The reputation of a business is critical to its survival. The trust and support of your customers can have a direct and significant effect on your business’ bottom line. In recent years, the importance of online reputation has become increasingly apparent. In the past, businesses relied on word-of-mouth publicity in order to establish and maintain their online reputation. However, in this age of instant communication, businesses must be careful of their reputation and be responsive to any situation that may impact their reputation.
If a business has a solid reputation in the marketplace, customers will have a preference for that brand even if other businesses are offering the same products or services for lower prices. The reputation of a business can help it differentiate its product in a highly competitive market, have premium pricing and become a major factor in helping a customer choose one business over another.
It is estimated that businesses in the U.S. lose nearly $537 billion in revenue each year due to dissatisfied customers. Nearly 80 percent of customers will not even consider buying from a business that has negative online reviews. If you are still not sure of how valuable your reputation is, consider these statistics that indicate how much it costs to have a bad reputation:
- Loyal customers are likely to spend more and may contribute 2.6 times more revenue than customers who are somewhat satisfied.
- According to Google, businesses with a three-star rating or higher receive 87 percent of the traffic.
- For every one-star increase on third-party review sites, businesses see a five to nine percent increase in revenue.
- Almost 80 percent of customers will change their mind about a purchase after reading the negative reviews about a business online.
However, even after looking at these numbers, you may still find it tough to quantify how much your reputation is worth. It may be possible for you to calculate how much money you have spent on advertising, or the hours spent promoting your brand on social media platforms, but you may not be able to calculate the number of customers or business opportunities that walked away quietly due to your bad reputation, possibly never to return.
It is no coincidence that some of the most successful global brands, such as Amazon, Apple or Walt Disney, have the highest reputation ratings. These companies are able to maintain stellar online reputations and brand images, reaping the rewards in the form of increased revenue.
The value of a healthy online reputation is enormous. Even for a small company, a good reputation is worth well into the six figures. For larger businesses, it can reach into the millions and billions of dollars. Improving your online reputation can have a number of benefits, ranging from increasing online visibility to improving customer relationships and achieving a healthier bottom line. However, online reputation management is usually not a consideration until it there a crisis, such as dealing with a bad review. However, you must remember that you can lose a lot if you do not invest consistently in building a stellar online reputation. Businesses should keep an eye on the Internet and monitor search engine results pages to see how and when they are mentioned in online forums.
There is a lot at stake in online reputation. If you are troubled by a bad reputation, you may be feeling the consequences of it. When faced with such situation, you can either decide to throw your hands up and walk away, or you can dig in your heels and fight.
It is important to understand that negative online information about your business and products will not go away on its own, and it is tough to beat. However, if you work on improving your online reputation, you have a fighting chance of succeeding in building a more positive reputation.
With effective online reputation management, you can benefit from a multi-pronged approach that protects your reputation now and into the future. The best reputation management plan will not only address existing issues but will also establish a positive reputation in the long term.