A company’s reputation is one of its most precious assets. Companies with a good reputation perform better, attract more qualified people, and do better overall. In the digital age, mistakes, inappropriate communication, or targeted attacks can easily undermine a company’s reputation.
These threats can be avoided, and the harm to a company’s reputation can be minimized by controlling reputational risk. This blog explains what reputation risk is and how you can manage it.
What is the reputational risk?
Reputational risk is anything that has the potential to harm your organization’s image in the general public’s eyes.
It can happen for several reasons, such as negative publicity, acting unethically, or not keeping promises. This risk of reputation can be very bad for a business because a bad reputation can cause losing customers, investors, business partners, and money.
It is critical for businesses and organizations to consider the potential reputational risk of their actions carefully and to have strategies in place to manage and mitigate these risks.
Types of reputational risk
There are three types of reputational risk for any company. Here, we will learn about these types of risks and how each of them is potentially bad for your business’s reputation.
- Reputational risk by company actions
These reputational risk situations are directly caused by your company’s actions and ways of doing business. Some possible example scenarios include:
- Low-quality products and services
- Layoffs and scandals that get out to the public
- Not following rules, such as federal or local laws or rules for the industry
This type of risk can affect the public perception of your company, whether intentional or not.
- Reputational risk by partners’ actions
Partner and supplier behavior can damage your brand reputation, especially if you have an established relationship. Examples:
- Partners or suppliers commit misconduct that becomes public knowledge.
- Negative comments from partners or suppliers about your company
- Actions of partners’ representatives
Most of the time, these risks happen because someone with a direct connection to your business does something bad or unethical. Here are some scenarios:
- Employees who represent your brand badly to others
- Misconduct by an individual employee toward customers
The public may not agree that company officials’ and employees’ acts are not the company’s. Representatives act as companies’ faces and personalities. It makes any organization open to a lot of liability and reputational risks.
- Reputational risk by outside events
This type of reputational risk can greatly impact your company’s reputation, especially when your customers and former workers have a negative experience. Here are a few examples:
- Customers’ negative reviews on public review sites
- Negative social media posts from customers about their experiences with your company
- Data leaks or attacks on computer systems
The media and potential customers take this type of risk highly since it helps them build an impression about how people are treated after receiving goods, services, or employment from your company.
You may also check out this guide to learn how to build your own Customer Journey Map.
Tips for managing reputational risk
- Identify and assess the risks
Identifying risks is the first step in managing reputational risk. In your reputation risk assessment, you should ask yourself how likely these risks are to happen and how bad the effects could be. You will need to figure out what could hurt your company’s reputation.
- Get to know your stakeholders
Your process for managing reputational risk should include figuring out what your stakeholders want from you. Make sure to think about all types of internal and external stakeholders because they may have different expectations of you.
You can find this out with the help of surveys, polls, and interviews. Use different sources that are not biased to get a clear picture.
You can conduct surveys, polls, and interviews with the help of QuestionPro to manage your reputational risk. QuestionPro is a survey software platform that enables users to design and distribute online surveys, polls, and quizzes. It includes a number of features and customization options to assist users in designing and conducting professional-grade surveys.
- Assess your business operations
To identify gaps between stakeholder expectations and company performance, analyze how well you can meet them. Be objective and realistic to identify any flaws or areas that could hinder your reputation.
- Choose a strategy
Now that you have a better understanding of your business and its risks, now you should create a plan for dealing with them if they arise.
Use the insights gained from your risk analysis to help you select the best strategy. Use the QuestionPro survey software platform to get real-time insight into your business.
- Put controls in place
If there are actions you can take to reduce or even eliminate the risks, you should consider them. Digital solutions, improved policies and procedures, and effective training are all examples of actions that can help mitigate reputational risk.
- Keep a close eye on your risks
Risks can change even after they have been identified, assessed, and treated. Be proactive in monitoring stakeholder expectations and your business operations so that you can respond and adapt quickly to any changes.
- Think about using technology
Risk management software solutions can make the process easier. The right solution can give you more control over your business, allowing you to make better decisions. Throughout the risk management process, it can also increase your awareness of emerging risks.
Learn more about why understanding your Customer Journey transforms your CX program.
How QuestionPro CX help in managing reputational risk
QuestionPro CX can help organizations manage reputation risk in a variety of ways:
- To identify potential risks
Organizations can gather insights and feedback from stakeholders such as customers, employees, and partners by conducting surveys with QuestionPro. It can assist organizations in identifying potential reputational risks and areas where they are perceived positively.
- To monitor and measure reputation
QuestionPro CX enables businesses to track and measure changes in their reputation over time. Organizations can discover trends and areas of concern and track the success of reputation management efforts by frequently collecting and evaluating customer feedback.
- To address and resolve issues
If a survey shows that a company’s reputation might be at risk, the company can take steps to deal with and fix the problem. It could mean making changes to policies or practices or talking to stakeholders about their worries.
- To communicate with customers
QuestionPro CX is a tool that can be used to talk to customers. By regularly asking for feedback and addressing concerns, organizations can show that they care about customer satisfaction and build trust with their customers.
QuestionPro CX Reputation is a customer experience management platform for businesses that allows them to monitor and manage their online reputation. It accomplishes this by giving businesses tools to track and respond to customer reviews and ratings on sites like Google.
It can assist businesses in identifying and addressing potential reputational risks before they become major issues. Furthermore, QuestionPro CX Reputation provides analysis and reporting tools to assist businesses in better understanding customer sentiment and identifying trends and areas for improvement.
Businesses can use this platform to proactively manage their online reputation and reduce the risk of negative reviews or ratings harming their reputation.
Conclusion
Reputational risk can cause significant problems for a business, like financial losses, less customer loyalty, and low morale among employees. So, organizations need to take care of their reputations and find and fix any problems that could hurt them.
By proactively managing reputations, organizations can reduce the bad effects that reputational risk might have and protect their long-term success.
QuestionPro CX Reputation can help you to manage your company’s reputation risk. CX Reputation enables your team to cross-post and respond to comments across major public reviews and social media sites while also collecting and analyzing feedback using AI sentiment analysis and a real-time analytics dashboard.
Try QuestionPro today to get the best value for your company!
