.
Reputation management is not a one-time effort; it is an ongoing commitment. Businesses must actively cultivate trust, monitor public sentiment, and adapt to changing expectations. By prioritizing transparency, responsiveness, and ethical practices, brands can build reputations that not only weather storms but thrive in the face of adversity.
Reputation is a long-term investment, and those who nurture it diligently reap unparalleled rewards.
For further discussion on the same, please reach out to Pradip Unni on LinkedIn. Want to be a part of CXO India? Reach out to us at info@cxo-india.com!
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