What does bad reputation do? In our guide below, learn how a bad reputation can stand in the way of achieving your goals.
It takes a certain type of individual to own and operate their own business. The amount of hard work and dedication to keep a business running and profitable takes real determination.
There are also many factors involved, including hiring the right people, purchasing the right products to sell or lease, maintaining inventory, maintenance and upkeep, and many other essential things that are required.
Also in the mix of running a successful business is how well leadership handles its reputation management.
While individual reputation is important to anyone who wants to be seen as a good person; trustworthy, dependable, and similar good traits, a business reputation is a very important aspect of how a business is perceived and can greatly impact the success or failure of retail outlets, suppliers, wholesalers, professionals, and the like.
A good reputation draws new customers, can help expand its geographic footprint, and elevate the standings of a company locally, nationally, and even globally; a bad reputation will have the opposite impact. A bad reputation can not only cause damage to your operations, but it can actually drive a company, especially a smaller one, out of business — if the damage caused is severe enough.
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What Are Some Issues that Help to Create Negative Public Relations?
Public perception of a business can improve the growth of a company when the reviews and word-of-mouth are positive, just as bad reviews or poor employee morale can have a negative impact. The loss of potential customers can often be traced to online reviews containing defamatory statements by customers.
In addition, disgruntled employees and competitors engaged in writing false or defamatory reviews. Even former employees with an axe to grind use online posts as a sort of last resort to write negative comments about the business or its owner, which can impact public perception and ruin a company’s good reputation. These can all prove to be difficult obstacles to overcome, causing reputational risk.
Complaints can be anything from problems with products and services, defects, poor customer service, or having an unfriendly work environment. Employees might contend that they were victims of sexual harassment or sexual misconduct or were subjected to racist comments. They may voice complaints about wages or working conditions, including long hours, double shifts, a lack of proper breaks as prescribed by law, or any number of other issues.
The Bottom line: If your employees aren’t happy, they may take their complaints online, which is bad news because bad reputations have a way of gaining traction and can ultimately have an effect on market value, along with the company’s reputation, particularly for public companies or larger private firms.
Your Online Reputation is Critical
Once someone takes their grievances to a social media platform, prospective customers could be dissuaded from bringing you business due to what is perceived as a bad business reputation. Social media platforms have become a source for people to air their grievances, trash a company, write negative online reviews, and ultimately damage a brand’s reputation. Just take a look at the comments on Twitter and how an avalanche of negative reviews and comments can ruin your company reputation.
What’s required to quell potential reputation risk is concerted online reputation management with strategies and tactics in place so that any negative feedback is addressed immediately. This not only stems the tide of negative reviews but also serves to strengthen brand equity, investor relations, and future growth.
A Company’s Reputation Starts with Employees and Management
Running a business requires hiring the best and most competent talent, people who are invested in the success of the company. Things go a lot smoother when people are incentivized to go above and beyond. Knowing that their contributions are appreciated and, when possible, rewarded, makes for a strong and positive work environment.
It also requires a hands-on approach, a sort of “lead by example” situation that will often inspire others to “go the extra mile.” Companies, in an effort to obtain and hold onto the best candidates, create a work atmosphere that makes people happy, comfortable, and productive. When employees are happy, they work harder to achieve the company’s goals, and will often work longer hours to keep the organization on track.
When the culture does not foster positivity, the risk of a bad business reputation increases. Not only do you have good people leaving, but you also have underachievers staying on.
It’s important that leadership and Human Resources deal with bad employees and consider the potential risks involved in keeping them on the payroll. If a worker, for whatever reason, isn’t happy, dependable, or truly invested in the company’s success, following legal employment practices should be put on probation and eventually terminated if things don’t turn around. Disgruntled employees can be detrimental to your operation. It’s an unfortunate situation, but your success rides on making the right decisions, especially the hard ones.
Good Management Creates A Good Work Environment
The people placed in management positions should understand that a culture of mutual respect is preferred. People who understand that a workplace in sync with the needs of the individuals working together maintains harmony. In addressing any discord that arises, you will also have an easier time keeping the troops working as a unit towards the same goal.
Having one bad person in a management position can create an undesirable work environment, just as having a bad employee can have a ripple effect, which could spread to others. Both scenarios are potential threats to how well your company might perform. Customers may pick up on the fact that there are problems brewing by the demeanor of the people providing customer service, especially if they exhibit a moody or brooding attitude while at work.
Good Employees Equals Happy Customers
Great employees will lead to happy customers. You may be catering to thousands of customers a year, and any one of them having a bad experience can be a catalyst to causing most companies to experience negative online reviews, a poor reputation, and diminishing returns and market values.
The stores and businesses that perform poorly have more likely fallen victim to poor reputations and the lowest customer satisfaction scores. They experience a high volume of online complaints or other factors related to reputational risk.
To avoid this fate, you must recognize existing and potential threats, garner more positive reviews based on performance, and always stand behind your products and services. This will help to add more value to your brand, including your personal brand, as you will be viewed as a hands-on owner running a successful business model, which can help to garner new customers.
Making Your Company’s Reputation a Priority
Maintaining a positive reputation requires good communication among owners, management, and employees. As an owner, you will often be judged by your ability to please customers and workers alike. Takes steps to avoid company scandal at all costs. When you become the subject of local media regarding internal issues that wind up on display on networks, such as the Fox News Channel, this type of media coverage can cause damage to your company reputation and further bolster a negative reputation.
As an example, most banks have a decent-to-good reputation, thanks in part to their focus on customer service provided by bank employees, which is a foundation of their building a strong reputation. Bank employees created millions in revenue by being trusted to handle the financial holdings and earnings of the bank’s customer base. They have used their positive reputation to illustrate their professionalism and dedication to their jobs.
But if you have one rogue employee or many in the case of the Wells Fargo Bank fraud scandal several years back, the fallout of a firm’s negative reputation and credibility can be devastating. Wells Fargo ended up agreeing to pay $3 billion to settle its long-running civil and criminal probes into accusations of rampant fraudulent sales practices. This and other scandals has Wells Fargo ranking as the worst American bank, with a rating of 74 out of 100 on the American Customer Satisfaction Index.
Why Is a Company’s Reputation Important?
If your business is experiencing slow growth, isn’t showing sustained earnings, or, even worse, is plagued by multiple lawsuits brought on by former employees or customers, or clients, you have to take a look at what is at the core of these issues.
You can start by assessing existing potential risks and the possible effects this could have on your company’s market share. You have a corporate social responsibility to those invested in your company, including employees, your stakeholder group, and the public you serve.
You need to please customers so that they are more likely to post reviews with positive content about their experiences with shopping or engaging in business dealings with your company. Your reputation creates perceptions about how you conduct business, and your staff is a reflection of this as part of the brand reputation.
ORM Helps Build a Positive Reputation
If your brand does experience a bad reputation, you have some options to help improve any misconceptions or missteps you may have taken to get back on track. First, internally make sure you have a risk management plan in place to proactively deal with and manage any crisis. Stay vigilant on how you can deliver better service. Businesses in the U.S. can utilize an American Customer Satisfaction Index to measure and improve customer satisfaction.
Work with an Online Reputation Management (ORM) firm to repair a tarnished reputation and help you with ongoing reputation management. ORMs have the tools and the staff available to audit your online reputation and put a content management plan together to create and post positive content. From optimized blogs to articles to press releases with positive news and other tactics, an ORM will help mitigate reputational risk and boost your company reputation.
Interested in learning more about building and protecting your online reputation? Read more on our blog!