The Benefits of a Good Reputation
The benefits of a good online reputation include higher trust, better talent, less risk, and more profit. But the advantages of a good corporate reputation extend beyond that. Companies with good reputations tend to be treated better online – even given a second chance.
You can change your reputation over time.
Just like reputations can be tarnished, they can also be repaired so that you can reap the benefits of having a positive online reputation. It’s essential, and it’s worth the time to keep it in the best possible shape.
There are countless benefits to maintaining yours, but here are the ones we find most important.
- Higher trust. People trust a brand or person with a good reputation more.
- Increased profits. Companies with high star ratings and reviews get more business.
- Better talent. Brands with a positive reputation earn better employees.
- Less risk. People move in crowds. Call it the “broken window theory” of reputation management.
- Gentler treatment. Companies that share the same core values as their clientele will likely overcome a reputation scandal more easily than one without. Think Apple Computer vs. Monsanto.
Now that we’ve provided a basic overview of our top benefits to a good reputation, let’s dive into the details.
A Good Reputation Leads to Higher Trust
Nearly 3 out of 4 consumers trust a company more if it has positive reviews. Positive online reviews can significantly impact consumer trust.
Brands with a good online reputation are trusted more because people depend on the opinions of others. If people appear to trust a company or person, others will likely follow suit with the same sentiment. If you can’t even get people to trust your brand, you will have difficulty selling your products.
Research shows that 83% of people trust brand recommendations from friends, and nearly 70% trust consumer opinions more than paid advertisements.
When people trust your company, they are likelier to remain loyal to your brand. Effective online reputation management is not just about attracting new customers – it also strengthens relationships with existing ones.
Businesses can enhance loyalty by:
- Actively soliciting customer feedback
- Monitoring reviews
- Addressing any concerns quickly and transparently
Their responsiveness shows customers that they genuinely care about providing a good experience beyond just making a sale.
This heightened trust dramatically reduces risks associated with the brand. Any marketing campaign or new product faces uncertainty – but a buffer of trust and goodwill mitigates potential damage if things go wrong.
A single mistake does not ruin the company’s image when they have accumulated a reservoir of positive sentiment.
Why Does a Company Need Reputation Management?
One way reputation management services help build trust is to make your business more transparent in all the right places.
You are showing people that your business listens to queries and responses by:
- Listening to customers online
- Responding to comments (both good and bad)
Even something as simple as replying to a comment on Instagram can improve your reputation and build customer trust.
It’s also paramount to have a good review management strategy.
Since most people trust the opinions of people who overpay advertisements, your online reviews need to be the best they can be.
A 2018 study found that 91% of people trust online reviews as much as personal recommendations. And if 83% of people trust brand recommendations from friends, then you get the picture.
Reputation Can Increase Profits
Building on the importance of your online reviews, companies with good online reviews tend to attract more business. Now, it’s more important than ever before to have lots of new, relevant reviews for your business online.
Reviews and reputation have become so important that they directly impact 93% of purchasing choices.
Before committing to a purchase, most consumers now spend time researching a company and reading through customer reviews.
A strong reputation signals quality, value, and satisfaction, making the company more appealing than alternatives without that social proof.
In fact, every additional one-star Yelp rating causes an increase in the business’s revenue as high as 9%, according to a Harvard Business School Working Paper. The benefits of online reputation management can translate into extra income for growth.
Companies With Good Reputations Attract Better Employees
A credible online reputation acts like a magnet to attract talent and customers. Job seekers often research companies online before applying or accepting offers, looking for red flags.
Reviews are equally as crucial for attracting employees as they are for attracting customers. So much so that only 1 in 5 job seekers would consider working for a company with a 1-star rating!
People want to work at a good company that is “going places.”
They want to work at a company that shares the same core values and beliefs as them, which they can trust. And they trust the opinions of current and past employees.
A reputation for integrity and values makes candidates more eager to work there. A poor employer reputation detracts top candidates, while a good one gives a competitive recruiting edge.
Along with workplace reviews, positive content online shows that your company has a favorable culture. Companies with better reputations tend to attract more, and therefore better, talent.
Lower Reputation Risk
A negative online reputation can spiral into further damage if not actively managed.
This may be because of systemic problems within the company, but it may also be the reputation management version of the “broken window theory.” The theory states (basically) that a warehouse with broken windows tends to attract more vandals. Improving a tarnished reputation may sound daunting, but some steps can save a damaged reputation and reduce reputation risk down the road.
However, companies can take proactive steps to repair their image and minimize future risks:
- Respond professionally to negative reviews and feedback. Avoid being combative or defensive. Kill bad press with kindness and understanding.
- Identify any legitimate shortcomings called out in reviews. Develop a plan to improve policies, products, or services.
- Increase positive brand visibility through community outreach, social campaigns, and proactive PR.
- Monitor online conversations regularly. Quickly address emerging issues before they spiral.
- Be transparent in all communications. Admit mistakes and inform customers about solutions.
- Revamp online profiles and websites to showcase positives, such as awards, values, and customer stories.
- Don’t try quick fixes or gimmicks. Rebuilding reputation requires consistent, genuine care for the customer experience.
- Focus on delivering exemplary service and value. New positive experiences gradually push down old negative impressions.
With consistent, patient effort, companies can repair damage to their online reputation. A recommitment to customers naturally improves perceptions over time.
Reputation Directly Impacts Sales and Revenue
In today’s highly competitive business environment, how people perceive a brand directly impacts its sales and revenue numbers. Companies with a good reputation can spend less on marketing and advertising than other firms.
The rise of social media and the shift from conventional advertising means businesses need to actively engage consumers and focus on building a solid online reputation.
Reputation management on the web is not just about countering harmful content and generating positive reviews. It’s about building a reputation that makes a brand synonymous with its core values and the primary needs of its target market. This is precisely why businesses need to have a comprehensive online reputation management strategy in place.
Additional Benefits of a Good Reputation
A solid reputation has several direct and indirect benefits for a business.
- A strong and well-managed reputation marketing campaign ensures businesses have a great first impression on their prospects. It focuses on building a positive brand image by identifying the key customer touchpoints and using them to make positive first impressions.
- A comprehensive online reputation management (ORM) strategy not only highlights the strengths of a business but also effectively counters any negative propaganda by its competitors.
- A solid online reputation that increases trust means a higher chance of cold visitors turning into prospects and customers.
- An excellent online reputation helps businesses establish themselves as thought leaders and the go-to source for all industry-related problems. This allows businesses to earn free media coverage and elevates them above the competition.
How can companies cultivate a stellar reputation that realizes these benefits? The key is consistency.
Brands must align internal policies and external messaging with their desired values. They should monitor online conversations to ensure they meet promises and stated ideals.
Reputation management enables shaping public perception in a strategic direction. But authenticity is critical – brands cannot manufacture a reputation overnight or through gimmicks. They must deliver genuine value over time through products and services.
There are countless stories of brands derailed by PR crises or tone-deaf behavior. While mistakes are inevitable, brands with discipline recover stronger than ever. They redouble customer care, own up to errors, listen to feedback, and correct course quickly. Consumers are forgiving when brands have built up good faith capital.
Online reputation by the Numbers
To further clarify any doubts about the importance of having a solid online reputation, take a look at these eye-opening stats.
- 90% of consumers say positive reviews have influenced their purchase decisions.
- Online search is the most trusted source of information about people and companies for 65% of internet users.
- 86% of consumers use the internet for research before purchasing.
- 79% of consumers place equal weight on online reviews and personal recommendations.
- 58% of Fortune 500 executives believe reputation management should be a core part of every organization’s marketing and branding strategy.
- 84% of marketers believe building trust will be the primary focus of future marketing campaigns.
All the above statistics point in one direction — online reputation management is the future of marketing and branding.
Google is the New Business Card Online
Regarding reputation management on the web, Google’s first page is the new business card. Most people never make it past the first page. Customers and prospects judge brands based on what Google’s search results say about them.
A recent study showed that over 45% of consumers discovered information via a Google search that changed their minds about doing business with a company.
Therefore, every business must have an online reputation management strategy that highlights its strengths and makes it look good on Google’s first page.
Companies with effective reputation management strategies can expect to reap the benefits of their efforts. These benefits include:
- Higher trust
- Better talent
- Less risk
- More profit
By diligently monitoring and shaping public perception with authenticity, brands can thrive.
About the author
Kent Campbell is the chief strategist for Reputation X, an award-winning online reputation management agency. He has over 15 years of experience with SEO, Wikipedia editing, review management, and online reputation strategy. Kent has helped celebrities, leaders, executives, and marketing professionals improve the way they are seen online. Kent writes about reputation, SEO, Wikipedia, and PR-related topics, and is an expert witness for reputation-related legal matters.
