What is reputational risk in business

What is reputational risk in business

Reputational risk is a threat to your profits that an unfavorable public perception of your image or that of your organization causes. When a business reputation is established, not only the company's activity is evaluated, but also the activity of its leading individuals. So whatever you do, it's worth paying attention to your image to make it work for you.

Reputation is an important component of each individual's personal brand, along with knowledge, ideas, style and stance on an issue.

Now you can see enough examples when business owners or partners affect the brand by their careless statements negatively and lose the trust of customers, and there are many examples when negative consumer feedback is detrimental to the business.

To minimize risks, companies attract specialists, and their services are expensive, as a rule. Not every business owner can afford it, especially at the start of their business activity, for example, in the partner program. How do you minimize reputational risks, build customer trust and make your business sustainable without involving specialists? You can do a few simple things:

1. Start by analyzing. Try to find out as accurately as possible who your target audience is and who your competitors are.
2. Assess the risks. Try to predict what kind of criticism is possible from customers and competitors.
3. Use as many channels as possible where you can interact with your customers and see their feedback. These are social media, your groups, messengers, blog, website, any references on third-party resources, topic-related forums, etc.
4. Learn to work off negativity. We shared how you can do it here. Try to draw up an algorithm of responding to criticism or complaints.
5. Create useful and positive content for customers. Customer benefit is your main tool. Think about it when preparing a webinar, posting news or performing other activities that your potential customer will see.

Working with reputational risks is complicated due to them being an external factor. Events that can affect your image are not always up to you. The best thing you can do to minimize risk: be in positive contact with customers, learn their needs, give only useful, accurate information, and always keep your promises.