Until rather recently, reputation management wasn't even on the radar of most brands. Sure, brands have always cared about their reputation, but there's a big difference between a brand wanting to maintain their good name and having a sophisticated strategy for doing so. But in today's digital landscape where connected consumers hold the power to essentially try and "cancel" brands in the court of public opinion, reputation management is critical for every brand.
Let me put this in perspective: According to a Harvard Business School Working Paper, an additional one-star increase in Yelp ratings increases a brand's revenue by as much as nine percent. And negative reviews stop a staggering 40 percent of consumers from doing business with a brand.
So what can companies do to ensure they not only stay in good standing but also actively elevate their brand in the eyes of connected consumers? Here is what three very different brands can teach us about reputation management.
Berkshire Hathaway: Understand that a Trusted reputation is Your Brand's Most Valuable Currency
In a 2014 biennial memo, the iconic CEO of Berkshire Hathaway, Warren Buffett, emphasized to his senior managers that the top priority on the list is to "zealously guard Berkshire's reputation." Beyond that, he advised his staff members to gauge what's right and what's wrong not just by business or legal standards, but by moral character. A snippet of Buffett's letter is below, and I highly suggest reading the full letter as published by The Wall Street Journal.
"As I've said in these memos for more than 25 years: 'We can afford to lose money--even a lot of money. But we can't afford to lose reputation--even a shred of reputation.' We must continue to measure every act against not only what is legal but also what we would be happy to have written about on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter."
This lesson about the value of safeguarding our reputation is one that every brand needs to take to heart.
Google: Be Transparent About Your Mistakes
In early 2019, Google was fined $57 million for breaching European Union online privacy rules when it was discovered that the company "lacked transparency and clarity in the way it informs users about its handling of personal data and failed to obtain their consent for personalized ads properly."
Google dealt with this matter openly by releasing a statement about how it would be examining next steps for meeting consent requirements of the Global Data Protection Regulation.
In the research my team and I at Zen Media conducted on connected consumers, we found that while they hold brands to high ethical standards, they don't expect them to be saints. Responsiveness to consumer concerns, along with authentic accountability, can go a long way toward restoring brand trust. On the other hand, if brands fail to acknowledge a public issue, try to bury it, or wait for it to just "blow over," connected consumers tend to walk, taking their wallets with them.
Dippin' Dots: Make the Most of Unexpected Attention
Dippin' Dots found itself facing a frosty PR crisis when it was unexpectedly thrown into the spotlight when a series of negative Tweets surfaced about the brand. These Tweets weren't from just anyone. They were from then-White House Press Secretary Sean Spicer who appeared to be holding a seven-year-long grudge against the beaded ice cream company.
To deal with this situation, Dippin' Dots turned to my agency, Zen Media. The winning strategy wasn't to "fight back" but simply to playfully highlight the humor of the situation to showcase the brand. To do this, we co-crafted the now nationally famous Open Letter to Sean Spicer, extending an olive branch and offering to treat the White House and press corps to an ice cream social. Then, we shared that letter across social media.
Over 10 million views
A potential combined total reach of 1.4 billion
More than a dozen tier 1 media articles and a flurry of coverage in smaller publications
31.3k tweets featuring "dippin dots" or "@dippindots"
A growth in mentions of more than 8,000% on Twitter
Trending on Twitter...for weeks
When it comes to reputation management, the greatest risk lies not in making a mistake, but in failing to use opportunities that showcase what your brand is all about. And for brands that understand how to leverage the digital realm and social media ecosystem to that end, the payoff can be huge.
With brands ever more vulnerable to being tried in the public court of the connected consumer, it's imperative to master reputation management. The best strategy, of course, is to always act with integrity. When mistakes are made, brands that assume authentic accountability are those that will not only succeed in restoring their reputation but also in elevating it, inspiring higher trust, and earning deeper loyalty.