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 are likely to overcome a reputation scandal easier 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
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 are likely to follow suit with the same sentiment. If you can't even get people to trust your brand, you're going to have a difficult time selling your products. In fact, research shows that 83% of people trust brand recommendations from friends, and nearly 70% trust consumer opinions more than paid advertisements.
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. By listening to customers online and responding to comments (both good and bad), you are showing people that your business listens to queries and responses. Even something as simple as replying to a comment on Instagram can improve your reputation and build trust with customers.
It's also paramount to have a good review management strategy. Since most people trust the opinions of people overpaid advertisements, your online reviews need to be the best they can possibly 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. 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 reputation attract better employees
Reviews are equally as important 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, one that they can trust. And they trust the opinions of current and past employees. 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
Companies with bad online reputations tend to earn even worse reputations. 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 like a daunting task, but there are steps that can save a damaged reputation and reduce reputation risk down the road.
Reputation directly impacts sales and revenue
In today’s highly competitive business environment, the way people perceive a brand directly impacts its sales and revenue numbers. In fact, 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 strong online reputation.
Reputation management on the web is not just about countering negative 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 that 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 build 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 strong online reputation that increases trust means that there’s a higher chance of cold visitors turning into prospects and customers.
- A good online reputation helps businesses establish themselves as thought leaders and the go-to source for all industry-related problems. This helps businesses earn free media coverage and elevates them above the competition.
Reputation by the numbers
To further clarify any doubts about the importance of having a strong 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 both 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.
In fact, a recent study showed that more than 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, and more profit. For more information on how you can improve your reputation management strategy, contact us today.