Managing your brand and reputation risks

Managing your brand and reputation risks

The media loves a brand disaster story. From politics to sport, banking to automotive engineering, journalists are regularly inundated with stories of once respected brands that have been exposed for malpractice.

More often than not, brands recklessly ignore the potential threats to their reputation until they have already happened. Then the focus of their attention becomes one of crisis management and not risk management.

The benefits and value of a healthy brand reputation are clear. A strong brand reputation will help you to engage better staff, win valuable contracts, attract quality suppliers and earn customer loyalty. A good reputation will increase brand value through its intellectual property (trademarks, copyrights, patents and design rights) and intangible assets including brand equity (loyalty, familiarity and goodwill).  The expectation surrounding a brand with a strong reputation promises better value for money and increased investment potential through long-term growth and future profit.

What indicators reveal how vulnerable a brand’s reputation is?

  • Is the brand’s reputation greater than its reality?
    If the brand has an inflated reputation, above and beyond its reality, it will be vulnerable to exposure. It’s imperative that the brand’s standards are raised to match customer expectation or moderate their hopes in line with reality.
  • Are the brand’s cultural practices in keeping with the outside world?
    As organisations mature and brands grow older, the ethics and moral code of the institution may become out-of-date and aligned with wider cultural expectations. It is important to evaluate the brand’s values system and associated behaviors in relation to the outside world.
  • Does everyone in the organisation share the same idea of the brand?
    As organisations expand and brands extend their reach, the challenge of maintaining an engaged workforce increases. Clear internal communications and a shared understanding of the brand idea are imperative.

What measures can a brand take to minimise risk to reputation?

Reducing the risks to a brand’s reputation is about managing the brand experience holistically across every touchpoint, so that the promise is consistently delivered. A touchpoint is any interaction between the brand and it’s stakeholders. This includes customers, suppliers, employees and shareholders. Touchpoints cover every brand experience, including the brand’s ethical code, culture, staff, products and service performance. The invisible touchpoints of ambience, atmosphere and attitude are equally important in defining the brand experience.

Each member of staff shares a responsibility to deliver the brand strategy, from the credit controller to the delivery driver. Their behavior can influence the perception of the brand, and their actions create touchpoints that affect customers – for example, an incorrect invoice or a badly driven vehicle will reflect poorly on the brand and affect its reputation. It’s essential that each individual member of staff understands the brand and is able to interpret it in relation to their role.

Touchpoints are the details that bring the brand to life, and some of these details will be more significant than others. In order to evaluate which touchpoints are the most important, it will be necessary to observe and record all the typical interactions with the brand’s audience. This will involve an understanding of their expectations and perspectives.

Conduct an audit of your reputation factors: 

  • How good is your brand?
    Does the experience match the expectation? Be careful not to place all your eggs in one basket.
  • How good are your people?
    Brands are only as good as their people. If your brand depends on the CEO’s personality or on the goodwill associated with a brand ambassador, they may let you down and all could be jeopardised.
  • How healthy are the brand’s financial concerns?
    Do you pay your suppliers on time and pay your employees fairly?
  • How do you compare with competitors?
    How is your brand positioned relative to its competitors?
Measuring external perception

The media is powerful, and can inform and shape the wider opinion of your brand through positive and negative stories concerning your behavior. It is important to monitor the media for stories about your brand, its competitors and your industry in general.

You may consider surveying your customers to gain insights. As a general rule, a satisfied customer will share their view of you with four to six people, but an angry customer will inform nine to 15 potential customers. This multiplies infinitely online where social media is a natural outlet for advocacy and dissent about brands. Be sure to monitor the ebbs and flows of expression concerning your organisation, and be careful to gauge current opinion and mood about your brand.  You may choose one of the many social media monitoring tools available and start measuring brand advocacy. Be careful not to get caught in an online dispute, and always be respectful to deal with issues by direct message or in person – allowing you to address individual needs.

It’s important to remain in the consciousness of your various stakeholders and position the brand in a positive way. It is advisable to pursue a healthy awareness of the brand so that if anything were to go wrong you have a positive level of goodwill to defend yourself from.

What can a brand do when something goes wrong?

If you are in the unenviable situation where something has gone wrong with your brand, it’s essential that you provide a solid response that is both positive and swift. You must remain on top of the issue and strive to own the situation. In the aftermath, it will be necessary to prove the situation has been successfully resolved and that you have done the right thing for all concerned parties.

A significant visible change is needed to signal to all interested parties that lessons have been learned, and that the brand is genuine in its desire to rebuild faith and trust. Depending on the severity of the crisis, a fresh start of some shape or form is advised.

This may take the form of a change in leadership, people, product or service. When the damage to the brand is so severe that the calculated time to rebuild trust is not commercially feasible, it may be necessary to consider a change of identity. A new name and identity can take time to build awareness and equity around, but it may be the final option for a severely damaged and tarnished reputation.

Prevention is the best cure

So how can we guard against these risks to a brand’s integrity and avoid having to fight the fires of a crisis? Identify who is responsible for brand reputation risk management in your organisation. It ultimately starts and ends with the CEO, but do you have a brand reputation manager? Crisis management is very different to risk management. Brand management has more to do with leading a healthy life than applying emergency first aid. 

These measures will not happen overnight, but giving someone the jurisdiction to manage the brands health will require authority and dedication. It may automatically fall under the marketing department or internal communications. This person should report directly to senior management and alert the CEO to possible dangers so that actions can be taken in good time.

Interbrand, Brand Finance and Brand Z publish rankings of brand value each year. The huge valuations of top rated brands like Apple, Google, Coca-Cola and Microsoft indicate how much is at stake. It’s imperative that brands take good care of their reputation.

Paul Hitchens Course Director CIM
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