The hotel industry has started setting room prices based on reviews from booking websites. According to a Harvard study, reviews on Yelp translate directly to a restaurant’s revenues. An 18 percent difference in profits has been recorded between 3-star and 5-star restaurants. However, while it is fairly easy to check the reputation of a travel company or restaurant, it is a completely different story when it comes to large organizations.
A company’s reputation depends on multiple variables, and factors more beyond mere good press coverage are becoming increasingly important. These factors vary for every industry, ranging from employees’ opinions to comments posted on social media. There is, however, one factor that is common to them all – the image of the company’s CEO. If they are seen and heard to act as true leaders and can convincingly present their corporate vision to the market, then that company stands out from the competition. Customers also expect CEOs to be more involved in current global issues, and not just pressing company matters. A study by Edelman showed that 73 percent of respondents believe that, as well as focusing on boosting profits, companies should takes steps to economically support their local communities. We expect businesses to offer good products and communicate with their customers, but also to act responsibly. Recently, Burger King decided to withdraw plastic toys from its children’s meals, which the fast food chain first introduced back in 1990, copying McDonald’s. Now, the latter will most likely be copying the former considering the significant increase in customer awareness; nowadays, even children understand the need to cut back on plastic. Speaking of which, this single move by Burger King will save up to 320 million tons of plastic.
Unfortunately, there are no studies that would clearly show how a company’s reputation impacts its success. While we can establish a link between reputation and performance, there are still companies with a terrible reputation that can boast of excellent results. There are even some that seek to be involved in scandals – for example, Ryanair. Notwithstanding this, there always remains the question as to whether it was its reputation that led to a company’s success, or the other way round, i.e. the company’s good performance influenced its reputation. Still, everywhere, the trend is the same, and as much as 85 percent of the 25,000 companies all over the world surveyed by MSL claim that “nowadays, their mistakes have a much greater impact on their reputation than in the past”. Even in Poland, companies are beginning to understand that it’s much better to prevent than to cure. That’s why, for the last few years now, the Polish PR sector has displayed a double-digit growth rate. The mindset of CEOs is changing too. In the past, a company experiencing a crisis would hire a PR agency to make sure that no one learned about the issue. Now, in the era of social media, hardly anyone still expects that their mistakes will stay completely hidden from the public eye. PR consultants are hired to prevent similar situations from occurring in the future and are free to interfere in a company’s operations to a much larger degree. One of the consequences of the aggressive capitalism of the 90s was that many companies still lack suitable processes that would ensure equal pay and prevent mobbing or sexual harassment. Due to the global popularity of social media today, image crises are often caused by a company’s own employees, who share how they’re treated at work with the world. In Poland – a regional leader with a booming economy, where unemployment continues to drop – evermore demanding customers have started to read back-of-product labels and inquire about a product’s origins. Never did Rockefeller’s adage seem more apt: “Next to doing the right thing, the most important thing is to let people know you are doing the right thing.”