It’s a question that has plagued salespeople since trading began: what influences a customer to buy from you over your competitor? No doubt price, quality, and convenience are key factors, but reputation is becoming increasingly important in the eyes of the consumer.
Recent research has suggested that almost three-quarters of Irish adults now consider a company’s reputation when buying a product or service. These are highly educated consumers, who, fed on a diet of constant access to news media, demand to know more and more about the companies they buy from.
Great change is taking place in consumer habits, and the speed of that change is continuing to challenge all businesses. The boundaries between the online and offline worlds are growing increasingly blurred, bringing new challenges for business and new channels to consider when managing your reputation.
More than ever, customers are going online to learn more about a company’s offering before they buy. Last week saw the launch of Accenture’s annual Consumer Pulse Survey, which highlights this increasingly prevalent trend. The report found that 71% of Irish consumers view a company’s website as important in their decision making process and that 64% visit comparison and review sites before purchasing.
It is said that, on average, a dissatisfied customer will tell 10 people about their experience. But how do negative online reviews affect a company’s reputation? As we all know - the internet never forgets! We live in a world of viral, a world where a strong Tripadvisor rating can work wonders in attracting customers, and a negative rating can dissuade thousands of customers in an instant.
When the dust settles on the changing consumer landscape, Irish businesses will be faced with a very different customer - the frivolous spender of the boom years is no more, being replaced by a cautious no-nonsense buyer.
While the changing consumer will continue to be a focus of attention for Irish business, and rightly so, the truth is, when it comes to reputation management, the basic principles still hold. Companies who adopt best practice will be best positioned to navigate this unchartered territory. As a starting point, it is absolutely critical that a company’s product and service live up to customer expectations.
Over and above this the guiding principles of reputation management should include:
- Ensuring reputation informs and influences overall business strategy
- Identifying and understanding the stakeholders critical to the success of your business
- Building trust by communicating, engaging and influencing stakeholders in an open and honest manner
- Measuring the views of stakeholders in a structured manner and adapting accordingly
- In times of crisis, being true to your reputation principles and values
If companies consider these five steps in their day-to-day business activity they will be much better positioned to respond – in both real and virtual worlds.
In 2004, Amazon founder Jeff Bezos told Businessweek, “You earn reputation by trying to do hard things well. People notice that over time.” The company topped the 2014 Harris Poll Reputation Quotient Study, which also found that 6 in 10 people decide not to do business with a company based on something it learned about its conduct.
According to Accenture, Ireland’s ‘switching economy’ is estimated to be a whopping €13 billion, representing about 16 percent of consumers’ annual disposable income.
Given that Irish consumers are voting with their wallets for reputable companies, there’s no question that Ireland Inc should put reputation firmly on the agenda to ensure it doesn’t lose its way on the road to recovery.