Why is a Positive Reputation Important in Business?

Clients that come to us in need of online reputation management services often ask, ‘Why is a good reputation important for business?’. A positive reputation is crucial for businesses to thrive in today’s competitive, digital and offline landscape because consumers (on average) engage more often with a business or company they trust. A positive online reputation and presence can act as a sign of reliability and honesty, which in turn can attract more potential customers as well as skilled employees.

Furthermore, a positive business reputation can increase customer engagement and generate greater market value and share for companies. Not only can a positive reputation increase a business’s profitability, but it can also enable businesses to hire and retain more talented, loyal employees – significantly reducing hiring and turnover costs.

At Minc Law, we have extensive experience assisting both individuals and businesses in maintaining and improving their online reputations. We provide holistic digital and reputational risk monitoring and mitigation services as well as content removal services to help businesses avoid long-lasting damage caused by negative or damaging content.

In this article, we explain the benefits of a positive business reputation and explore how to determine your business’s reputation. We also examine the factors that contribute to a business’s good reputation (and how you can build upon those factors).

Benefits of a Good Business Reputation

A good business reputation is important for potential consumers since it indicates trustworthiness and honesty. Customers are willing to pay more when they do business with companies that have built up strong reputations, which in turn helps attract talented employees (who will stay loyal).

The importance of online reviews and a positive online reputation cannot be overstated in today’s cutthroat digital landscape. Roughly 90% of today’s consumers report that positive reviews play a role in their buying decision. On the other hand, companies with a bad online reputation spend an average of 10% more per hire.

In a nutshell, corporate reputation matters – and it can make or break your business.

What Does Reputation Mean in Business?

Your corporate reputation is the collective perceptions of the company’s past interaction and the expectation regarding its future endeavors. In simpler terms, your reputation is based on how past clients viewed their experience with your business, and how they foresee the future of your company.

Your business’s reputation is likely your greatest intangible asset. When your company is viewed as reliable, transparent, and responsible it can set your business apart from competitors – offering a tangible advantage in your market.

What Are Some of the Benefits of Having a Great Corporate Reputation?

Utilizing online reputation management (ORM) tools and strategies like digital marketing, public relations, and search engine optimization (SEO) you can significantly improve your corporate reputation. There are many benefits of online reputation management, but the primary reasons most companies use ORM is to:

• Build trust in their brand,
• Attract customers,
• Increase profitability, and
• Attract and retain talented employees.

Below, we examine each of the core benefits of online reputation management in greater detail to fully understand their impact on corporate reputation.

Build Trust in Your Brand

For most consumers, a company’s online presence is their first interaction with the business – and it determines whether they decide to pursue doing business with you or not. If a potential customer searches your business and finds negative news like lawsuits, workplace discrimination, or negative reviews of your products, they will be less likely to buy from your company.

Your business’s “brand” is a combination of how you want people to perceive your company and how people actually see your company. To be regarded as trustworthy, you must have a well-defined and consistent brand. ORM may help you promote items that are in line with your branding while also eliminating those that are not.

Attract Customers to Your Business

The vast majority of today’s consumers are online, so your business needs a solid online presence. Not only can a positive online reputation help attract customers, but it also makes them more likely to stick with your company.

A brand-centric social media presence can keep your business at the front of customers’ minds and show that you understand your clientele.

Increase Profitability

Naturally, attracting and retaining customers will enhance profitability, but just how much of an impact can a positive reputation have on your bottom line?

A 2016 Harvard Business study, examining the effect of online reviews on a business’s revenue, found that every one-star increase in Yelp ratings translates to a 5-9% increase in revenue. Even if you are a small business just starting, a 5-9% revenue bump can be significant and increase your chances of keeping your doors open for the long term.

Positive online reputations might be seen as a form of free advertising that sets your business apart from competitors, boosts search engine rankings, and drives customers to your business.

Attract and Retain Talented Employees

Consumers are not the only people looking at your business’s online presence. Potential employees also research companies online before deciding to apply or accept a job. And, talented employees want to work for companies with strong reputations.

What Factors Affect Your Company’s Reputation?

Understanding the importance of a positive company reputation is only the first step. From there you need to consider the factors that go into your reputation to exercise any control over it.

Technically, everything can affect your business’s reputation (including the personal reputation of your CEO) making it impossible to come up with an exhaustive list. However, five primary factors have the greatest impact on your business’s reputation:

• The quality of your products and services,
• The quality of your employees and customer service,
• The safety of your products and services,
• Financial performance, and
• CEO Reputation.

The Quality of Your Products & Services

Your products and services are the primary reason that consumers interact with your business. If you offer a poor product or service, it will take little time for people to find out – especially if there is an unhappy customer who spreads their experience online.

The Quality of Your Employees & Customer Service

Hiring talented employees can help improve the quality of your company’s products and services, but you need to be able to properly retain those employees for them to do their jobs effectively.

Even the best talent can only do so much if they are unhappy or unappreciated at work – which is why your company must have a positive reputation with its employees as well.

Additionally, happy employees provide better service to customers. This not only improves your company’s reputation but also helps you attract more new customers in the long run.

The Safety of Your Products & Services

Harmful products or services can lead to a negative reputation for your company. This is especially true if the product has caused physical harm to consumers, but it also applies to business practices like discriminatory hiring practices.

Providing safe and non-discriminatory employment opportunities can help keep criticism at bay, which in turn helps improve your company’s online reputation.

Financial Performance

If your business is not financially stable or profitable, it can be difficult for people to trust in your success moving forward, which can negatively impact how customers view your brand.

Financial performance can be a reflection of your success with the other factors that contribute to a positive reputation. If you have quality products, services, and employees you are more likely to have a profitable business.

Your CEO’s Reputation

Ultimately, the reputation of your CEO will affect how people view your business. If they are viewed as trustworthy and ethical (or not), this image can carry over to their company through their actions or words – if it is positive then so too will be the reputation of the company.

What Does it Mean for a Business When They Do Not Have a Good Corporate Reputation?

The absence of a positive reputation can mean several things for your business. First, you may have difficulty attracting new customers to your business – which means that the only people who are left are either current customers or those who have no experience with your brand whatsoever. This is particularly true if there is anywhere else they could turn instead of dealing with your business – in this case, they will choose the more positive alternative.

Second, a negative corporate reputation can affect your current customers in several key ways. It can cause them to distrust you and become less loyal. It can make customers more likely to leave or abandon your service if another competitor offers something better or at a lower price point. A negative corporate image can spread online and damage your reputation.

Third, in today’s economy, a single negative review posted online could harm your company’s reputation indefinitely – scaring away customers and talented employees alike.

If you do not have a positive corporate reputation then there is a high probability that you will face an uphill battle staying competitive and relevant in your industry.

How to Determine Your Business’s Reputation

You know your business’s reputation is important, but it can be difficult to know where to start when assessing your company’s online reputation.

Why is It Important to Monitor Your Business’s Reputation?

As a business owner, it pays to know what is being said about your company (whether it is shared online or not). Not only can monitoring your business’s reputation provide you with more accurate information about your customers, but it can also provide much-needed feedback on what is working and what is not.

By monitoring your business’s online presence you can avoid potential losses and damage to your brand’s reputation and image. It can also help you better appeal to your target audience and provide the type of service and products they are looking for.

One of the first steps you can take to monitor your online reputation is to claim your business on internet directories like Google My Business and Yelp. This way you can monitor customer feedback and address any negative reviews promptly. Nearly all prospective consumers research products online before making a purchasing decision, and as little as one negative review can turn away potential customers.

Once you claim your business listings, you will have a front-row seat to protect your business’s reputation, as you can then flag fake reviews and respond to customer concerns in real-time.

How Do You Measure & Manage Corporate Reputation?

If you are looking to manage your company’s reputation, it is best to start with a thorough audit of your online presence. What appears when you search your business’s name? What are others saying about your business? Do you have any reviews and what do they say? What are your competitors doing and how is their reputation?

The answer to these questions will typically guide where to start as you attempt to shape your online reputation. If your online presence is lacking or negative, you will need to bolster it. If you have negative reviews, implement a strategic plan to address them effectively and appropriately. A lack of reviews can also be a red flag that indicates you need to ask for more positive feedback from clients or customers.

The stronger the image of your business you establish, the better equipped you will be to deal with negative reviews or publicity. It is worth noting that negative reviews are inevitable in any business. However, if you have a solid system for monitoring and measuring your online reputation you will be prepared to deal with negative reviews so you can minimize their impact on your business.

One way to establish and maintain a positive image is by taking advantage of social media. Social media profiles are typically high-ranking in search results and can operate like free publicity for your company.

How Do People Discover a Company’s Reputation?

An estimated 75% of customers state they make their purchasing decisions as a result of word-of-mouth recommendations. You can often gauge what is being shared about your business by searching online reviews and comments. After all, online reviews are just word-of-mouth recommendations (or complaints) in digital form.

Even clients that hear about a business offline often perform an internet search before deciding whether (or not) to patronize a business. Unfortunately, a single negative article can lead to a loss of up to 22% of customers.

This means it is important to keep up with what customers are saying, and continuously monitor online review sites like Google, Amazon, and Yelp. Most customers are checking at least one, if not all, of these sites, so businesses need to keep an eye on them as well.

If you are selling high-dollar products or services, you should be concerned with your online presence. Higher prices often mean that a potential consumer will conduct even more thorough research before making a purchase decision – so you want to ensure your online image is impeccable.

The Factors That Contribute to a Business’s Good Reputation

All business owners understand that their corporate reputation matters, but it can be challenging to determine exactly what contributes to a positive reputation.

A company’s reputation is influenced by a wide range of factors, including:

• The perception others have of your company,
• Consumer trust in your business,
• Corporate governance and leadership,
• The quality of your products and services,
• Your online presence and reviews,
• Customer experience,
• Social media engagement,
• Hearsay,
• Your offline reputation,
• Corporate social responsibility, and
• Financial performance.

What Contributes to a Business’s Positive Reputation?

Nearly everything your business does (and does not do) can contribute to its reputation. For better or worse, your products, services, employees, and corporate governance matter when it comes to your reputation.

The Perception Others Have of Your Company

How do others perceive you and your company? Your corporate reputation largely revolves around the way others see your business.

Consumer Trust in Your Business

It is imperative that clients trust your business to sell quality products or perform reliable services. Your business’s reputation is a reflection of this trust (or absence thereof).

Corporate Governance & Leadership

People often judge a company by the reputation of its owners and/or leadership. While this may seem unfair at first glance, corporate leadership has a strong influence on the way the company conducts its business.

The Quality of Your Products & Services

If you do not sell high-quality products or services, naturally, customers will not want to do business with your organization – and it will inevitably damage your reputation.

Your Online Presence & Reviews

Today’s consumers are online, so your online presence matters. Since the vast majority of potential clients will find your business after an online search, it is essential that you have positive reviews.

Customer Experience

If a customer leaves your business unsatisfied or disappointed they are likely to share their experience with others. Negative customer experiences can quickly turn into negative reviews and a loss of business.

Social Media Engagement

An active social media presence shows customers that you are willing to meet them where they are – and that you understand your consumers’ lifestyle.

Hearsay

Most people find out about businesses through word of mouth, so hearsay matters. Hearsay can be both positive and negative and can have a significant impact on your business either way.

Offline Reputation

Much like hearsay, your offline reputation can impact your business’s reputation (even if it does not make its way online). Your offline reputation often consists of things like employee morale and the physical presentation of your office or store.

Corporate Social Responsibility

Modern consumers care that the companies they support are socially responsible. The work your company does in the community (like volunteering and donations) goes a long way toward building a positive reputation.

Financial Performance

While profitability does not automatically guarantee a positive reputation, financial troubles almost always have a negative impact on corporate reputations. Consumers trust businesses with a track record of financial success.

How Can You Improve Your Business Reputation?

Fortunately, there are a few things that you can do to improve your business’s reputation even if you are struggling with negative online content.

Develop & Maintain Your Brand Identity

Tell your target audience the truth about your business. Customers can detect dishonesty easily, so they will be on guard if you try to pass your business off as something it is not.

Ensure you are familiar with your company’s values and find ways to share corporate values with the public. This type of information is useful for establishing your brand reputation in a way that connects with customers on an emotional level.

Solicit Reviews & Testimonials

Testimonials can also be a powerful tool to use to boost your reputation. If you are lacking reviews (or struggling with negative reviews) one of the best ways to improve your reputation is by asking your satisfied customers for honest feedback.

Improve Your Customer Experience

Put yourself in your customers’ shoes. Would you be happy with the customer service experience? Would you be satisfied with your products? If you answer, “no” to either of these questions, you need to adjust your products and services to better serve your customer base.

Monitor & Maintain Your Online Presence

Actively monitor your online reputation so that you can promptly respond to feedback, negative and positive alike. Use what you learn from online reviews to improve your products and services.

Also, make sure you engage with your customers wherever they spend their time online. This will show that you understand your clientele and value interacting with them.

Who Maintains a Corporation’s Reputation?

While most people probably think a company’s leadership is solely responsible for a company’s reputation, this overlooks the importance of many other stakeholders. While a CEO’s reputation is perceived to contribute nearly half of a company’s reputation, that means the other half falls on the shoulders of others.

In reality, many people are responsible for maintaining a business’s reputation, from customer-facing staff to management, and even clients. Customer service staff contribute to the customer experience, which in turn reflects a company’s reputation. Clients themselves even contribute to a company’s reputation by how loyal they are to the brand, and whether they share their experience with others.

Why Reputation Management is So Important in Business

Your business’s reputation will have a direct impact on your bottom line, meaning your reputation can make or break your business. Brand recognition and trustworthiness all play into whether you will attract and retain a customer base capable of supporting your operations.

Why is Reputation Management So Important in a Business?

Put simply, a positive reputation means more customers, better employees, and greater profitability – a must in any business endeavor. Not only does a good reputation increase the number of customers you attract, but it can also increase the quality of your customers.

Customers are more likely to spend more money with businesses that have a positive corporate reputation – and they are also more likely to come back for future products and services.

At the same time, companies that have a reputation as a great place to work open the door to a more talented pool of potential employees. And a talented workforce will set your business apart from your competitors – attracting even more business.

What Are the Core Elements of a Good Corporate Reputation?

While many factors contribute to a positive reputation, there are several components that apply to all businesses (in virtually all industries).

The primary elements of a good corporate reputation are:

• Quality products or services,
• Quality employees who offer stellar customer service,
• Reputable corporate leadership
• Corporate social responsibility, and
• Financial stability.

What Does a Good Business Reputation Mean to Your Customers?

A sound corporate reputation lets your customers know they can rely on your company to deliver the highest quality goods and services. It also sends the message that you value your clients and care about their experience with your organization. This gives them a reason to trust and patronize your business for years to come.

We Can Help Your Business Protect Its Online Reputation

Minc Law is one of the top online defamation law firms in the United States. We have years of experience protecting individuals’ and businesses’ reputations online. Our reputation management professionals can help stop online attacks, remove negative online content, and improve your business’s online reputation.

If you would like to explore custom online reputation management services, reach out to schedule your initial, no-obligation consultation by calling (216) 373-7706, speaking with a Chat Representative, or filling out our online contact form.