Building a trusted brand: Thinking holistically about reputation risk
As business magnate and investor Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it.”
This is especially true today, as high-profile events such as product recalls, data breaches, counterfeiting, and corporate mismanagement dominate the headlines. In this disruptive environment, protecting your brand reputation and actively managing risk assume strategic importance.
Too often businesses view brand and reputation management as a marketing or public relations activity. The reality is that it is a complex, cross-functional undertaking requiring collaboration between people and functions throughout the enterprise and extended supply chain.
In a market where customers, operations, suppliers, and stakeholders are scattered around the globe, risks can arise from almost anywhere, at any time, and quickly erode both reputation and customer trust. The constant presence of social media has also enabled reputations to be crushed with a few keystrokes. Companies that are prepared to anticipate and mitigate potential threats before they reach crisis levels gain important competitive advantages: the ability to acquire and retain more customers, hire top talent, attract investors, to name a few.
Understanding brand management today
To understand the current state of brand management, UL conducted a global survey of 300 manufacturers and retailers. The research examines how companies view and manage reputation threats and opportunities, including which risks have the most significant impact on reputation—and the most important stakeholders for managing reputation. Some key findings follow.
We found nearly every role or function touches the brand in some way and no single individual or role owns brand management. Rather, companies across segments adopt brand-building practices that cross all departmental lines.
Organizations surveyed involve an average of six roles in brand protection, with marketing and brand teams participating most frequently.
Internal stakeholders in marketing, brand management, and product development are perceived as more instrumental in brand protection than external parties such as industry and government regulators and third-party vendors.
When asked to rate their preparedness to deal with potential brand-threatening scenarios, respondents noted they are least prepared to address counterfeiting and grey market products, but extremely prepared to tackle trademark infringement.
Overall, a surprising 52% of respondents reported experiencing customer relationship issues due to damaged brand equity and 48% suffered lost revenues, which suggests that many companies are not fully aware of evolving risks and how to prevent them.
A stronger brand in nine steps
When managed well, brand and reputation risks can create opportunities to shape perceptions and add value, enabling companies to build on the hard-earned trust they have established with stakeholders. Multifaceted brand building and brand protection activities that span key functions across the enterprise can strengthen organizations’ resilience in the face of global uncertainty.
Companies can no longer afford to ignore brand threats. While it is impossible to be 100 percent protected from reputation risk, factoring in reputation at every stage of corporate decision-making can help brands get ahead of issues, minimize reputation and financial damage and position themselves for growth and long-term success.
Download our simple checklist, which breaks down the brand risk management process into nine actionable steps to help you get started quickly on the path to holistic brand protection.