Do You Have Reputational Insurance? The Good News is You Don’t Need It.

Wait – Reputational Insurance… is that really a thing? It is, but not in the way you think.  You don’t need an Insurance Broker.  If your company is true to its brand, if your company is transparent, if your company has built and maintained solid relationships with your key stakeholders…you’ve got reputational insurance.  So, when your company experiences a blip, it’s not a game-changer. 

Consider a company that claims that for every widget bought, a widget is donated to someone in need. Customers are drawn to that company and that product due in large part to the charitable component. And consider that this company, over its 20 years in business, has donated 20 million widgets.  Impressive, no?  Now, in Year 21, a reporter leaks information that this company has not donated a single widget all year, even though it continues to make that claim. 

Sounds like a disaster in the making, doesn’t it?  

Yet, if that company were to communicate with its key stakeholders (the media, shareholders and customers) that there has been an upset with its transportation vendor and that all the widgets are just waiting to be shipped once transportation opens back up…crisis averted.  That trust and transparency and faithfulness to its brand will dampen any potential harm to its reputation. [On the other hand, if the response is, “It’s been a tough year and we just couldn’t afford it right now,” well, get the crisis team ready.]

Lest you think your reputation only comes into question when there’s a crisis, think again. 

Consider the company that has a product with a glitch.  Customers complain, industry experts dog the company for a fix and the response is “it’s coming.”  This is a leading-edge product but there are three other companies getting ready to launch something very similar…without glitches.  Not exactly a crisis.  After all, the product works. But, customers may be hesitant to be early-adopters of any of this company’s future products, believing they go-to-market before they are actually ready. 

So is the reputation of this company impacted?  That all depends on what they have in their “reputational bank.”  If they are a new company with no prior history in the marketplace, this may do them in.  If they are a company that has established trust with their customers, industry experts and their investors, this may simply be a blip.  Their stakeholders know the quality of their products and the weight of their words.  

Bottom line, you can’t buy reputational insurance, but you can earn it.  And you should.  Start today – not when a crisis rears its ugly head.  Be honest, be transparent, be a company your stakeholders can trust – and communicate often.  This is where having an exceptional communications staff comes into play – they build those relationships for you with customers, investors, elected officials and the media.  Your company reputation is not just to be managed; it is to be fiercely protected.

Ready to invest in your company reputation?  Contact Patty Deutsche at Volterra Communications, because your company reputation matters.