In terms of risk to future success, a damaged reputation is one of the worst things that can happen to a business. Corruption, fraud, and security breaches all have a huge impact, but once customers lose confidence in a company, the decline can be swift and brutal. This is more of a concern in the modern world because your client base is not merely watching the news or reading the local paper. Instead, social media can distribute the latest news about a business to a global audience within minutes. From national media coverage about customer comments to allegations of staff misconduct, your apparent failures can reach customers just as easily as your triumphs.
Where do threats to a company’s reputation originate?
You need to be constantly vigilant when it comes to protecting your brand image, but some situations can be more concerning than others. Cultivating a trustworthy and desirable image is a vital part of marketing, but when a problem is not handled well, or at all, the hard work can be quickly undone. Here are a few issues to be aware of and be ready to manage if necessary:
Viral posts on social media
A company’s social media accounts and comments on social media by your customers can be a minefield. A business should never neglect these posts because the potential for reputational damage is sizable. Whether you have a disgruntled ex-employee writing about your business, an angry customer, or an inappropriate post, the event should be dealt with immediately. In most cases, being transparent and honest in your responses is the best policy, as it shows you have nothing to hide. If you do need to apologize, say sorry to anyone who has been affected. Finally, back this up by getting legal advice if the problem rumbles on.
Data breaches involving your customer’s private information
No company, large or small, can afford to be complacent about cybersecurity. Experiencing a data breach is one of the most common ways a business loses the faith of its client base. Along with the PR fallout, you are obliged to spend vast amounts of money on managing the problem in practical terms. The aftermath of a breach might involve upgrading software, retraining the IT team, and giving other employees security protocols to follow, all of which takes time and is not cheap. Nevertheless, if you do suffer data loss or any other compromising of personal data, it’s vital to handle the situation competently. The cost may be high, but your reaction will make a difference in how you are perceived once the dust has settled.
A lack of adequate customer support
Even if you get everything else right, one of the main reasons customers turn their back on a company is a lack of support. You may feel too busy to deal with each message or call, but if someone does get in touch to report a problem, never ignore them. A challenging and potentially explosive issue can be diffused in minutes by a sympathetic customer care agent and an offer of compensation. Leaving the problem too long before responding can make a customer even angrier. Moreover, they will tell friends and family about their experience or write it up on social media. So, forget platitudes and open genuine lines of communication with your client base.
Why is reputational damage so harmful?
A brand image tells an audience what your company has to offer, what you’re about, and what sets you apart from the competition. Once that’s in place, you can begin to build a lasting trust in your product or service. Managing the image of your organization requires continual work and ever more innovative ideas. Unfortunately, even the most dependable reputation can begin to unravel when your brand identity is called into question. That is because you lose your investors’ and customers’ trust, meaning sales drop off and your turnover decreases. Therefore, as reported in the Deloitte Global Survey on Reputation Risk [email protected], harm to your reputation can immediately translate into your revenue stream drying up. Although you’re taking less cash, you need to pay to have the problem fixed and to retain clients.
Surviving a hit on your company’s reputation
From Samsung’s exploding Galaxy Note 7 in 2017 to General Motor’s vehicle recalls in 2014 and the 2013 Target Corp data breach, many companies have faced a crisis and emerged intact. Unless the problem is truly catastrophic, there are ways that negative press can be managed. Responding in a positive, helpful, and timely manner is vital. Businesses with a public relations team will be better prepared, so if you don’t have a PR team, it’s worth thinking about how you would deal with a future problem.
Defend yourself if necessary
If libelous statements have negatively affected your business, it makes sense to take things further. Taking action on your own can be confusing and costly, which is why most companies opt for a robust insurance policy. Next Insurance offers commercial liability insurance online, so getting tailor-made coverage in minutes is effortless. They specialize in supporting smaller companies and self-employed people facing slander, defamation, and libel cases.
Stay calm and don’t react immediately
Bad publicity, which is not severe enough to be considered libel, should be managed in a considered manner. You may be upset or angry about a news story or comment on social media, but before you respond, take a minute to think. When you feel less emotional, start formulating a practical and professional response.
Be present and remain positive
Even if you feel stressed in the aftermath of unfair criticism, your public announcement should remain positive. This will remind people of what a reasonable and upfront organization you are and could win some customers back straight away. We all make mistakes, but minimize the negative press by acknowledging them and crafting a plan for doing better. To emerge as a responsible business, let your audience know you intend to review your practices, retrain staff, or find a new supplier.
This article does not necessarily reflect the opinions of the editors or management of EconoTimes