A wise man once said, “It takes many good deeds to build a good reputation, and only one bad one to lose it.” That man was Benjamin Franklin, and he was right. While it may take years to build relationships with colleagues and a positive image for customers, it’s like the game Jenga. It only takes one wrong move to send it all tumbling down. This is why truly successful businesses never ignore or neglect reputation management.
Here at M&D Digital Advertising, we bring companies and their customers together by offering comprehensive digital marketing for small businesses. No matter what kind of goals your business has, we have years of experience crafting innovative business and reputation management strategies that will help grow your brand and keep your company thriving.
Top 7 Risks of Ignoring Your Reputation Management
1. Negative Reviews
With a new trend of “cancel culture” that’s recently become a frenzy, the risks of ignoring your reputation can be severe. In fact, according to a survey completed by BrightLocal, four out of five people won’t buy from a company that has negative reviews. While one or two aren’t that serious, a bunch of negative reviews on popular sites like Google, social media, or the BBB can be incredibly damaging.
The worst part is that all it takes is one disgruntled customer, who can then easily leave numerous fake reviews. Think about it: how are potential customers supposed to determine which reviews are legitimate and which are totally fabricated? By the time you spot these fake reviews and get them taken down, it’s usually too late—the damage has already been done.
2. Losing Trust and Credibility
Even longtime, brand-loyal customers can lose trust and credibility if they see or hear something negative about a company. Even if what they heard is proven inaccurate, consumers can still lose hard-earned trust. Most people also discuss business with friends and family, and word of mouth can be worth a lot of money in sales. Inversely, it can mean lost business if customers are bad-mouthing your company to those same friends and family.
It’s also extremely tough to rebound once that initial trust and credibility are lost. Warren Buffett once stated, “It takes twenty years to build a reputation and only five minutes to ruin it.” His words couldn’t be more accurate in this day and age. With almost the entire world on social media, just one negative news item or offensive tweet can spread like wildfire. Once the trust is gone, it’s gone. It takes hard work, time, and effort to gain it back.
3. Poor Financial Performance
One of the worst consequences of neglecting your company’s reputation management is poor financial performance. When your brand isn’t perceived in a positive light, potential customers are less likely to spend money or make a purchase. A perfect example of this is the energy company BP. After the Gulf oil spill, their business and profits quickly spiraled downward. This scenario could conceivably happen to anyone that ignores their company’s reputation.
However, that indifference can lead to worse consequences than just losing out on customer sales. Negative publicity can also affect how investors, lenders, shareholders, and stakeholders perceive your business, and without a positive perception of your company’s trust and credibility, they may decide not to invest.
4. More Negative Publicity
If you’re not spending time and effort managing your online reputation, be prepared to eventually deal with even more negative publicity. In fact, paying attention to your online presence and the reviews people leave is critically important. By being open to criticism and feedback, acknowledging it, and responding to it professionally, you can deal with any bad situation, turn it around, and spin it in your favor.
Failure to step up and to take control in this way can have some serious fallout. You should never just ignore bad reviews or publicity. To do so is to open your company up to even more negative news items and bad publicity. Being open and admitting mistakes can be risky, but the risk of ignoring these vital issues can have even worse repercussions. Step up and take responsibility when necessary.
5. Hate Sites
If you’ve never heard of a hate site, they’re precisely what they sound like. Essentially, it’s a website that contains negative information or actually bashes and insults either a person, product, or company/corporation. The information doesn’t even have to be factual or accurate because the point of these hate sites is simply to cause as much damage as possible to a business’s reputation.
Think about how SEO techniques help create positive lead generation for businesses. The same principles apply to hate sites. Though bad reviews can harm a company, they don’t feature as prominently on search engines the way a hate site does. When potential customers see something like “CompanyName is a SCAM! Stay Away!” most people will do exactly that—stay away. Many don’t take the time to verify if the information is legitimate, which spells bad news for your bottom line.
6. The Ripple Effect
Having a poor business reputation is not just damaging to your profit margins; it also creates a chain reaction of negative effects. It can even impact things like hiring costs or make it difficult to find new employees. This “ripple effect” has far-reaching consequences that can adversely affect your business, profits, and daily operation.
According to a survey by CareerBuilder, a whopping 71% of American workers won’t even bother applying to a company that’s had negative press, a scandal, or is perceived as being untrustworthy. This is where a poor reputation creates a Catch-22. If bad employees are the source of the negative publicity, and the bad press they’re causing prevents your business from hiring better employees, it turns into a never-ending cycle. See the problem?
Sky-High Employee Retention Costs
When a company’s bad reputation results from an unhappy employee or a scandal, unfortunately, other employees may start to jump ship. This typically means two things. One, you might end up losing some of the best talent you have on your payroll. Two, it’s going to cost more money to retain the employees that haven’t already left.
According to one survey, you could end up paying about 21% more to keep an employee because of a poor reputation. If you’re thinking you can save money by simply hiring new workers, that rarely happens. It can actually cost just as much, if not more, to replace mid-level employees who earn less than $50,000 each year, let alone those with a bigger salary. It’s easy to see how the costs of ignoring a reputation can add up very quickly.
7. Unintended Consequences
Managing a reputation is no simple task. However, ignoring it can have unintended consequences that last beyond the immediate crisis and response. While poor publicity creates an opportunity for a company to respond and bounce back into public favor, not taking your reputation seriously enough can have significant repercussions.
The internet is forever. Even when you think you’ve heard the last of something negative, it can still pop up years later and start trending all over again. Look at it like this: any negative reviews or information on the internet is essentially an indelible digital tattoo that brands your company in a bad light. That’s why it’s smarter to use strategies that help prevent those bad situations rather than reacting to them after they’ve already caused damage.
Ignoring your reputation is a dangerous game that can have significant consequences. Here at M&D Digital Advertising, we take care of all the work for you. Our proactive solutions are designed to combat negative reputations and help mitigate damage when those events occur. We developed our comprehensive reputation risk management strategies to help your company grow, thrive, and build trust with your customer base. Contact us today at M&D Digital Advertising to learn more about how we can grow your brand by taking control of your reputation.