Brand Reputation refers to how a brand of a company is perceived and viewed by customers, stakeholders and the market as a whole. It is the perfection of emotions and ideas that a customer or stakeholder associated with the brand experienced during the purchase of goods and their services while using the product or service and even after sales services provided by the company.
A positive brand reputation builds loyalty and increases the organization’s customer confidence ultimately during sales and bottom line growth. The brand reputation of a company affects the quality of suppliers and credit worthiness of the organization. A company with a good reputation can get higher credit limits and longer credit periods unlike companies with poor reputation who struggle to get credit. A good reputation also plays an important role in helping firms get investment. Investors are likely to invest in companies with good reputation than companies with poor reputation.
COMPLIANCE MANAGEMENT SYSTEM
A company needs a compliance management system to enable them keep good brand reputation.
Compliance is said to be the driving force behind a company’s reputation. This is the process which ensures that a set of people are following a given set of rules set out by the organization. Ensuring compliance can take many forms like policies, procedures, third party audit, documentation etc.
Compliance is now an opportunity for companies to be managed in more efficient and transparent manner. The major scandals some companies have encountered in recent years has mainly occurred due no compliance system at all. This is exactly why compliance programs must target employees and executives who need guidance and assistance in cases of temptation or even extortion.
Compliance is much more than just something that facilitates your business.
Some Compliance Essentials include;
• Compliance is a very important factor that is not deeply understood by most organizations. It is often viewed as a necessary evil that hinders business but compliance is really essential in a company’s success. Having strong compliance officers to make sure regulations are followed is critical to help improve the brand reputation.
• Lack of compliance can cost a company a lot of money in fine and brand damage thereby turning customers away. Customers want to believe their information is protected and that they are doing business with companies practicing ethically and legally.
• Not having an organized compliance management system will cost more in a long run. Compliance is often very complicated especially when dealing with regulations set by multiple countries. It will ensure total visibility at all times.
• Strong compliance can make a business more competitive. Companies need to ensure that the third parties they work with will not get them in trouble. As a third party, being able to demonstrate compliance usually helps to land a deal. Therefore strong compliance slashes business risk due to unvetted partners and can boost revenue streams in new markets as the risk is reduced. This is an advantage over competitors who lack ability to vet third parties well.
Public relation crisis cost time and money to repair and it is exactly the kind of crisis a company will want to avoid that is why a good compliance program is needed. The general public tend to respond positively to businesses that can demonstrate that they take seriously the responsibility of being good coperate citizens. In the hustle of normal day to day operations it is easy to lose sight of the importance of brand reputation and it’s impact on coperate growth. But lack of having a good reputation management and compliance can significantly and negatively impact an organization’s overall success. According to Warren Buffet “ It takes five years to grow your reputation and five minutes to ruin it”.
EXAMPLES OF SOME REPUTATION DISASTERS
With the rise of social media, companies are finding out that one mistake can destroy their brand in seconds unlike before now when it was just traditional advertising and public relations. An example of this was in May 2013, there was a senior Internal Revenue Service Officer Lois Lerner who told reporters that she was “not good at math” as she tried to summon statistics, unfortunately for the official despite her being a lawyer and not an accountant the comment immediately blew up on Twitter. A single ill judged post can bring the company’s reputation into disrepute.
With today’s social and electronic media, unpleasant news about a company is not what customers want to hear or see. Such news captures the attention of customers too frequently leaving a bad impression. Another case is that of Domino’s Pizza Chain where a group of bored Domino’s employees uploaded to YouTube a series of videos in which they played with food ingredients that they claimed were going into meals ordered by customers. The videos went viral quickly picking up more than one million views and the employees faced felony charges. The Executives hoped the controversy would die down and did little to communicate what steps Domino’s was taking to rectify the matter over Twitter. This led the followers and customers to question whether Domino’s was really doing anything about it which led to further discount from consumer and a ruined brand reputation.
Some employees tend to vent on social media or make false statements about a company’s product or service which can hurt reputation in a hurry. A McDonald’s employee in 2013 told his fans that food dropped on the floor is still used. Although McDonald’s refuted the statement but the post was up for hours before any response was made.
Each of the instance damage could have been brought go a minimal level if the organization had a good compliance system which would have made sure of proper online reputation through it’s set rules and procedures set up. The system should create a social media policy specifically for employees that explains what’s appropriate to say about work and what’s not to say on social media and the public at large. It also helps in addressing the concerns of employees which in turn results in harmonious work environment.
Lack of compliance can make customers turn away, that makes it hard for a company to recover it’s reputation because there are few to no customers to vouch for the trust worthiness of the organization.
Compliance management can be done in different departments which includes;
An effective compliance management should be able to help in ensuring raw materials are of standard and from reputable suppliers so as to avoid haphazard production. Raw materials are essential for production, they need to be of good quality.
The organization can monitor and review the timely production of goods and services and rectify issues that may arise as production is on. Thus an effective system can help reduce defects in products thereby resulting in a better brand reputation.
After production of goods it is important that the product reaches the customer in a timely manner without damage on the product while in transit. Hence timely and prompt delivery of products or services to end-customers improves the reputation of the company.
A compliance management system helps track the progress of the employees as they are important stakeholders of the company and compliance brings about a happy work force and also beneficial to the company. Therefore this helps to improve the brand reputation of the company and helps in retaining the best talent. A compliance system should be able to check employees and make sure they have thecompanies interest at heart.
Compliance management is essential for the finance department. It ensures the finance department clears it’s dues towards suppliers in a timely manner. Failure to clear dues on time would likely result in reduction of credit period or tarnish the good reputation of the company especially in respect to loans.
A Compliance Management System reduces the risk of missing a compliance or a due date. Failure to comply with statutes can have ruinous consequences ranging from fines and interest payments to even imprisonment. Once a person initiates legal proceeding against a company, it will severely tarnish the brand’s reputation.
Brand reputation is critical for the success of any company/organization, they should endeavor to use compliance management mechanism to help improve the brand reputation because the market place had become more competitive. Even if a company is not facing brand reputation issues, they should not ignore the benefits of a compliance management and try to have one or it could turn out to be disastrous to the firm in the future.