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Business Strategy Best Practice

Digital Reputation Management

by Shireen Smith

Executive Summary

  • The impact of Web 2.0 and social media.

  • Managing reputations: proactively and reactively.

  • Gauging the company’s online presence.

  • Handling negative content.

  • Search engine optimization, forums, defamation.

  • Anonymity, enforcement, litigation and jurisdiction.

  • Monitoring conversations, and engagement.

  • Putting in place a strategy.

Introduction

The changes happening in the world with the arrival of social media are having a far-reaching impact on the ways we do business, communicate with one another, and engage with our customers. The impact of social media as a communication channel is apparent when we compare it to earlier developments in society (Table 1).

Table 1. Growth of media formats

Medium Time taken to reach 50 million users1
Radio 38 years
Television 13 years
Internet 4 years
iPod 3 years
Facebook 200 million in 1 year

Yet we are still at an early stage of this revolution in society. In the early days of the Internet, when websites and email addresses were uncommon, we gradually began to see what were then odd-looking address details appearing on people’s business cards and letterheads. Nowadays, any business without a blog, Facebook page, and Twitter account is behind the times, and people are increasingly putting their Twitter handles and other social media address details on their business cards.

Key in this new age of instant global communications, where the influence and reach of word of mouth is growing, is effective management of your business reputation. To grow and prosper, companies need to build reputational capital among all stakeholders. Although a company has many different stakeholders, each one reacting to a specific facet of its business (as employee, supplier, financial investor, or client), in fact they are all sensitive to the company’s ability to meet the expectations of all its stakeholders.

As there is a link between reputation and share performance, companies are very sensitive about their reputation nowadays and appreciate the need to manage their visibility and actions to maximize reputational capital. How quickly trust in an organization can be lost is evident from the damage to Ratner when its CEO called the jewelry which the company sold “crap” in 1991. After this, and a subsequent comment that Ratner’s earrings were “cheaper than an M&S prawn sandwich but probably wouldn’t last as long,” the value of the business dropped by £500 million, as the share price went from £4 to 10 pence.

Reputation is a judgment from the market that needs to be preserved. Changes in reputation affect all stakeholders. Monitoring reputation is designed to ensure that the behavior and performance of the business consistently meet or exceed expectations. With the growing importance of social media, companies are extending their monitoring to include online discussions.

Web 2.0

As participation in social media platforms such as Facebook, LinkedIn, Twitter, and blogging increases, it becomes necessary to know what is being said about you in order to protect reputation. Whether a company is a web-based business or a bricks and mortar one, it needs to understand that conversations about it will take place online regardless of whether or not it takes part in them.

It’s hard to remember a time when only those with specialized skills could post content online. Yet it was only a few years ago that the development of blogging platforms, enabled by Web 2.0 technologies, made it possible for those without specialist web skills to freely communicate online. It is not an exaggeration to say that this change has revolutionized society. The fact that so many people are engaging in discussions on the Web, and are commenting on blogs, forums, and social media sites—sometimes anonymously—is one reason that companies need to keep up with these trends and monitor the digital space.

What makes comments a matter of serious concern is that they can be instantly and indefinitely accessible to millions of people around the world. If a consumer is dissatisfied with a product or service, Web 2.0 makes it possible for them to broadcast their disappointment worldwide. This takes on more sinister significance, as what may have originally been a grumble down the pub heard by a handful of people is captured and remains there for everyone to see, possibly for years.

Even if the original site where the adverse comment was posted has disappeared, the comment may remain cached in a search engine or appear on other websites or blogs. Indeed, it matters a lot on what type of site comments appear. The important point is that whether there is any truth to online smears is immaterial. Once a smear is on the Internet, it’s in the public sphere, where it stays. Therefore, as people react more and more to names and reputations, to rumors and word of mouth, and given that so many conversations are taking place online, management of digital word of mouth is more necessary than on any other medium. Being able to respond quickly and appropriately to whatever is discovered is one of the fundamental pillars of online reputation management.

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Further reading

Books:

  • Beal, Andy, and Judy Strauss. Radically Transparent: Monitoring and Managing Reputations Online. Indianapolis, IN: Wiley, 2008.
  • Brown. Rob. How to Build Your Reputation. Penryn, UK: Ecademy Press, 2007. Includes a valuable foreword by Sir Digby Jones explaining the critical importance of reputation to businesses.

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