A company’s reputation tends to be synonymous with the trust that organization receives from its customers, investors, employees, and regulators. These key stakeholders base their expectations of a company’s future behavior on their perceptions of previous statements and actions. Because of this, a negative reputation can severely harm a company’s potential bottom line and growth.
People prefer to do business with companies they can trust and who value their business. If they do not feel this foundation of trust or value, customers are likely to move to competitors, investors may disinvest, and employees may begin to seek work elsewhere. This results in a hard-hitting loss for the company from all angles.
The dilemma with National Grid’s gas meters is a great, yet unfortunate example of the impact of a negative reputation. Allegedly, National Grid’s gas meters were inaccurate, resulting in millions of customers overpaying for their electricity. In turn, this gave customers, as well as the general public, the impression that utilities give higher priority to profits than to people. Although marketing efforts aimed to portray a positive mission geared towards low prices and customer care, this damaged reputation has proven difficult for National Grid to repair.
In addition to hindering a company’s revenue, a negative reputation also hurts the hiring success for a company. Job candidates are much more likely to want to work for a company with a good reputation. Companies with negative reputations tend to have difficulty keeping business. This does not fare well for an employee’s job security, not to mention, employees want the peace of mind that comes with being able to trust their employer.
A company’s reputation is developed and sustained by the perceptions of what it says and does; the alignment of these two factors is the key to promoting trust in an organization. This is of utmost importance because this is the context which stakeholders base their decisions upon whether to purchase service, a product, or seek employment. A negative reputation cultivates a reduced potential for engagement with stakeholders, therefore, companies should continuously strive to engage their stakeholders by nurturing a relationship built on trust. If you are seeking further information on fostering positive reputation management in the energy sector, contact FootBridge Energy today!