Every organisation irrespective of the size and operation is subject to reputational risk. Reputation is one of the most significant assets of a company, and this is why reputational damage can ruin your business. People are buying your products and services as they believe you.
Large companies are more prone to reputational risk compared to those who are small and medium-sized and start-ups. However, it does not mean that you do not need to minimize your reputational risk just because you are new to the market or the size of your company is small.
To understand the examples of reputational risk, first, you should know what they are. Generally, bad publicity tarnishes revenue-generating ability. For instance, a manufacturing company caught fire and lost equipment that resulted in the production pause.
If you do not resume the production – at least before the currently available products in the market fall short of meeting the demand – your customers will lose confidence in you. However, not all the time it is caused due to some unexpected reasons.
For example, if you are a financial institution and provide very bad credit loans, you can invite a barrage of criticism if you lend more money than the borrower’s affordability. This is because it can throw the borrower in a debt trap, and they can denounce you across social networking sites. Here is how you can protect your business against a bad reputation.
Have a Policy Against Data Breaches
Nowadays, it is easy for hackers to steal customer data. Customers’ personal information is very confidential. They have signed up to buy your products and services in the hope that nobody would misuse their personal information.
Though it is not entirely under your control, you can still make a plan to mitigate the data breach risk. First off, you can educate your employees on how to recognise phishing emails. You should keep updating your data security control.
Hire an encryption expert to prevent a data breach. Some advanced software solutions are typically designed to detect suspicious activities, or you can also purchase cyber insurance protection.
Be Careful of Customer Service
Customer is king. If your users are not happy with your products and services, you will end up with negative publicity. Social media sites have made it easier for people to slag off companies. You cannot afford to disappoint even one user.
It can be tough to recuperate from negative publicity. Therefore you should be careful at every step of the customer buying journey. Customers likely come up with some problems after buying your products. Make sure that you solve their grievances immediately. Keep your staff trained to patiently listen to customers and provide them with an effective solution.
Sometimes, customers leave you and go to your competitors because of lack of communication skills. Make sure that your staff can communicate well to customers.
For instance, if, as a financial institution, you are providing doorstep loans for unemployed and credit card deals, make sure that your staff explains all features to the applicants to avoid arguments later.
Financial institutions should be more careful about customer satisfaction because it is a matter of money, and hence there is always a risk of losing reputation.
Keep Your Employees Happy
When it comes to the fear of losing reputation, you often think that keeping your customers happy. Reputation risk is a broader term. It is subject to everyone who is associated with your organisation directly or indirectly.
Disgruntled workforce can also be the cause of inviting bad publicity. Company culture plays a paramount role to keep your staff happy. From remuneration to accolades, everything takes into account to decide if the company culture is healthy.
If you do not want to lose talented people and to have those spreading negative reviews, you should establish a policy that treats all employees fairly.
Address Small Problems Quickly
Never forget that it needs a spark to ignite the fire. Likewise, small issues can lead to big problems if you do not nip into the bud. If you have received any complaint about any defect in your product or service, you should immediately consider solving the issue.
Social media platforms are the most common way to spoil the reputation of a company. While it is crucial to focus on your core activities, you should also monitor the activities on social networking sites to ensure that people are satisfied with your business and not promote any negative publicity.
Sometimes, competitors are also responsible for bad publicity, so keep an eye on your competitors’ activities too.
If you want to prevent your business from a negative reputation, you will have to be careful about every aspect of your business. As you notice any issue that can ruin your brand image, try to nip into the bud immediately.