Can you operate in a place where you don’t have a corporate reputation but still sell products? Absolutely. We see companies like that selling products on Amazon all the time. They’re usually the cheapest and accompanied by less-than-credible reviews. Companies like this might sell luxury fakes at the farmer’s market. If you look at these companies, you will find dubious backgrounds or thin reputations. And yet, many of those companies are not trying to change that. This article is not for those companies. This article is for ambitious brands who want to be the premier brand in their category. If you are an ambitious company – how important is company reputation? Investors care about a corporate reputation. They care a lot – and investors dig deeper and look for signals of success when there is economic uncertainty or capital is constrained. So what do investors look for when they consider a company’s reputation?
What Are The Benefits of a Positive Corporate Reputation
My Dad worked for IBM for many years – and during that time, there was a saying, “No one ever got fired for hiring IBM.” IBM really set the standard for B2B Tech PR. That is a reputation goal. Having that kind of brand trust is invaluable. According to investors, brand loyalty is the number one benefit of a positive reputation.
Consumers see product or service reviews as the #1 type of content most effectively enhancing a company’s corporate reputation. Consumers know there’s no way to run from a bad product, and they also know that people love to crow about a good product – it makes people feel “in the know.” And customers eat up content that confirms their ideas about a particular product and brand, so there is good reason for media outlets and journalists to create this type of content.
Another reason customers love to see your product in the news is that it reconfirms their choices. It appeals to their ego and triggers their confirmation bias. This is especially when the person or brand confirming their choice is one they admire or respect. This is why influencer relations and media relations are two of the most powerful arsenals in your reputation management toolbox.
Investors also noted that a positive corporate reputation positively impacts crisis management as well. Brand trust is also a powerful tool during a crisis. When you have a PR crisis, the loyalty of your customers and their trust in your response will ultimately decide its impact. If customers aren’t buying it, that’s an indication of trust, and it means you’ll have to earn back their loyalty. Securing and maintaining trust is increasingly difficult in our media-savvy and highly volatile world. And it’s true – it is far easier to lose trust than to gain it. But that’s the reason why reputation management and PR are so important to growing companies. USC Annenberg Global Communication Report
Employee Moral and Retention.
Coming in at #3 was employee morale and retention. Top tier employees want to feel good about where they work, and they don’t want their own personal reputations sullied by bad actors. Great media coverage, from CEO thought leadership to statements about important issues, sends signals to employees that their employers are engaged with the world around them.
It’s not just that – positive media coverage also excites ambitious employees for another reason: they think they may have a chance to improve their reputations through media opportunities. That could be anything from appearing in a brand video to being interviewed about a new product.
The more employees feel proud of where they work, the more likely they are to be committed to the company and its mission.
USC Annenberg Global Communication Report
Why would investors consider product sales last? Because sales are something that can be changed reasonably easily with the right investment. Employee morale and stock performance are harder to change; those two are not nimble. Plus, a good corporate reputation might not have a direct line to the purchasing cycle, but trusted companies do better in sales, can charge more, and have longer lifespans than untrusted companies and brands. So if your goal is increased revenue, trust needs to be one of your most critical strategies.
Purpose Driven and ESG – Where Do We Stand Today?
During the pandemic, there were some fascinating corporate shifts in purpose, value-driven messaging and sustainability, and it lead to all-time highs of customer trust in companies. People were looking to companies for the moral guidance that was missing from established sources, the CDC, the FDA. Everyone seemed to be ham-fisted, and the only ones communicating clearly were companies. Besides the fact that this underscores the importance of solid communication, it was also a new era in purpose-driven PR. But today, we’re seeing a bit of public backlash and businesses are wondering whether they should continue to social impact, ESG, and purpose driven initiatives.
Well, it turns out, everyone from investors to customers are watching companies and want to support companies with a good compass. In the same report – customers and investors downgraded the idea that companies need to take a stand on important social issues. What this tells us, is people want companies to walk-the-walk and do it without crowing about it all the time – but they DO want to find it and it will impact their buying process, especially when there is a competitor.
Reputation building is THE most important outcome for PR, because with a positive reputation, all things are possible. The doors of opportunity open faster, and stay open longer. Contact us today for a reputation assessment that provides you with insights that give you the competitive edge you need to reimagine the future of your company.