Proactive Reputation Management

Bridging the gulf of trust between organisations and their consumers or users through concrete actions is of paramount importance in a post-truth society.


“One of the artifices of Satan is, to induce men to believe that he does not exist.”

John Wilkinson, Quakerism Examined, 1834

If there ever were to be a compendium of success stories of reputation management, the one the Quakers tell of the Devil would have to make the cut as the greatest of all times. 

With this provocation we are not trying to create an analogy between the Devil and brands, nor are we endorsing malfeasance in any way, shape, or form; on the contrary, we are attempting to affirm from the get-go, as many other well-informed writers before us have, the importance of managing the perceptions that the world holds of us in order to achieve our goals. 

Those goals sometimes concern the social acceptance of a new, potentially disruptive technology. With that, we don’t mean the forced acceptance on the part of the general public through engineered methods of an innovation perceived as useless, invasive, or both. What we intend is that, in today’s world, there is a strong need for immediate solutions to people’s hopes and concerns to be solved thanks to innovative technologies, which should therefore be designed to be acceptable socially.

Our Close-The-Loop model lists six dimensions that define social acceptability. The first of these dimensions is perception. Traditionally, marketing has been the discipline through which organisations have assessed the perception of their products or services prior to introducing them to the general public. In the marketing literature, there is widespread agreement that the fundamental concepts of organisational identity[1] and reputation[2] are interrelated. But, as Stephen A. Greyser and Mats Urde have noted on the Harvard Business Review, too often brand management is prioritized at the expense of reputation management and, although managers are aware of the importance of the latter, they often lack the tools and framework to cogently manage it. Reputation management appears to be today of even greater importance than in the past: the economic crisis has and will continue to dampen spending power. Pinched, people will have to make tougher choices, thus becoming more sensitive not only to price, but also to their trust in a brand’s mission as affirmed through that brand’s actions. The 2020 special edition of the Edelman Trust Barometer seems to highlight this fact. 80% of respondents want brands to “solve society’s problems,” while 53% identify trust as the next most important factor after price when purchasing a new brand’s products.

The end goal for an organization in developing a solid image and reputation is for consumers and users to trust it and, therefore, to remain loyal to it in a mutually rewarding relationship.

Trust, simply put, is the belief that someone or something is honest, reliable, and not harmful. But the most important aspect of trust is not its legal or moral value, but the social ties it fosters. More academically, trust is a complex, multidimensional concept formed over time in relationships through the interaction between emotional and rational factors. The end goal for an organization in developing a solid image and reputation is for consumers and users to trust it and, therefore, to remain loyal to it in a mutually rewarding relationship.

Trust may never be gained. Once it is, there are many ways in which it can be lost. Scarce quality management of  a product can damage a firm’s customer relationships or financial viability (the case of Samsung’s Galaxy Note 7’s related battery issues) or its ability to retain talent (Volkswagen in the immediate aftermath of Dieselgate); murky governance can provoke negative media coverage (Facebook & Cambridge Analytica), increased risk of takeover (Sanofi’s bid for Genzyme), or increased governmental scrutiny (the EU’s increasing pressure on US tech giants).

It is therefore clear that, whether a product or service is on the market or not, defining organisational and brand reputation management practices is just as strategic as defining those related to organisational and brand identity. 

Inspired by the CBIRM (Corporate Brand Image and Reputation Matrix) developed by Greyser and Urde (2016), we have begun putting together a framework (illustrated in the following figure) for the assessment of how two macro-components determine an organisation’s perceived reputation and potential to generate trust. 

In the vast and ever-changing technology industries, products or services in the still-experimental phase aspire to obtain a share of their markets, which they enter often following a push strategy. A key role in this process is played, in fact, by the social acceptance of those technologies. Restricting our analysis to rational, usage-oriented choice factors, firms can push their offering highlighting one feature or another of their product / service. However, only by finding “the right mix,” by aligning the perceptions of internal and external stakeholders (following leading questions such as the listed ones according to the direction of the arrows), can firms operate in a favourable light, thus managing reputation while meeting objectives and achieving their purpose.

In a post-truth society, proof of action is important.

Perhaps the most well-known example is Patagonia, the outdoor apparel company. Ever since 1986, its founder has pledged 10% of profits or 1% of sales, whichever ends up being larger, to initiatives that help preserve the environment. In 2011, in an effort to raise awareness about the environmental effects of their purchases, the company ran an ad that read: “Don’t buy this jacket.” Today, over two thirds of Patagonia’s items are made of recycled materials, and by 2025 the company aims to be able to say the same of everything it produces. The company’s activist reputation has not hurt revenues or profits; in fact, these have quadrupled over the past decade. Patagonia exemplifies the bonfire of vanities that a company that claims to be innovative for the sake of the planet must be willing to undergo. In a post-truth society, proof of action is important. 

Across all sectors, if consumers and users are to build bonds of trust with brands, products, and services, organisational strategists must strive to make coherent their stated priorities and actual initiatives. In the ICT sector, consumers and users need to know they can trust the brands that develop new products or services that connect them to others. Product / service developers, on their part, can consult stakeholders – from users to employees – to better understand what in their eyes constitutes ethical behaviour; even before launching onto the market, they can plan actions that prove their commitment to ethics, thus avoiding potential threats further down the line. In practical terms, ICT organisations– in plain language and through appropriate visual tools – can answer questions such as: “Who accesses consumers and users’ data? For what purposes? Where in the world do those processes occur?” Being proactive and forthcoming with information rather than manipulating perception through affective tools after legal or security incidents is one way for ICT organisations to establish bonds of long-term trust with those that utilise their inventions. In general, managing “immaterial” elements such as data through “material” actions is and will continue to be a valid tactic for reaching the same objective. 

Based on numerous factors, diverse categories of stakeholders perceive an organisation or a brand as having a certain reputation. That organisation or brand’s managers must understand that, for however apparently irrational, the perception of those stakeholders is reality. And that reality, especially in today’s incredibly interconnected world, can and will affect the brand’s competitive strength. Understanding how to translate the vision of an organisation or brand into its value proposition has never been more important than today for developing ongoing relationships with consumers and users. And that translation is the essence of reputation. 


[1] The Cambridge Dictionary defines corporate identity as: “The qualities of a company that make it different from other companies, and the images, words, etc. that it uses to make itself familiar to its customers, for example in its advertisements, on its letters, etc.”

[2] Credibility, performance, authenticity, relevance, governance, and citizenship are elements of organisational reputation. In defining reputation in general, once again, the Cambridge Dictionary is of great use: “The opinion that people in general have about someone or something, or how much respect or admiration someone or something receives, based on past behaviour or character.” 


REFERENCES

Cho, J., Chan, K., Adali, S., A Survey on Trust Modeling in ACM Computing Surveys, Vol. 48, 2015, New York City

Urde, M., Greyser, S. The Corporate Brand Identity and Reputation Matrix: the Nobel Prize Case in Journal of Brand Management, Vol. 23, 1, 89–117, Macmillan Publishers Ltd, 2016