Francine Raften

Reputation Management

The most valuable property your business or organization can acquire over time is its reputation.

Research shows that the public would rather buy products and services from companies with good reputations; that goes for where they’d rather work and where they’d prefer to invest, too. The benefits are clear: a good reputation can enhance your business in good times, and it surely can buffer you in times of crisis. That’s why it is smart business to manage your reputation as aggressively as you manage costs or any other management responsibility.

Companies that invested in reputation management experienced a measurably better reputation than companies that didn’t.Reputation management consists of proactive or responsive strategic actions which protect or repair how you are perceived—your reputation and credibility—in the public eye and among key stakeholder audiences. Most often, companies think of reputation management when they need to repair damage resulting from negative media, controversial issues, or erroneous public perception. (Think accounting scandals, product recalls, consumer safety, lawsuits, environmental issues, bad management decisions—just open the newspaper on most days.) And that’s why companies suffer major blows to their reputations and bottom lines—they don’t think of their most valuable asset until it’s in danger. Your reputation is always at risk, and the bigger the company, the greater the risk.

Even during times of controversy, there is a silver lining: reputation management strategies are an excellent opportunity to reinforce the positives of your brand and reinvigorate its identity.
JD White recommends developing a plan today to prepare for a day when your company’s reputation is threatened; such strategizing goes a long way toward brand preservation and provides a buffer in times of adverse media or stakeholder unrest.

In fact, research relating to Fortune 500’s Most Admired Companies list found that companies that invested in reputation management experienced a measurably better reputation than companies that didn’t. The study analyzed spending by 476 companies and found that the top 200 among the most admired had invested in reputation management. Those in the bottom half had not. In other words, developing reputation management communication strategies yields real results.
A sampling of some of the strategies JDW has recommended to clients:

• Conduct a SWOT (strengths, weaknesses, opportunities, threats) analysis. The exercise will be key to how you proceed, possibly for years ahead. Brutal honesty should be your motto; if you are less than bluntly open, the crisis will control you.
• Conduct research to know your key stakeholders better. Research what people are really thinking about your company. Don’t base your strategy on media reporting alone, but if you are facing a crisis, determine the impact on your clients, employees, and other key audiences through soft-sounding interviews, focus groups, or surveys. Craft strategies to get the real messages through to the people that matter. Continue to monitor public perceptions long after the immediate crisis has passed to see if there are lasting implications for your brand and reputation, and act accordingly.
• Formulate your key messages quickly, and stick to them. Make the case clearly and simply, with honesty and compassion, ensuring that it is understood both inside and outside the company, and make sure everyone is singing from the same song sheet. To build brand preservation, identify positive messages as well as responses to the negatives: how the company is resolving the problem, the long-term benefits to customers, and lessons learned.
• Communicate directly with your stakeholders. The media’s impact is the widest, but it is unfocused. Utilize your "narrow cast" channels to get specific messages to identifiable audiences.
• It’s okay to say “I’m sorry.” One reason that people are still angry at companies like Enron and WorldCom is that they didn’t hear those companies say, "We’re very sorry. This shouldn’t have happened." That’s what your stakeholders really want to hear.
• Develop a media strategy to reinforce positive messaging. The media will ask what happened? why? what are you doing about it? They want a good story with new angles that will inform and entertain their audiences. It’s hard not to try to identify the cause, the victims or affix blame—even if all the facts aren’t in. Don’t allow a communications vacuum to occur. If you don’t tell them anything, there are plenty of others who will.

It’s a central tenet of reputation management that what actually happened is less important than what people think has happened: Perception is reality. Time is of the essence. Research shows that consumers and investors decide within a couple of weeks of an event whether a company is going to recover well from a controversy. If you haven’t been paying attention to your reputation before a crisis hits, your company may be perceived as guilty until you somehow prove yourself innocent. One certainty is the high cost of losing consumer or investor confidence; it is a very long road to win back trust. Companies need to preserve and bolster their reputations as carefully as their cash; after all, it’s every company’s most valuable asset.

This article was originally published in the Vancouver Daily Journal of Commerce.

Email Francine to find out more about reputation management.