The difference between reputation and brands

Building a brand, from a small business to large corporations, is crucial to a company's success. (Photo: Oupa Nkosi)

Building a brand, from a small business to large corporations, is crucial to a company's success. (Photo: Oupa Nkosi)

What an organisation says about itself and what others say about it is the basic difference between brand and reputation. Operating with an understanding of this difference is a business imperative. A positive reputation is critical for the survival and growth of an organisation. When the expectations of stakeholders such as clients and partners are not met upon interacting with a brand, the reputation of that brand is a negative one, and can adversely affect the bottom line and reduce business value. In the age of social media, stakeholders are likely to share their experiences with the brand, especially when the experience was an unfavourable, negative or frustrating one. Organisations must be thoughtful about how they engage stakeholders and remain vigilant of possible incongruence between what they promise and what others experience of the brand.

Reputation building does not happen overnight. Building and maintaining a good reputation is a long-term investment that requires careful management of what your brand promises, and what it is able to deliver. It has to take into account major shifts that influence how brands are received and engaged. A good product and good services alone are not enough if the workplace environment created by the organisation is not a positive one, or if employees seem miserable working at that company. Frequent engagement with a brand is key to how the public shape their perception on a corporate’s reputation. Each experience must validate and affirm what a brand claims to stand for and represent. Assessing a range of factors that contribute to reputation is important.

Corporate social responsibility and good employee management are increasingly becoming important dimensions of a good reputation. When companies are perceived to take care of their own, it creates a positive environment for all who are associated with the brand. Word travels quickly when there are unsatisfactory standards or systems of governance associated with a particular brand. Stakeholders are vocal and can express their view for a public audience to engage, and it may influence whether or not they want to access the product or service of that particular organisation. 

Competence and financial performance are still significant contributors to corporate reputation. The ability to remain competitive during challenging economic conditions contributes greatly to a positive corporate reputation. Companies with a strong financial performance and a healthy record of profitability create a positive perception of the brand’s ability to positively impact those who are associated with it. Proven ability to outperform its competitors increases stakeholder confidence in the business, and build trust that the brand can deliver. Achieving business goals and surviving economic challenges must be coupled with the creation of healthy work environments and good corporate citizenry.

Good corporate citizenry addresses the alignment of values between the business and its stakeholders. An organisation that is not seen to stand for something or is unclear on what it believes in risks being perceived as not being concerned about a greater good, the wellbeing of people, and doing what is right. Consistency in values, and commitment to living up to those values, are key to the sustainability of the corporate. Organisations are compelled to ensure that all members of the organisation, from management to the lowest-paid employee, represent the best the company has to offer. There is a high price to pay for corporates that do not invest in good corporate reputation management.

Investment in reputation management includes an ability to respond timeously when direct and indirect damaging events to a brand occur. When a business partner or associate is found to be guilty of poor governance or unethical behaviour, how quickly do corporates respond and disassociate themselves from such behaviour? Stakeholders may negatively perceive and rate organisations that are perceived as not acting decisively.

Solly Moeng, brand reputation management advisor and chief executive of strategic corporate communications consultancy DonValley, says that too often corporates underestimate the importance of a good corporate reputation. “Good corporate management must start from the top. Corporates should have a corporate reputation manager, someone who will think strategically, employ risk assessment strategies and understands the value of doing things right.”

The reputation manager will ensure that a favourable reputation is achieved and maintained in the marketplace, and that there are effective systems and procedures in place within the workplace to avoid risking the organisation’s reputation. Leadership is critical to corporates getting this right, but it is not the responsibility of leadership alone. Reputation is a function of what the people in the entire organisation do.

Recent examples of corporates who have suffered major losses due to negative perceptions of their reputations is a reminder of how expensive a poorly-managed corporate reputation can be. Moeng makes reference to MTN, who paid a large fine in Nigeria, negatively impacting on how they are perceived as a corporate citizen on the continent. More recently, Bell Pottinger, that is effectively no more due to a negative reputation, experienced the worst of what having a bad corporate reputation can do.

“One day you’re a multimillion dollar agency, and tomorrow you’re gone. The price you pay is huge,” says Moeng.

“Organisations must go back to the basic understanding of who their stakeholders are, what they want and how to keep them happy in their association with you. Even though an organisation cannot entirely control the reputation it has, it does have the responsibility to do what is necessary to protect its reputation, which is protecting its core business interests.”

Moeng says the goal should be to avoid crisis, not just manage them, because “managing crises takes resources away from the core business of business, which is to maximise shareholder value”.