What Are the Most Common Reputational Threats to an Organization?
The relatively volatile social and media environment makes good PR a highly sought aspect of a business. At the same time, brand reputation has become fragile to the unwavering expectations of the masses. As a result a sudden wave of negative mentions can be fatal for a start-up or small business. According to studies by the World Economic Forum, 25% of a company’s market value is directly attributed to its brand reputation.
How to Spot the Worst Reputation Threats
Most crisis situations are developing over time and some can be averted with a contingency plan. Here are the most common reputation threats and how to anticipate them.
A hack or security breach carries a great reputational risk that can undermine relations with customers and damaging a brand for years. Even the hijacking of a brand’s social media account will have a negative PR effect.
There’s not much the marketing and communications teams can do to pre-empt threats beyond requesting that their employers or clients have proper security infrastructure. However they can prepare for the crisis situation, given that a data security breach is one of the common reputation threats. It’s not only possible, but likely to happen in today’s online environment.
The most important aspect in such a crisis situation is how it is being handled. In order to minimize the reputation impact, every business should have a contingency plan for addressing such an event in a timely manner.
The Viral Customer Complaint
The viral customer complaints have already been several times observed, especially when it involves a bigger brand. As public relations and customer support increasingly overlap, employees should be empowered to take quick action in case of an issue. A responsive customer service will keep the issues from escalating into a viral complaint on social media for example. Customer service representatives should be incentivized not by the number of complaints they handle, getting customers off the phone quickly and efficiently, but by the number of complaints they actually resolve to the satisfaction of consumers.
A transparent culture can minimize any brand threat from the interior, and conversely, a repressive culture will make it worse. Many companies choose to ignore any possible internal cultural problems (e.g. cases of sexual harassment, or workplace maltreatment), which then can have a devastating effect on the company’s image once the crisis situation unfolds in the public space.
How an organization treats an employee who reports misconduct―or how it treats any complaint that can threaten corporate brand reputation―is at the heart of its culture and a good indicator of its PR resilience. A company that has ethical behaviour and openness permeate the whole organization will be better equipped to identify major reputational threats before they damage the brand.