The risks of bad e-reputation

Impression

Whether it’s a company, an organization or a person, the (e-)reputation is a complex concept to define and track. Yet its deterioration could lead to dramatic and measurable consequences.

Why we want a good e-reputation

Companies with good reputation attract success more easily than others, first by attracting the right partners, co-workers, or even customers.

The good reputation of a company is seen as adding extra value to its products and services. This allows them to set higher prices. Also, their customers are loyal. And because these loyal customers also pay for a positive experience with the company they know and love, they might be interested in a wider range of products and services.

Because investors believe that these companies will generate stable earnings and future growth, their shares are more valuable.

Besides, non-quantifiable strengths of a company might be affected by a bad reputation, such as brand equity, intellectual capital, staff motivation…

Internet disrupted the time and measurement scale of businesses’ image

And today, as the era of Web 2.0, (the social web,) the negative experiences quickly turn viral on social networks.

Example:

For a few years, the school Supinfo has been known for paying its teachers late. As a result, qualified teachers don’t want to work with them and the school struggle to replace a leaving teacher. To fill the shortage of teachers, Supinfo develops a system that allows them to hire their own successful students as teacher-students: in return, these students are exempt from some classes and exams that are usually mandatory for receiving the diploma.

In addition to the deterioration of the teachers’ qualifications (and thus the quality of the education they offer), one consequence of the shortage of teachers is that Supinfo can’t provide quick appointments to students having to take an oral exam, delaying their diplomas. And all of this contributes to reinforcing their bad reputation.

Indeed, the role of the customer is evolving: he can act on the consumption habits by giving his opinion, inquiring before purchasing, discussing with other customers, etc. So the e-reputation is now a major factor in the success or failure of a business.

The 3 main risks of having a bad e-reputation

  • Informational abuses, including the dissemination of negative consumer reviews, denigration, rumor and the spreading of false information.

The modern consumer does not buying anything on the internet without having done a minimum of investigation. He will trust another internet user more than a commercial representative, because he believes the other user wants to share his real experience while the representative wants to sell something. Thus, depending on the product or service a business sells, the sales volume might be affected by informational abuses.

Also, if the company is publicly listed, these types of actions can lead the stock price to decline.

  • Violations relating to identity, such as the misappropriation of a logo, usurpation or diversion of a brand or product.

These violations make a company lose grasp on its own communication. Most users are not able to distinguish a fake from the real communication of the brand.

  • Technical infringements, such as phishing, hacking, flog, splog, cybergriping or cybersquatting.

Phishing: to make someone think he’s talking to a company or someone he trusts to get personal information.
Hacking: to abuse security holes of a website, to change something in it, to get confidential information, or just to brag: pointing to the inability of the company to keep the information users might have given them confidential.
Flog: a fake blog looking like it’s owned by a consumer, when actually it’s owned by communication professionals.
Splog: contraction of spam and blog. These blogs are usually full of hyperlinks leading to another website to boost its SEO. It might include copy-pasted content from other websites.
Cybergriping: to use a domain name associating the name of a company and a pejorative term. Ex.: www.jeboycottedanone.fr.
Cybersquatting: to buy domain name(s) of a company before they do it. The e-reputation of the company is indirectly threatened as it depends on how the domain name will be used.

Get a strategy to not only develop but protect the e-reputation

For the past few years, to protect their e-reputation, companies and individuals have started to monitor their e-reputation, and to set up prevention mechanisms, as well as rectification or « counter-attack » ones.

Here are 3 quick wins to prevent a bad e-reputation:

  • Staff awareness: employees make good ambassadors on social networks.
  • Confidentiality clauses: prevent any disclosure of confidential information.
  • E-reputation monitoring software: save time and avoid missing any information.

These are obvious quick prevention solutions. Yet a company might want to hire an e-communication professional such as a social media manager or a community manager who can commit time to develop a really efficient communication strategy on social networks.

 

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