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What’s a good reputation worth to your business?
With so many pressing day-to-day issues, it can be hard for small business owners to focus on your business’s brand and reputation, but by ignoring these things you may set yourself up for additional risks.
We all understand operational risk: Your assembly line is shut down by a power outage, your sales team is out with the flu, a snowstorm closes the airport and you can’t ship your product, or you miss the trade show in Orlando. Business owners are pretty adept at adjusting to operational risks.
But what about reputational risk? Is cultivating your reputation factored into your strategic plan? How valuable would it be for all of your customers to be raving about how much they love your service on Facebook, Yelp, LinkedIn or other social media outlets?
In banking, an industry whose reputation took a hit in the 2008 financial crisis, we spend a lot of time protecting and building our reputation. Bank of the West was honored to be ranked the third most reputable bank among the largest banks in the United States, according to a recent Reputation Institute survey. One of the reasons cited for our ranking is a strong focus on serving customers.What is your company’s reputation?
A colleague of mine flew a low-budget airline recently, and his flight back from Eugene, Oregon, was delayed by seven hours! Another airline might have done something nice to try to compensate for the inconvenience. Not this airline. But nobody expected any warm gestures because this airline has a reputation for being cheap.
On the other hand, when my wife and I stayed at a luxury hotel a few years ago, we were wowed from the second we stepped into the lobby. During our stay, employees remembered our names, greeted us, and seemed to care about making our stay as memorable as possible. Four years later, we still talk about that trip and how much we would like to go back.
Yes, reputation matters. Business leaders identified four primary, tangible benefits of a good reputation in the Reputation Institute’s 2014 Annual Reputation Leaders Survey, “Playing to Win in the Reputation Economy,” (which you can download here):
- Competitive differentiation;
- Attracting and retaining top talent;
- Enhanced collaboration and partnership opportunities with opinion leaders and policy makers; and
- Better crisis management.
Successful businesses understand the importance of managing their reputation. One key first step toward successful reputation management is defining how you want customers and the public to perceive your business. Reputation plays a central role in your business’s strategy plan. Once you’ve defined the reputation you want, here are five considerations you may want to keep in mind as you run your company:
1) Are your company’s operations consistent with its reputation?
2) Do your employees know what the business’s reputation is and is their performance and behavior promoting that reputation?
3) How do you communicate to employees, customers, prospects and the public about your reputation?
4) How do you monitor your reputation? Can you survey customers from time to time through various channels, such as social media, focus groups, or in daily interactions with customers and prospects?
5) How will you respond if the company’s reputation takes a hit? Does your business have a strategy to respond to criticism in social media or elsewhere that may harm your reputation?
In this era of social media it may be more important than ever to cultivate a positive reputation, monitor your reputation in the market, and have a plan to protect your reputation if something goes wrong. Today one or two unhappy customers who take to social media channels can have a dramatic impact on a business. Get hundreds complaining and you’re sure to make news. Similarly, businesses that respond effectively to complaints may actually bolster their reputation as being a responsive business that really does care about its customers.
Make reputation management part of your business plan from the outset and then monitor and protect that reputation. In the long-run, I think you’ll be glad you did.Read More ›