Reputation and the SME

Reputation is considered to be important, but why?  First of all I’m going define what reputation is.  I’ll take Steven Nock’s definition as “a shared, or collective perception about a person.”

I would take the word person to include a legal entity such as a SME company.  Also note the word perception.  It is quite possible for a good person to have a bad reputation.  It is also quite possible for a company to be trading on its past reputation, but delivering at a lower level than its competitors.

Daniel J Solove in his book The Future of Reputation notes that “We have a lot at stake in our relationships…in many circumstances we look to people’s reputation to decide whether to trust them.”

For most of us trust is a very important ingredient in business.  This is especially true for the majority of SME's that obtain work through recommendation.  Anything that damages trust and reduces that chance of recommendation for the SME should be a real concern. Loss of reputation is without doubt a genuine business concern.

When it comes to reputation men and women have for centuries been concerned about their reputation and with good reason.  The opinion of the individual’s community could be a matter of life or death for individuals such as “witches” that did not fit comfortably within the norm.  Whilst the consequences of reputation damage are unlikely to be as dire in the modern business world the means of the damage are similar and often result through:

1.    Reputation damage brought about by untruths and dubious data,
2.    Reputation damage by shameful behaviour or action that doesn’t meet the norm being exposed.

One strategy to avoid reputation damage is to keep a low profile, but given that a good reputation can help build trust and bring businesses keeping a low profile for a business is not always the best approach.

My own take on the situation is that the internet is bringing with it transparency and also leaving a trail that is likely to be semi-permanent.  The approach I can recommend is to be involved in something where you really strive to deliver and of which you are personally genuinely passionate.  It should reduce the risk of point 2 above and with any luck your business will have some supporters to stand up to any nonsense from point 1.   

Comments

[Will - ArenaFlowers.com]

One thing we do is try very hard to hold on to advocates, as we believe that people saying good things about us is a lot more credible than us telling people good things about us. We also try to make use of customer feedback emails and use third party ratings systems to reflect independent feedback on our service. Having said all that, you can never fully mitigate against trolling and other negative behaviour from disgruntled people..

[Philip Woodgate]

Hi Will

Thanks for the comment. As well as the people saying the good things. I'm a great believer of trying to turn your critics into supporters. The critics who make well thought out cases should be listened and talked to. They are likely to have some very good points. Then it is a case of putting into action ways to deal with those points.

[Andy Warren]

With the growing strength of blogs, it's becoming even more difficult for a company to protect its reputation by anything other than being good at what it does and responding quickly. A critical blog cannot be easily silenced and the more damaging it is the more likely it is to spread. Try googling "22 Confessions Dell" to see an example of this.

Another recent example is Primark, who have been criticised for unknowingly using suppliers that employ child labour. Having been made aware of this, they have stopped using the suppliers and are now being criticised for taking away employment from those who need it. They're probably feeling they can't win right now.

In the banking, retail and ISP industries there is widespread use of something called the Net Promoter Score (NPS) which is a measure of how likely it is that a customer will recommend you to a friend of colleague. This simple and effective measurement of the level of reputation (who would recommend a company if they thought they had a bad rep) is a great way to assess where you stand as a business in your market.