Money can buy a lot of things and bolster your business in many ways.
However, cash can’t purchase a genuine shift in how you’re perceived—nor how much you’re believed.
As you craft a business strategy and forge a corporate identity, consider these insights, takeaways and crucial distinctions between “brand” and reputation:
- You can spend your way to having a great brand, but no amount of money can buy a good reputation.
- Most businesses eagerly and routinely measure brand marketing spending and efficacy—but how much is spent on gauging its reputation with employees, customers or investors?
- Typically, the budget assigned to building an average company’s brand is vastly larger than the budget assigned to protecting its reputation. The larger the marketing-to-reputation budget ratio, the worse a company tends to fare in a crisis.
- In a crisis, a company’s “brand” matters very little—but its reputation is everything. Like a bank account, a company can draw down on its reputation capital in a crisis with a line of defense that can sincerely, believably, incorporate this sentiment: “We are generally a good corporate citizen, and this is an anomaly.”
- Brands are extremely important to young companies looking to acquire customers. However, most leadership teams underestimate how quickly reputation starts to factor in to retaining those same customers, and they under-invest as a result.
- Branding can make you relevant—and possibly popular on social media—but it’s reputation that will bring respect and credibility to your company.
- A recent study found that consumers are more likely to do business with a company that has a positive reputation over a negative one. More than 42% of customers surveyed also said it would take three or more years to gain back their trust after an organization has lost it in a reputation-damaging event.
Building a reputation, or rebuilding it, doesn’t happen overnight. Businesses must earn credibility by consistently providing top-notch products and services, treating its employees and customers well and through genuine commitments to corporate social responsibility.
Companies must also consistently tell compelling stories to reinforce trust and to dispel doubts or concerns. A solid reputation, built and nurtured over years, will go a long way toward ensuring customer loyalty—even when a crisis strikes.