Reputation damage is the No. 1 risk concern for business executives around the world, according to a Deloitte study of 300 C-level executives. Forty-one percent of C-level executives who experienced a reputation risk event say loss of revenue was the biggest impact. Having a plan for reputation management allows companies to emerge from a crisis even stronger, but companies must do their due diligence before a threat occurs.
Given the speed with which crises can develop, it’s important to proactively invest in reputation management as an ongoing strategy in your marketing plan. Equifax, United and BP all thought they were prepared for a crisis. A lapse in cybersecurity, a bad decision by an employee and not being mentally prepared for a crisis not only damaged their reputations but had economic ramifications.
- Equifax says the cybersecurity breach cost them $1.4 billion
- United settled with the passenger for an undisclosed amount
- BP lost $105 billion in market value between the oil rig explosion and their CEO leaving
While you might not think of your business in the ballpark of Equifax, United or BP, we live in a reputation economy. It only takes one slip up. Sadly, companies experiencing a crisis oftentimes become prime time entertainment on the news and social media, intensifying the damage to reputation and thus, market value. Companies can’t take their eye off proactively managing reputation.