Reputation is of value to business: it earns the trust of your customers and builds respect in the marketplace, which translates into real dollars when the trust and respect earns you the business of new customers and helps to retain the loyalty of existing ones.
Social Media Changed the Rules
The internet began as a broadcast medium, where a company could push its message direct to the audience, with no filters in-between. However, social media is changing the nature of the game: anyone can speak out, to a large audience, about your company.
It used to be that a company only had to be concerned with the national news media: a story that made the evening news, or a major newspaper, could do serious damage to a company's reputation. Now, every person online is a news outlet, and the collective voices of average people is a much more powerful voice than the mass media.
The effect has not been entirely negative: customers can evangelize as well as criticize, and a company who has managed its reputation well can find that they have many allies. An example is given of a newspaper that published a story about a company that was stilted and unfair, and tens of thousands of people reacted in the company's defense.
The concept of radical transparency requires a company to be completely forthcoming and ruthlessly honest online, taking actions that were once regarded as radical and inadvisable: admitting mistakes, revealing your internal processes, engaging stakeholders directly. It also requires you to be authentic: the Internet community "comes down hard" on those who employ spin, control, manipulation, or spam.
The authors present a few facts in support of their position:
- 95% of executives believe that corporate reputation plays a major role in achieving their business objectives
- 63% of a company's market value is estimated to be a result of its reputation
- The companies on a top-ten list as "most admired" have an ROE of nearly three times that of their industry averages
Every company has a reputation. If it's not been carefully managed, chances are it is not as good as it could be - but except in cases where a company has taken serious damages, chances are it can be improved. It will be a gradual process, but it will pay dividends.
This book is intended to provide a clearer conception of what reputation management entails, and to enable them to address the task more effectively.
The book is divided into three sections:
- Chapters 1-4 - Explain the concept of reputation in the online medium and the impact it can have upon a company
- Chapters 5-11 - Provides information about the techniques a company can use to build a positive reputation online
- Chapters 12-15 - Focus on the tasks needed to maintain and repair your online reputation