Starting a business requires capital to get started and to maintain stability. When a company has capital, it has assets, both tangible and intangible, that signifies its financial strength. Tangible assets include that of money, equipment, real estate; physical existence. Intangible assets are those of nonphysical existence such as patents, trademarks, copyrights, goodwill and brand recognition.
Financial capital is important to businesses for growth, development, and sustainability. However, there is a type of capital that is just as important as financial capital, if not more important, and that is reputation capital.
What exactly is reputation capital? In the April 9th edition of Business 2 Community, author Brianne Schaer states in her article “What is Reputation Capital?” that a company’s reputation capital is just as important as is financial capital and is one of the most important aspects of any business and the most difficult to quantify. “Reputation capital is the value of the intangible assets of a business. Anything from reviews to brand identity can build reputation capital, and it can essentially be summarized in one word: trust. How much do people trust your business? The more trust there is in your business, the greater its reputation capital. Your reputation allows you to gain the trust of your peers (Schaer, 2019).
Businesses must recognize that its online reputation is much like capital. The opinions that consumers post about your brand or product, and your company, whether good or bad, is your online reputation. That’s why it so important to manage your online reputation to control what shows up when someone looks up your business online.
When someone search for your company, their first port of call will be to do a Google search on them. Whether it’s searching for your company or your brand, the information that comes online creates a picture, informing how potential customers, clients, and connections see you. You want to make sure that what they find is positive. Managing your online reputation will not only help you acquire new customers but will also help you keep your existing ones (Digital School of Marketing, 2019).
Online reputation management (ORM) involves listening and monitoring. It’s being both reactionary and proactive to create balance, counteract misleading trends, and putting your best foot forward. ORM also shows consumers that their opinions matter and that you are actively making sure you that you tailor make your service to respond to their needs. (Digital School of Marketing, 2019). ORM can also help in similar negative things not repeating itself in the future. Your online reputation is one of the most important things to protect. It’s your reputation capital.
Building a positive image is key to building reputation capital. Maintaining a positive brand image can reap many benefits that can allow a company to increase prices, dissociate from certain other brands, or capitalize on a certain market.
There are number of software tools available to help companies with online reputation management. These tools have been created to enable it to monitor what is being said about a company in real time, no matter where these opinions are published (publicly) online – whether it be social media sites only, or the entire internet (Larson & Draper, 2019, chapter 11).
Remember, your reputation is fragile, and can change quickly. The experience you provide customers online will heavily influence their opinion of you. “Corporations need to do more to gain people’s trust. It’s not enough to simply put out a product or service and invest in traditional marketing and advertising. A company needs to convey that they care about their clientele, exercise good ethical and transparent principles, and can convey their personal story in a way that is memorable and relatable. These factors contribute to building reputation capital in today’s fast-paced world” (Schaer, 2019).
References
Digital School of Marketing. (2019, April 3). How online reputation management can increase customer retention. In Biz Community. Retrieved from https://www.bizcommunity.com/Article/196/669/189307.html
Larson, J., & Draper, S. (2018). Digital Marketing Essentials (Fall ed.). Idaho Falls, ID: Edify Publishing.
Schaer, B. (2019, April 9). What is Reputation Capital?. In B2C: Business 2 Community. Retrieved from https://www.business2community.com/branding/what-is-reputation-capital-02187936

