Corporate reputation affects a company at many levels. One of its most immediate and important impacts is on sales.
Research shows that an average of 6.5 people are involved in major buying decisions in a large company. However, would-be sales representatives meet, on average, just 1.7 of them.
The remainder assess buying propositions on the reports of these 1.7 people – and what they already know about the vendor.
Sales representatives cannot use the power of personal persuasion to influence these decision-makers because they never meet them. Their success in making a sale to these people relies on their company’s reputation. [more]
Most consumer purchases are based entirely on what the buyer knows of the company or brand.
The brand and the company are often the same thing – Virgin, for example, puts its name to everything from music to train travel. Other companies operate different brands for different markets. BMW, for example, sells cars under its own name but also seeks to persuade us that a Mini or a Rolls-Royce (both brands which it owns) are something different.
Whether it is a company name or a brand name, its reputation has an impact on sales.
At a basic level, the buyer will consider whether he or she has ever heard the name before. If not, and your competitor is well known, you are at an instant disadvantage because there is always a risk when buying from an unknown supplier. Even at the level of a chocolate bar, purchasers will hesitate before spending 50 pence on a bar about which they know nothing, and which there is a risk they may not like, rather than buying a familiar brand.
If the name is known to the buyer, what does it convey? Have purchasers heard good things about your company or brand – or bad ones?
If potential purchasers do a bit of research online, what will they find? Good news, bad news – or none? How well does your website represent your company and its brands? What are other people writing about them?
The potential impact of reputation on sales is obvious, when you stop to think about it. However, the impact of reputation extends into other areas besides sales. Research shows, for example, that graduates will not apply for jobs in companies which they perceive as having a ‘poor’ reputation. Finance is easier (and cheaper) to acquire for a company with a good reputation than for a company with a bad one.
So it may well be worth investigating what potential customers, employees and shareholders (to name but three important groups) think about your company and its products or services. How does your reputation compare with your competitors? Is it strong enough to close a sale? Is it helping or hindering your recruitment activity?
If you are unhappy with the results of your investigation you may need to do one or both of two things.
The first, and easiest, is to overhaul your communications activity. Tell customers, and the world, about the good things you are doing.
Even the best of communications, however, will not conceal things which are fundamentally wrong. At a second level, therefore, you may need to reconsider the way you do business (or even the business you are in) if it is damaging your reputation.