Why does company reputation management matter?

Published: Feb 02nd, 2022

Updated: Mar 30th, 2022

Businesses have never faced more scrutiny from their stakeholders, therefore excellent reputation management is the key to controlling your image.

As society becomes increasingly socially conscious and digitised, businesses and high-profile individuals have never faced more scrutiny from their stakeholders. With this in mind, a company’s reputation has never been of greater importance and it is no longer sufficient to just address any criticism, companies must also actively convey the virtuosity of what is they are doing. Excellent reputation management is the key to a company controlling its image.

The importance of reputation

The importance of a company’s reputation has become increasingly clear as a result of the direct correlation between reputation and corporate success. For example, according to the World Economic Forum, a quarter of a company’s market value can be directly related to its reputation and 87% of executives think that reputational challenges are more important than other strategic risks.

This correlation between success and reputation has been highlighted in various incidents where a company has failed to understand the significance of reputation. For example, when United Airlines responded poorly to the recording of a passenger being forcibly removed from their flight, shares in its parent company, United Continental Holdings, dropped by $1 billion. With almost 4.55 billion people now on social media channels, news spreads like wildfire and responding to any crisis swiftly and correctly is vital to a company’s success.

However, company reputation also has further importance beyond crisis communications. With COP26 still at the forefront of investors’ minds, voicing a company’s ESG policy has never been of greater importance. In fact, a recent survey suggests that millennials are twice as likely to invest in a fund or stock if social responsibility is a component of the value creation narrative. Securing positive profile coverage in influential media can ensure a company continues to demonstrate its purpose. This will enable a company to continue to appeal to its key stakeholders even as their demands evolve. A company seeking to engage with its stakeholders must demonstrate its positive reputation in order to achieve success.

The right strategy

So, what are the fundamentals of a good reputation management strategy? Strategic SEO PR to ensure a brand’s visibility and swift responses to specific issues through Digital PR are essential to optimising a company’s reputation. Considering that global executives attribute nearly half their company’s reputation to the reputation of a CEO, media training and media consul can ensure the most visible individuals in a company are fully supported. Further to supporting a company to navigate any criticism, a good reputation management strategy also prioritises securing positive thought leadership to demonstrate the value a company is providing.

With news travelling faster than ever and reputation mattering more and more, companies looking to take control of their image must utilise a reputation management PR plan. Clear and timely responses to issues of reputation as well as developing the right stories for key stakeholders is crucial. At Sapience we have a wealth of experience in helping businesses across a variety of sectors navigate the intricacies of reputational management.

Find out more about our reputational management services or contact us.

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