Your company’s reputation accounts for a significant portion of its overall value. In other words, if you learn how to improve corporate reputation for your business, you can ensure that your brand maintains the consumer trust required to generate revenue.
The Quoted Companies Alliance and BDO released their latest small and mic-cap sentiment index in 2016. This study of UK-based SMEs found that 28% of a company’s value can be attributed helping improve corporate reputation.
The Index showed that the total value of corporate reputation for all UK listed companies could be worth as much as £1.7 trillion (tr). This value is based on the total worth of all the securities on the London stock exchange, which equalled £6.1tr by the close of the third quarter of last year.
Lack of foresight
Yet despite the importance of corporate reputation, the study discovered that only two thirds of SMEs questioned have a plan in place to manage it. At the time, around 40% of UK businesses were not prepared for ‘reputational shocks;’ events which could inflict damage on their corporate image.
Commenting, one financial adviser questioned in the study said: “Many clients fail to appreciate the damage that seemingly innocuous news can do to their share price and ability to raise further funds… High profile failures haven’t helped. Lack of liquidity amplifies small changes in shareholder sentiment.”
Reporting on this story, The Telegraph wrote about a UK-based insurance outsourcer that used to be called Quindell. In 2015, Gotham City Research published an independent report that questioned the firm’s finances and subsequently, its share prices tumbled.
Before the Gotham City Research report, Quindell was worth just over £2 billion. It has since rebranded as the Watchstone Group to recover from the reports fallout, but come 2016 it was only worth £137 million (m).
Meanwhile, the Index showed that reputation crises can be just as harmful for SMEs. The average capitalisation of a UK SME on the main market is £332m, so it could lose as much as £90m if an unexpected event inflicts damage on its corporate reputation.
Tread carefully online
Therefore, if you want to safeguard your company’s bottom line, you need to protect your corporate reputation. It’s important to focus especially on protecting your business’ corporate reputation online. Increasingly, consumers are using the internet to determine whether they should frequent a particular business.
In 2015, online industry publication Moz released research which found that online reviews effects 67.7% of respondents’ purchasing decisions. Furthermore, the research found that companies risk losing as much as 22% of consumers when users see one negative article concerning their business online. This rises to over half (59.2%) if users see at least three negative pieces of content concerning the brand they wish to purchase goods or services from.
Therefore, to protect your corporate reputation you need to ensure that unwanted content does not appear prominently on a Google search for your firm’s name.
The same Moz study found that 50.4% of respondents only look at the first page of a Google search. In other words, if unwanted content appears on the first page of a Google search for your company’s name, it’ll significantly impact your corporate reputation. This could potentially deprive your business of more than half of its customers.
Improve corporate reputation
This means that your business should strive to improve it’s corporate reputation online. This will ensure that you insulate your brand’s image from the negative shockwaves of a reputational crisis. Here are a few key tips you can use to improve your corporate reputation:
- Monitor your reputation: The sooner you are alerted to a reputational shock, the sooner you can limit its effect on your corporate reputation. We would suggest you set up Google alerts for your company’s name. This will bring any issues concerning your venture to your attention, so you can ensure they do not damage the value of your brand. This will help you improve corporate reputation as quick as possible.
- Publicise your company: If your business has corporate responsibility initiatives, publicise them as much as possible via your firm’s website, social media channels and through PR. This will show customers you care, so they will trust that you are a reputable company.
- Encourage positive feedback: As the Moz research quoted above proved, potential consumers trust reviews. If you encourage existing customers to leave positive feedback and publicise these reviews through your company’s website and social media channels, you will show that you are a business that can be trusted to deliver outstanding service.
- Look after your staff: Your staff can be your biggest brand ambassadors. What they say about your company provides consumers with insight into how you operate. We would strongly advise you to put employee well-being at the heart of your business model. This will allow you to develop the positive staff sentiment required to safeguard your corporate reputation. So, happy staff can significantly help improve corporate reputation.
- Become a thought leader: If people perceive your business as an industry ‘thought-leader,’ they are more likely to trust your ability to provide the level of service they require. Here, you should think about launching content marketing initiatives. By engaging in activities such as writing blog posts, publishing guides and reports, commenting on industry issues for the press etc., you can do wonders to help improve corporate reputation.