Company reputation has never been more important, nor has it been more influential. In fact, reputation underpins industry, regardless of sector or geographical location. Without deliberately and carefully building and maintaining a positive company reputation, businesses will never be able to fulfil their potential and achieve their objectives.
Why is business reputation important?
An effective company reputation improves stakeholder relationships, regulatory compliance, partnerships and media input. Ultimately, a positive business reputation means consumers are far more likely to trust the brand and act on its advertising.
How do you describe a company’s good reputation?
Consumers, the media, stakeholders, shareholders, investors and employees are all scrutinising businesses. They are looking for the quality of products, services and customer experience as well as their ethics and values. Added to this, eyes are always on business leadership.
Over the last few years, and particularly since the pandemic, the attention paid to business values has intensified. The result is that companies are expected to not only deliver on their promises, but also to contribute positively towards their community and the wider environment.
What makes a business have a good company reputation?
According to a September 2023 report by global market research experts Ipsos, titled Building reputation in 2023: the link between corporate reputation and business efficiency, there is “conclusive proof between corporate reputation and business efficiency.”
Furthermore, the report shows that by building trust, companies have a clear advantage when it comes to dealing with reputational crises and for efficient marketing of products.
What are some examples of reputation?
At Igniyte, we know just how important a company reputation is to every aspect of business. A positive reputation starts with data gathering and analysis. Companies need to know everything that could influence their reputation. It’s this data that will form the basis of any strategic approach to company reputation.
The report from Ipsos shows that a positive business reputation unlocks value across the following:
- Regulatory/ policy compliance: reputation informs regulatory support.
- Consumers: building trust strengthens trust in a company’s brands, which further increases loyalty and buy-in.
- Financial community – ensures a resilient share price and supports growth.
- Media: increases credibility of communications.
- Employees: boosts employee engagement and motivation to deliver high performance levels.
- Business partners: fosters productive collaboration with suppliers and other stakeholders.
Building trust and ‘benefit of the doubt’
Statistics show that, on a global level, 70% of people (21% definites and 49% probables) and are generally willing to give companies the benefit of the doubt in times of crisis. But this trust is definitively linked to levels of trust in that company.
In other words, the reputational work has to be carried out prior to any crisis in order to retain consumer trust. Of those that say they trust a company a ‘great deal’, more than half are willing to give them the benefit of the doubt. When the trust isn’t there and consumers merely feel neutral, the percentage of those willing to give the company the benefit of the doubt dives to just 10%.
Consumer trust and marketing efficiency
Consumer trust also plays a part in product use and advertising. Those that trust a company or brand or more likely to even see the advertising in the first place. This is partly down to targeted ads online, but it’s also due to how much people pay attention. If the brand trust is already there, then adverts are going to penetrate the consumer’s consciousness to a much greater extent.
All businesses create marketing efficiency strategies to ensure that the ratio between overall sales and advertising spend works. This is often used as a marker for business success.
And for corporate communications, there is a clear and definable value in being trusted by consumers. The combined benefit from higher levels of consumer engagement and higher levels of marketing efficiency shows that there is real value in spending time and money fostering a positive company reputation.
5 factors that significantly contribute towards corporate reputation
- Quality of products services.
- Quality of employees.
- Quality of customer service.
- Safety of products or services.
- Respect for customer or employee privacy.
Quality should be every company’s watchword when it comes to company reputation. The higher the quality of goods, services, employees and communications are all absolutely critical for a positive business reputation.
There are may more elements that need to be considered when crafting and defending a company’s reputation. These include innovation, leadership, financial performance, cost value, ethics, technological advancement, corporate culture and purpose, quality of leadership team (including CEO or Chair), employee training, diversity and inclusivity, CSR, global presence and philanthropical or charity support.
6 key company reputation facts to remember
- A company’s efficiency is strongly impacted by its reputation. A strongly positive corporate reputation strengthens and solidifies relationships with all kinds of important stakeholders.
- Building stronger consumer trust via a positive reputation ensures the increase of marketing efficiency across industry sectors and across regional divides.
- Consumers are far more likely to listen to and act upon advertising from a company that has a positive reputation. This trust then impacts the way in which they choose to spend their money and whether they choose the company’s brands or services.
- Building a reservoir of trust with consumers and stakeholders ensures that companies have plenty of equity to improve the business performance and to optimise the chances of a positive outcome should the company face any difficulties.
- A company with a positive reputation and trust with consumers and stakeholders will be better placed to face off any crises that may occur. This is where the benefit of the doubt comes in – people will simply be more likely to give a company a chance if they already trust them and their voice. Trust can be seen as a safety net that every company needs to have in place.
- Building a positive reputation is vital in every sector, but even more so in high risk sectors. As the trust increases, so does the potential for being supported through any difficulties that may occur.
To read more about how Igniyte can help you business improve its reputation, click here.
