A strong reputation has the potential to be your largest asset, but just one crisis could irrevocably tarnish your image and ruin your business.
Health and safety incidents, product recalls and regulatory investigations are just a few of the incidents that have the potential to damage your reputation; and, now that social media and other online sources have accelerated news coverage, you may only have minutes to respond to a crisis and protect your image. The failure to quickly and effectively address a crisis can result in lost business, litigation, regulatory fines and more.
The Role of Social Media
Social media can be a powerful tool to connect with customers and extend the reach of your business, but it can also be used to quickly spread negative publicity that can severely harm your reputation.
In an increasingly connected world where anyone with a smartphone can act as a journalist, any negative experience a consumer has with your business has the potential to go viral and be seen by thousands—even millions—of people. Make sure that your business has a social media presence that is constantly monitored, and that it quickly responds to any criticism or negative customer experiences in order to maintain your reputation.
Strategies to Lower Reputational Risks
There is no such thing as complete protection from the risks to your reputation, but there are strategies you can use to limit exposure and respond to a potential crisis:
- Create strong, relevant corporate values: Upper management should create—and regularly communicate—strong corporate values that permeate every level of the business. Though these may be created by upper management, they should reflect the values of all of your employees and stakeholders.
- Integrate a risk evaluation into business planning: Identify the opportunities, threats and assumptions that accompany your business’s plans and strategies. Don’t assume that longstanding strategies or well-developed plans are free from reputational risks; instead, develop hypothetical scenarios to identify how your reputation could be affected.
- Promote positive interactions with customers and other stakeholders: You can strengthen your reputation before a crisis occurs by aligning your goals and connecting with your stakeholders. Customers appreciate regular and positive interactions, and you can use social media as a tool to reach out to them.
- Develop a reputation plan: Train everyone at your company on how to recognize a reputational crisis, and put together a response team. Your plan should identify all potential risks to your reputation and map out a response for each. These responses should include key statements that identify at least three talking points and restate your business’s core values. If a crisis occurs, distribute relevant messages as quickly and widely as possible.
Limit Your Risks
It’s inevitable that every business will experience some form of reputational damage, but there are ways to limit your exposures and to cover losses. Contact Rue Insurance today to identify your unique risks and protect your business.