Why Reputation is Undeniably Important in Business

A solid brand, or organizational reputation, is essential to a company’s survival. As online reviews and similar peer review sites have inundated the web browsing experience, consumers have entrusted these types of platforms with providing the necessary information to make purchasing decisions. As a result, traditional advertising has taken a back seat and companies worldwide are focusing heavily on managing and maintaining a dependable reputation. In the following article, we will look closely at the top 3 reasons why this reputation management is so important, and what impact it has on the bottom line.


Before diving in, let’s get a better understanding of what business reputation is and how consumers measure it. In short, what people feel and think about your business is your reputation. This includes their experience buying products and services, or what they heard about that experience through others. It can also include what people have researched and gathered about your organization, whether it occurs online or through communication with others. For example, review sites like Yelp and Google reviews are used by millions daily to research companies in various industries. Regardless of what you feel your reputation is or should be, the market will determine its perceived notions about your business.

How then is this reputation measured? Researchers will measure your reputation by how ethically you behave and how trustworthy your company is. If a public company, financial performance, and profitability will be studied. An organization’s employees, workplace, and culture can also be considered, as well as the overall management and leadership in place. Another measure may be the social responsibility of a business and what causes it may support. Lastly, metrics such as quality, reliability, and customer service will all play an important role in determining reputation.


As outlined, we know how important reputation is, but let’s get into the top reasons why a solid reputation is important in business:

1) Increases sales and profitability
First and foremost, reputation has a direct impact on marketing, sales, and overall profitability or losses. Having a solid reputation in the market provides a competitive advantage and increases overall sales revenues. On the other hand, a negative reputation puts an organization at a disadvantage and will harm the bottom line. Let’s take a look at a real-life, everyday type scenario. Assume you are in the market for a new car. As you research makes and models, you will look at reviews and comments from online resources and friends or family. Next, you will start researching local car dealerships to see who is reputable and trustworthy. Those dealerships that have a great reputation and reviews go straight to the top of your list, while any negative reputations will knock those off of it. The dealership that earns your business makes the sale and increases profits, while the others that are not reputable lose out on that opportunity.

2) Helps attract and retain better talent
A good reputation does wonders for recruiters and talent acquisition. Imagine recruiting for a company that has negative reviews online, poor customer service, and other issues that are causing the public to talk poorly about it. Trying to attract and retain talent in this type of environment is extremely difficult and costly. On the other hand, recruiters working at market-leading organizations that have a great reputation will have a much easier time finding top talent to fill open positions. As a result, competitive advantages, when it comes to talent acquisition, are gained by those with the best reputations in the market.

3) Improves customer loyalty
Customer loyalty is directly impacted by reputation. As we know, a memorable experience sticks with customers, whether it is great or terrible. While those great experiences will potentially bring you a long-term customer, a bad experience will lose you one even quicker. Because of this, it is more important than ever to focus on the customer experience, whether it takes place physically or digitally online. Although there are many strategies and technologies to engage with your customers, the perceived reputation will drive that consumer loyalty and future purchasing decisions.


Now that we have a better understanding of why reputation matters, many organizations are looking for technologies and platforms for managing it. With so many review sites, social media platforms, and other avenues for customers to either put down or praise a business, this can be challenging and time-consuming. Luckily, reputation management platforms, like Comparably, are available to make those processes easier and more cost-efficient. Reputation management platforms provide a number of benefits:

  • Puts you in control of your employer brand and provides more control over your public reputation
  • Helps showcase honest and transparent reviews from your team, highlighting your company culture
  • Amplifies your positive diversity and inclusion initiatives
  • Ensures a more accurate overview of your company’s reputation
  • Saves time and money

Clearly, reputation has a major impact on the viability and longevity of a business. Now that you have a better understanding of why it is so important in today’s business environment, it is time to take action! Spend some time reviewing your current reputation and the processes being used to manage it. Put together an actionable plan to improve it and be sure to continually be proactive in your approach. Your customers, employees, and bottom line will appreciate it.

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