It goes without saying. Or does it? A good reputation matters today, more than ever. Its certainly good for business: and doing good business helps to build it. A good reputation in the community can be a real asset in times of crisis.
Take yourself back to 1992, place yourself in the swarm of the South Central Los Angeles riots and think.. why are all 60 of those McDonalds outlets totally intact, undamaged, safe from vandalism? Could “the company’s efforts in developing community relations through its Ronald McDonald’s Houses and it’s involvement in developing employee opportunities” have enveloped the company in a magic shield?
Research abounds, and study after study makes two points emphatically clear:
- Reputation leaders substantially outperform their competitors.
- A good reputation is crucial to attracting and retaining employees and customers, the ambassadors and advocates for your business and brand.
Your reputation may well be what you live or die by. It’s an invaluable and intangible business asset and it acts as a form of ‘soft power’ influencing levels of trust, affinity and loyalty.
A good reputation can take a years to build up, yet it can be diminished and forever devastated in days or even minutes. The explosion of social media has enabled citizens around the world to uncover and share information without constraint. The risk or reward for having a good or bad reputation is massive.
Fortune Magazine’s annual list of “World’s Most Admired Companies” lists social responsibility as one of the 8 attributes that analysts and executives use to to rate companies. Creating social value by having a positive effect on society while working to minimise our impact on the environment is a surefire way to build your reputation as a good corporate citizen. But how does that value come to life?
Often described as invaluable, a good reputation is incredibly hard to value. The findings of a 12 year study carried out in Quebec over 12 years with 80 major companies included:
- Reputation is the single most important driver in value creation or value destruction.
- Reputation provides a unique competitive advantage which enables a company to outperform the market by up to 100 percent.
- Two thirds of Canadian consumers consider the reputation of a company as their most significant buying criteria
Research aside, as customers, consumers and citizens we know it when we see it. Our sense of integrity and respect for transparency leads us to adopt and take ownership of the brands, organisations and even individuals that nurture this soft power. In the process levels of trust, affinity and loyalty and positively influenced.
A good reputation can be actively nurtured and helped to blossom through stories that engage us while reinforcing the actions taken and behaviours displayed. These stories create emotional connections that help bring this intangible asset to life.
Suddenly, through the connections made, it feels real. Suddenly we’ve created something that manages to influence the public’s perception and actively shape their expectations.