Businesses can sometimes come under fire online. Is yours? People can use sites like Yelp, Google Plus and Facebook – to name a few – to complain or outright thrash a business. It this a concern of yours for your business? Having people complain isn’t new. Business reputation has been around forever.

Story of the Butcher

For example, in the past, if a butcher sold bad meat to someone, that person might go to the town tavern and talk about it and how his family got sick. One person would tell another until the whole town would knew about it …and ultimately the people of the town would not trust the butcher. Maybe that original complainer and his family got sick for a different reason and just decided that the butcher were to blame. Maybe this same guy just didn’t like the butcher, so he started rumors. Is the butcher a helpless victim? If the butcher were to pre-emptively start off with a strong business reputation, it Is more likely that the townspeople will still trust him through his business misadventures.

Benjamin Franklin once stated, “It takes many good deeds to build a good reputation, and only one bad one to lose it.” Yes, reputation is absolutely critical to a business’s survival and needs to be managed carefully. But there is a large difference between risk management (preventing reputation problems through a good public reputation) – and crisis management (dealing with reputation problems only in times of crisis). Businesses need to have a strong reputation before the crisis occurs, so that they can enjoy the benefits of “consumer preferences, support… in times of crisis or controversy, and the future value… in the marketplace.” (Business in Focus Magazine). We can analyze the examples of BP and Toyota to learn what to do – and not do – to sustain a strong and confident reputation.

Head Shaking

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Platform supply vessels battle the blazing remnants of the offshore oil rig Deepwater Horizon. (Photo credit: Wikipedia)

Since the oil spill April 20, 2010, BP has taken on a lot of criticism from the media, politicians, and Americans in general. Their message about caring for the environment did not match their actions. “And although the company finally fired Hayward [the previous CEO], paid restitution, enhanced its drilling standards, and sponsored several feel-good TV commercials, it has failed to regain the trust it supposedly covets,” reports Forbes Magazine. Bob Dudley, the new CEO, promised to provide regular progress reports about the cleanup. But, since December 2010, BP has issued only 118 press-releases and few mention to the spill at all. BP has not kept their word. They seem to be banking on the hope that people will eventually forget. On social media, however, not many people have chosen to “like” or “follow” BP. The company continues to try to regain social confidence, but have yet to win back the hearts of the public. Thought to ponder: What was BP’s reputation before the spill? The follow-up question remains: How will the environmental event – and the company’s leadership response – continue to affect BP and it’s future?

Nods

On the other hand, Toyota has done incredible things for it’s reputation-in-crisis. From 2009-2012, Toyota recalled 10 million vehicles “due to pedal/floor mat entrapment and accelerator pedal mechanical problems,” writes Forbes. While they had previously been known for building quality products, the news story of the family who died because their vehicle gas pedal froze, is permanently etched in the minds of millions. Their automaker ranking dropped from 17 to 139. This could have caused insurmountable damage to the automaker’s reputation, and would have to many businesses in Toyota’s situation. But because of their response and actions, five years later they’ve rebounded to 74. But what did they do? First, they started with a very visual and strong reputation, that was built and earned for decades. After the crisis, they emphasized the difference the Camry had made in people’s lives in a commercial, reminding people why they should love Toyota. Then they ran a philanthropic campaign where they gave away 100 cars in 100 days. They engaged the public by letting them decide who to give Toyota’s donation to. They continue to make efforts to connect with customers in a very personal way.

The Business in Focus Magazine gives us several ideas in how we can “increase profitability and establish ourselves in a market”: (The following 9 points from Business in Focus Magazine)

  1. Establish trust – Keeping your word no matter what in terms of providing services, paying vendors when they are due, and keeping promises to customers. This will help solidify and build credibility with customers.
  2. Be responsive – Return calls and answer emails promptly, letting the customer know their importance to you and your organization.
  3. Resolve errors and mistakes – Never make excuses or place blame on the customer if it is an issue that is the fault of you or the company. An irate customer can become your biggest ally if you make an effort to resolve errors or mistakes as quickly as possible.
  4. Offer value – Offering free services to loyal customers and paying attention to details and preferences of the customer can go a long way towards establishing your company’s reputation in the market.
  5. Be sensitive to privacy – With rampant identity theft and hacking, being aware of the sensitive nature of financial information is more important than ever.
  6. Become technologically savvy – Demonstrating a proficiency in technology can add to the reputation of a company and is critical to being perceived as a competent and capable business. Computers, software, voicemail, websites, and social media sites must be kept up to date.
  7. Communicate effectively and transparently – Correspondence such as letters, emails, voicemails and other methods of communication should be direct and to the point. Use correct spelling and grammar and leave contact information for the customer and company information such as full name, address, phone, fax, website URL, toll-free number, hours and other vital information – is displayed in prominent location.
  8. Maintain a polished and professional website – Having a clean, up-to-date, professional website is absolutely vital today, regardless of the type or size of business.
  9. Community Service – Generosity to local organizations such as non-profits can go a long way toward building and establishing the reputation of your organization. Community service can include providing a service pro bono or donating money, time or food for an event or fundraiser.

Have You Measured Your Reputational Risk?

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Many businesses have learned the hard way that a reputation is not something to risk. Has your business evaluated itself recently and asked where it’s public reputation stands? Have you measured your reputational risk by assessing 1. Whether its reputation exceeds its true character, 2. How much external beliefs and expectations change” [and] 3. What is the quality of coordination inside the business and it’s groups? (From Harvard Business Review.)

Truth vs. The Image

Does a business’s reputation surpass its true character? Reputation is at risk when the company’s reputation is more positive than its fundamental truth. Abraham Lincoln said “Character is like a tree and reputation like its shadow. The shadow is what we think of it, the tree is the real thing.” This is one of the problems that BP ran into. While they proclaimed to care so much for the environment, they had been running into “reality” problems for years. For example, in March 2005 there was an explosion at BP’s Texas City refinery, in which 15 people died. In August 2006, they were also responsible for the leak in Alaska’s Prudhoe Bay oil field from a rusted pipeline. The gulf oil spill in 2010 was not the first incident to show that there was a problem matching up BP’s reputation and reality.

When reputation meets character, companies are not always recognized. For instance, Chrysler, Ford, and General Motors improved their cars so much that “the quality gap between them and vehicles made by Japanese companies had largely closed by 2001,” explains the Harvard Business Review.

Keeping Up With the Times

How much have external beliefs and expectations changed? When customer’s expectations change and one’s competitors change, your business needs to change too. In 2005, General Electric set a higher standard for other companies through their “ecomagination” initiative. “It committed GE to doubling its R&D investment in developing cleaner technologies, doubling the revenue from products and services that have significant and measurable environmental benefits, and reducing GE’s own greenhouse emissions,” continues Harvard Business Review. GE changed the standard, and it’s competitors had to meet that. GE influenced their competitors to change towards cleaner technologies, and a cleaner reputation.

Expectations can also vary by region or country. For instance, in China, Oreos come in many different flavors because the Chinese don’t appreciate stark sweetness like those in America do. Oreo changed according to the demands and expectations of their customers.

Coordinatapalooza

Is there quality internal coordination in your business? A company runs reputation risk when one part of the company, such as the marketing department, makes a big advertising campaign before the engineers have “ironed out all the bugs” (Harvard Business Review). Nobody should make promises they can’t keep.

Your reputation is something critical to your business’ survival, and you should be focusing on it every day. If your business is not well known yet, build the reputation strong and solid. It cannot be overstated that you must build a quality reputation foundation, in order to weather the ups and downs of the future. Maintain the image so it matches the actual company. Improve your company so that your matches the image you want it to have.

 

Content and Image Sources: https://medium.com/@SeanBurrows/reputation-management-negative-online-reviews-427d3ebe295e, http://scottmarketingservices.com/wp-content/uploads/2014/10/reputation-management.jpg and https://hbr.org/2007/02/reputation-and-its-risks

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