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Importance of Reputation Management

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  • Importance of Reputation Management

They say that once you put something online, it will start living a life of its own. Now, for someone scared about the micromanagement aspect of their business reputation, this may sound like a blessing. At the same time, it signifies a loss of control that others (digital marketing experts included) may, at times, find disheartening.

Fortunately, just because a lot of things are out of your control, this doesn’t mean that you cannot plot a course for your corporate reputation. In fact, this is what reputation management is all about.

Before we carry on with this topic, it’s important to set a couple of parameters straight. First of all, it’s worth stressing that online reputation happens mostly online. Second, it affects your sales, marketing, as well as customer retention in the long run. Since just 8% of your regular customers make up for about 40% of your entire profit, this is definitely something worth keeping in mind.

With all of this in mind and without further ado, here are a couple of things about the importance of reputation management that you definitely need to keep in mind.

How Important is Reputation Management?

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First of all, it’s important to try and give a reason why this topic matters so much. You see, reputation is important, and the presence of positive reviews may make 3 out of 4 people trust your company even without actually doing business with you or buying from your brand. At the same time, a negative review might make them think twice about your business.

In the world that we live in, the line between digital and analog is blurrier than ever before. As a result, it’s stated that about 85% of consumers trust online reviews as much as personal recommendations. In other words, reviews are the new WOM.

Still, how can this be? Is it really realistic to trust a stranger online as much as someone you actually know? Well, it’s really not as simple as that. You see, while review writers may lack a personal reputation with the reader, they make up for this through competence. A specialized review has more weight (from the standpoint of the reviewer’s authority) than a recommendation from a friend who might not be as familiar with the field in question.

Brand mentions are just as relevant of a topic, seeing as how the reviews aren’t the only thing that matters here. Reviews are the first stop for a lot of people, but those reading them are sometimes a bit wary of the intention behind them. They are aware of the fact that people writing reviews may have their own agendas or frustrations. After all, reviews are often there to persuade them. Social media comments (that are not on your page), posts on platforms like Reddit, or forum posts are often seen as less direct. This gives them an extra layer of credibility.

Enhancing Your Online Presence

When it comes to reputation management, a lot of people make a presumption that it’s a stand-alone investment, when, in reality, it all falls under your digital marketing. In fact, some would go as far as to say that it’s tightly intertwined with everything you do in the virtual environment. As such, it’s the responsibility of everyone even remotely related to these processes, ranging from social media managers, all the way to your virtual assistant.

Your reputation is a factor in every single interaction that your brand partakes in. Now, seeing as how the majority of communication takes place in the digital environment, it’s no place that present-day reputation management is a mostly digital manner, as well.

It’s also important that you understand the importance of a personal brand. Let’s say that you’re running a clinic and that there’s a doctor in your employ whose reputation is one of the major draws to your brand. Even their personal online footprint may have an impact on your online reputation. Sure, you can’t just mandate what your employees, partners, and associates do in their own free time and with their own accounts but keeping a close eye on this might help you with damage control. This is, of course, is a scenario where things go horribly wrong.

Your online reputation directly affects your sales and marketing. Therefore, a skilled digital marketing team might be able to measure the strength of this correlation. From all the above-mentioned, it becomes more than clear that your online reputation might be key to your company’s survival.

Customer Retention and Shopping Cart Abandonment

In the digital world, your company’s reputation is quite easy to check. Still, how important is this to the grand plan of the customer decision-making process? Well, it’s worth stating out that about 87% of all your customers might reverse a purchase decision after seeing a negative review of your business online.

Before we carry on, it’s important to mention one thing – there’s no method whatsoever that will ensure you don’t get a single negative review or brand mention. At the same time, not all negative reviews are bad. You see, a negative review or two can give your company a bit more credibility. Making sure that every review is positive will make the review section appear scam-like. After all, there’s not a single thing in the world that all people agree on.

The key thing is a positive-to-negative comment ratio. Now, according to some surveys, the best feedback ratio is 5:1. This is something that you should see as optimal when reviewing user comments, as well.

Now, some claim that negative feedback helps your brand grow and evolve in order to provide a superior customer experience. There are a couple of flaws in this theory:

  • Not all feedback is constructive
  • Not all negative feedback is valuable to a customer (there is such a thing as too much transparency)

Sure, censoring too much can hurt your brand but assuming a completely hands-off approach in a situation as crucial as this may give you an even worse outcome.

The Ethical Aspect of Reputation Management

Reputation is an asset and abusing your reputation management can be quite problematic. For instance, we’ve just talked about the positive-to-negative comment ratio. Still, what happens if the brand has complete control of the comment section. For instance, on their Facebook page (rather than on Google Reviews). What’s there to stop them from deleting the majority of negative comments in order to sway the public opinion their way.

Now, this is a bit of a tricky question and there’s always a blowback. Unethical use of any method always comes back to haunt you. The lack of transparency will inflate the expectations of potential customers. Upon your failure to live up to them, your customers will be disappointed and more likely to leave (unlike if they were aware of the risks ahead of time).

A lot of enterprises believe that tricking their customers into buying from them is a solid business model but the truth is that poor business practices are not something that you can hide. It will take them one instance of doing business with you in order to figure you out. After that, they’re unlikely to return. As we’ve mentioned in the introduction, return customers are detrimental to your survival as a business, and nothing that scares them away for good is ever a good idea.

Just bear in mind that reputation management has its dark side, as well and you need to be very careful with who you’re actually doing business with.

A Matter of Perception

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The simplest way to describe all your reputation management efforts would be to say that you have no control over what others think but you can control what they see. One of the key digital marketing aspects in this field is SEO. This is a collection of methods through which you affect the visibility of your brand as a whole.

Now, in order to make a selection of all the aspects of your enterprise that are deemed as the most presentable, you need someone knowledgeable about human psychology. Namely, everyone has their own cognitive biases – things that they dread or want to believe. This is why, although unethical, click-bait titles are so effective and draw so much attention. It’s like the car crash phenomenon – nobody wants to see it but nobody can look away.

Sometimes, even taking a controversial stance may be rewarding. Imagine a total audience of 100 people. Isn’t it better to be hated by 50 and loved by 50 potential buyers than to have all 100 of them feel indifferent towards a brand? This is the third time that we bring up this statistic but just 8 of them are enough to make 40% of your entire profit.

This is a useful tool when it comes to reputation management, seeing as how the channel of communication that you use to address your audience also affects who sees the message. Different demographics use different platforms. Not only that but they have different behavior patterns on these platforms, as well. In other words, even when and what you post may affect who sees it.

To make the long story short, when it comes to the topic of reputation management, you need someone who understands the human psyche as much as they understand digital marketing.

No Room for Average

It’s also important to mention the concept of the paradox of choice. According to it, the more options that they have, the less likely people are to actually make up their minds. The more they research, the more they will uncover. Unfortunately, in some scenarios, their standards go up to ridiculously unrealistic expectations. After all, with so many businesses/options out there, why would they settle for average?

Therefore, it’s important to mention the fact that almost 50% of all online consumers won’t do business with a rating lower than 4 stars (out of 5). On Yelp, for instance, one star can make a difference of up to 9% in the company’s revenue. Therefore, working on your online reputation has direct correlation with your total income.

This is once again reflected in the SEO, seeing as how the perceived reputation of the company often correlates with the SERP position of the page. You see, in the mind of an average online user, the first few positions are the most credible and the most reputable ones. The fact that 90% of internet users don’t go past the first page of Google results isn’t just a product of laziness. It’s also a (somewhat flawed) conviction that any result on subsequent pages is simply “not good enough” or “not trustworthy enough”.

The same thing applies to all the search engines and social media platforms including YouTube (which can be categorized to belong to both of these categories).

Beyond the Sales

One more thing worth taking into consideration is the importance of reputation management for other aspects of your enterprise. This falls under the category of PR. For instance, your reputation will definitely affect your ability to attract talent. As such, it will drastically impact your hiring processes.

Placing yourself on the right side of the spectrum regarding some societal and global issues may also be a way to relate strongly to your target audience. Still, not everything can be observed through profit and this might be a way for you to make a change. You can, perhaps, leverage your corporate reputation in order to become the change that you want to see in the world.

Of course, having a great reputation may have some negative aspects, as well. First of all, you’ll constantly be under a spyglass and there are those who will vehemently search for anything that may ruin your reputation. Also, you’ll become a lot bigger target for hackers, scammers, and all sorts of malicious third parties. These are just some of the things you need to look out for.

In Conclusion

At the end of the day, reputation management helps you take control over the most important non-material asset that your brand has. It allows you to (somewhat) control the narrative surrounding your enterprise and plot the course for the future development of your brand name. Reputation management gives your company more resilience and ensures that you have growing brand value in continuity. Overall, it’s both a foundation and a safety net of an effective online presence.

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