the value of online reputation management (photo by https://www.flickr.com/photos/[email protected]/)
Online reputation management has a lot to offer businesses and individuals. Done well, improving your online reputation can have a number of benefits ranging from increasing your hireability and visibility to improving relationships with customers and employees, even improving your brand engagement, and ultimately, encouraging a healthier bottom line in terms of revenue and income. There’s no question that investing in online reputation management is well worth it.
The High Stakes Game of Online Reputation Management
Online reputation may not seem important until you need it. Your reputation often isn’t a consideration until it’s an emergency, such as when you’re dealing with a corporate crisis management situation, bad review, or personal defamation. But the fact is that there’s a lot you can lose if you don’t invest in a strong online reputation, and it can happen in an instant if you’re not proactive about maintaining your online reputation:
- Your career: Plain and simple, employers are checking out job seekers online — often before you even get an interview. Today, 92% of companies are using social media and social networks to find top talent, and candidates who are researched online with a positive outcome are more likely to be hired and maintain the position for at least three years. Something as simple as getting you confused with a criminal with the same name can have potential employers hitting the delete button instantly. Whether you’re searching for a new job or trying to climb the ladder at your current position, a bad reputation can keep you down.
- Your customers: It’s estimated that businesses in the United States lose more than $537 billion in revenue each year due to unhappy customers. And that’s assuming they were going to visit in the first place. They may not even give you a chance, as 80% of consumers won’t even consider buying from a business that has negative reviews.
- Your employees: Losing potential customers hurts, but even more insulting is losing otherwise loyal and well performing employees to a bad reputation. And it happens to businesses all the time now. 93% of currently employed people would leave their company to work for one that has a good reputation. And good luck replacing them, as 76% of people wouldn’t accept a job offer from a company with a bad reputation, not even if they’re unemployed.
- Your income or revenue: Losing customers, employees, or the ability to get a good job all boils down to one thing: money. If you can’t maintain these basics with a good reputation, you’re going to lose money, and that really hurts.
What a Bad Reputation Costs: By the Numbers
Can’t quite grasp just how valuable your reputation is? Consider these statistics that point out how much it costs to have a bad reputation — and how much you can benefit from improving yours.
- The annual cost of unhappy customers is estimated to be more than $537 billion.
- Totally satisfied customers spend more, contributing 2.6 times more revenue than customers who are just somewhat satisfied.
- Consumer reviews are more trusted than product descriptions, and they’re read by 8 in 10 consumers.
- Most consumers (80%) will not consider buying from a business that has negative reviews.
- Google reports that businesses with a three star rating or higher will receive 87% of the traffic, far more than businesses with lower star ratings.
- An unhappy customer cost United Airlines $180 million in stocks after the release of a negative video that went viral.
- For every one star increase on Yelp, restaurants see a five to nine percent increase in revenue.
- Even hotels may adjust their prices based on social media reputation.
- Roughly 80% of consumers will change their mind about a purchase after finding negative information online.
- 76% of people won’t accept a job offer from companies with bad reputations, even if they are unemployed. Older, more experienced workers are even less likely to accept offers from companies with bad reputations.
- Those who would accept a job offer from a company with a bad reputation overwhelmingly require a significant increase in pay, typically at least 50% more.
- Employees will gladly leave to pursue a job with a company that has a good reputation, with 93% of currently employed people ready to leave their current job.
- It typically costs businesses at least $3,500 to hire an employee. But the cost per hire for companies with strong employer brands is two times lower than those with poor employer brands.
- Companies with stronger employer brands have 28% lower turnover rates.
- 92% of companies are using social media and social networks to find top talent.
- Candidates who are researched online with a positive outcome are more likely to be hired and maintain the position for at least three years.
- After the Deepwater Horizon oil spill, British Petroleum made a multi billion dollar settlement, paid a $13.7 billion fine for violating the Clean Water Act, lost 55% of its shareholder value, and reported lowered sales between 10% and 40%.
How Much is Your Reputation Worth?
But even with these numbers, it’s tough to quantify just how much an online reputation is worth. You can tell how much money you have to spend in positive advertising, the man hours you’ll spend working on social media outreach, refunded products or vouchers, even any fines you may have to pay in association with any wrongdoing. But what you won’t necessarily be able to calculate are the customers, business partners, and job offers that have walked away quietly and without notice due to your bad reputation, possibly never to return.
BP will be dealing with the fallout of the Deepwater Horizon spill for decades, including a major loss of goodwill that may have cost them customers permanently. And like so many other vehicle manufacturers with dangerous recalls, Toyota is bending over backwards to invest in ad campaigns to rebuild its image. Ultimately, they know how much they’ve spent to fix the problem, but there’s no way to calculate how many customers the company has lost in the long term due to the reputation hit they’ve taken.
On a more positive note, it’s no coincidence that some of the largest and most successful companies worldwide also have the highest reputation ratings. Companies like Amazon, Coca-Cola, Apple, and Walt Disney are able to maintain stellar reputations and brand loyalty, reaping the rewards of their reputation in increased revenue.
At restaurants, online reputation value is easier to calculate. According to a Harvard study, restaurants will see a five to nine percent increase in revenue for every star increase on Yelp. The difference in revenue for a restaurant with three stars versus a restaurant with five stars could be as much as 18%. That means a restaurant with $1 million in revenue each year stands to lose about $180,000 every single year they suffer from a bad reputation.
Restaurants are an easy example to point out, but they aren’t the only type of business that suffers financially when they take a big hit on reputation. Hotels, attractions, online products, even local service providers like photographers will see a serious dip in customers — and revenue — if they fail to maintain a positive reputation online.
Even if you currently have a bad reputation, there is hope: if you’re able to improve your reputation, you could also see an improvement in your revenue. Hotel and wireless businesses that improve their customer experience scores by 10% exceed $1 billion in aggregate revenue.
How Online Reputation Management Helps
The value of a positive online reputation is enormous. Even for a small restaurant, a good reputation is worth well into the six figures. For larger companies and major corporations, it can reach into the millions, even billions.
There’s a lot at stake in online reputation, and if you’re plagued by a negative reputation, you may already be feeling the effects of it — and feel frustrated thinking there’s not much to be done about it as your reputation falls apart. You could throw your hands up and walk away, assuming there’s nothing you can do. Or, you can dig in your heels and fight. Guess which method we recommend?
You should know that negative articles and bad reviews typically won’t go away on their own — and they’re tough to beat in any case. But if you work on online reputation management, you have more than a fighting chance of succeeding in building a more positive reputation to support your personal or business brand, or both.
With effective online reputation management, you’ll benefit from a multi pronged approach that protects your reputation now and well into the future. The best reputation management fixes issues not just in the short term, but also establishes a positive reputation in the long term to provide an even better value for your investment over the coming years, even decades.
Online reputation management includes:
- Building and maintaining a social presence: One the simplest ways to improve your online reputation, building a social presence helps you claim top search engine spots and improve your profile online. But it’s not enough to simply register and walk away. Effective online reputation management will not just establish your social presence, it will maintain your profiles and build your online engagement for a better reputation.
- Review management: Many businesses are concerned with online reviews, and negative reviews in particular. This concern is not unfounded, as reviews are highly influential for customers, particularly online and in the local setting. Online reputation management monitors reviews as they come in, reaching out to reviewers and engaging with customers, including those that leave negative reviews that should be addressed.
- Reputation monitoring: Online reputation management also monitors online articles, social media posts, and other sources of information to identify and address and threats to your reputation. It also identifies positive developments in your reputation so that you can highlight them as social proof.
- Online content creation and marketing: Another great way to stand out online and build a more positive reputation, building online content with your reputation in mind puts you or your business in the best light possible. It allows you to better control the conversation surrounding your brand, and contributes more positive content to your online search results that can ultimately push down negative entries you’d rather never see again.
- Public relations including email newsletters: Online reputation management also focuses on outreach to strengthen existing relationships. With online reputation management, you’ll be able to improve your relationships with employees, customers, vendors, and more — and increase your outreach to get connected with others who support your positive brand.
With something as valuable as your online reputation, it’s tough not to justify the investment in online reputation management. With the help of experts in online reputation, you can build a positive reputation online that’s worth far more than the cost it takes to build it. And better yet, that reputation will continue to serve you — and your bottom line — long after you’ve begun to build it.