Reputation management, with the key focus going out to securing and maintaining the trust of the stakeholders, is a strategic business process. But what exactly does ‘reputation’ mean?
The company’s reputation is built on reactions provided by the stakeholders: if they believe that the company is acting and communicating in compliance with their needs, interests and values better than the competition, they will behave toward this company in desirable ways, put out positive messages and recommendations. Moreover, the better the company meets their expectations over the long term, the more this reputation will establish itself firmly in the minds of the various stakeholders, thereby creating a safety net that will enable the business to better stand up to crisis situations.
In this respect, reputation also constitutes an intangible asset which represents the past actions undertaken by the company and describes its ability to deliver value outcomes to the various stakeholders, whilst standing out from the crowd and prevailing over the competition.
It is also worth adding that, in a context where businesses owe it to themselves to satisfy their shareholders for whom ROI is at the heart of their concerns, reputation also plays a crucial role by dint of its proven financial impact. Even if it constitutes an intangible asset that is not recognised in the balance sheet as such, having a solid reputation also allows businesses to drive up sales, the prices adopted, and in doing so is seen to contribute to the company’s earnings. Not to mention the fact that reputation also impacts on the price of the company’s shares, the credit rates awarded, the conclusion of partnerships, mergers and acquisitions.