The numbers say it all: reputation is fundamental for your company, a strategic asset able to guide your business.

We have already described what corporate reputation is and why it is important to know it, monitor it, and possibly fix it. The corporate reputation, again, can be considered as a management tool that can be used to create value even though this idea is quite novel. 

We are used to classifying the corporate reputation under the company’s intangible assets, together with our brand, patents, and human capital. If these assets are easily quantified, besides under normal consideration by insiders, this is not the case for reputation.

The corporate reputation quite often appears intangible, slippery; true characteristics that do not have to appear superfluous.

Let’s see why, starting from the data that answer the question:How much is reputation worth and how big of an impact could a bad corporate reputation have on your business?

According to data from the Reputation Institute, 64% of Italians buy products from companies that have a good reputation, while only 25% remain neutral to the brand name.

The effect of this inclination or aversion from the customer translates, of course, to an effective economic return in terms of product positioning on the market; the number of people who will choose a product that has a poor reputation will be a minor percentage compared to whom will be inclined to follow a good reputation brand.

What’s the effect? Companies with bad reputations will be ranked in lower position in terms of revenue, compared to companies that have invested in a strategy to protect their reputation.

Better reputation = greater revenues

Research conducted by Mediobanca and Cineas¹ has also proved that protecting corporate reputation gives not only tangible, but also measurable and very effective returns since it can generate a 10% investment return.

Has been shown that 10 of the best recommended Italian companies have a 4-fold return compared to less recommended companies. 


Reputation of a brand strongly influences customer to choose that particular product (or service) rather than another one.

In particular if a brand:

    • has a very good reputation (e.g. Ferrero) 70% of customers will be inclined to prefer that brand compared to all other competitors and to recommend others to buy that (e.g. review, word of mouth)
    • does not have a good reputation, only 25% of customers will be willing to choose it despite that.

Specifically, considering the  2019 Global RepTrak by the Reputation Institute, 52% of customers throughout the world are “Fence Sitters”, that is people that are insecure or neutral in supporting a brand or another one; therefore, they are less inclined to give companies the benefit of the doubt in case of selection and/or reputational damage.

How customers decide to bu

Turn Fence Sitters in brand supporters requires hard work on reputation, and the Reputation Institute draws up a list of the fundamental aspects to analyze and improve in order to increase reputation.

1) Brand

Companies that work on their brand image, by talking about themselves and explaining why and how they do their job, have a bigger impact in terms of reputation compared to brands that only offer their product/service.

2) Corporate responsibility

Companies that proved to care about the context in which they are located – from society to institutions, to environment – generally enjoy a good reputation. Transparency, respect, integrity are characteristics that are rewarded even by Fence Sitters.

3) Strong leadership

CEOs play a fundamental role in standing and reputation of the company. A CEO that “puts his own name on it” and collects huge consents from his way to introduce himself to the market, by inference, will give the same good reputation to the company he represents (e.g. Renzo Rosso for Diesel).
4) Communication
A company that communicates, in a unique and genuine way its values, its goals, its internal policies and the information about itself is perceived as a reliable and high-quality brand by the majority of customers.
5) The human aspect
A crucial aspect for Fence Sitters is the human aspect of the brand: both regarding human resources management and by how much humanity a company aims in the world. A company that proves to be blunt, sensitive, involved in social and humanitarian issues gets a significant improvement of the brand reputation.
6) Ambassadors’ reputation
In times of marketing 4.0, sales on social networks and brand identity across multiple business platforms, the importance of becoming affiliated to the right person that will become “ambassador” of the brand is fundamental. They are called influencers because they influence indeed a market segment not so small, considering that quite often these public figures have millions of followers.

It is evident that if there are millions of followers, everything published with these celebrities will have a big user base, bigger than the audience in first prime time. Moreover, it is clear that if you rely on the influencer marketing (paying an influencer to sponsor the brand on their social network) the service or product you commercialize will undergo a reputation positive or negative according to the celebrity that speaks for it.

Implementing a risk management strategy is fundamental

Corporate reputation is something you create and spread online; it is the result of a word of mouth to the nth degree, on a global scale.

This results in a reputation that becomes a voice of a wider and wider audience, weather because the ease to get information and updates or because of the increase of the purchasing power. These circumstances will give a great impact on the company accounts. 

Reputation, again, is a strategic asset for the company because, if properly supported, produce effective gain, while if unsupported (or mismanaged) is a huge risk for the company.

It is fundamental – especially for the bigger companies – to protect and maintain a positive corporate reputation by using a risk-based management.

In order to do that, first of all, it is necessary to listen and measure the present reputation and then coming up with a plan that allows, even through internal organizational changes, to increase reputation; all this for the purpose to grow revenue.

For a world leader it is fundamental to consider very carefully building and protecting the reputational capital, in order to include this important asset in strategic planning because…

People don’t buy a product/service anymore, they buy its reputation.

For information on the reputational risk for your company and to assess a risk management strategy together, contact us. An expert will be at your disposal.

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