Reputation Management in the Digital Age

Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Why is reputation so important? A good reputation is what keeps customers coming through the door. A bad reputation, on the other hand, can cause deep damage to — or even the complete collapse of — a brand. Think of Chi-Chi’s, the once-popular Mexican restaurant chain, which according to Journal Timesfinally folded in North America in 2004 after a hepatitis A outbreak caused by contaminated salsa and lack of trust in the brand that ultimately toppled it.

Most organizations are well aware they are not immune, it’s no surprise that they are preoccupied with protecting their image. According to TripAdvisor, it’s such an essential part of brand management these days that more than 90 percent of hoteliers say it’s key to the future success of their business.

We’ve staked out November as Reputation Management Month here at Benbria. This blog covers what reputation management is, why it’s important, and what hoteliers can do to protect the public’s trust. We get into the history of reputation management and how it came to be what it is today.

A Brief History of Reputation Management

When we talk about reputation management today, we generally speak of online reviews and people’s commentary about brands. For most of us, the term is now almost inextricably intertwined with the internet and online activity.

But that wasn’t always the case. Since the dawn of modern capitalism, business and reputation management have always gone hand in hand; once upon a time, reputation management was synonymous with public relations. The Public Relations Society of America defines PR as “a strategic communication process that builds mutually beneficial relationships between organizations and their publics.”

Public relations was about controlling the flow of information between a brand and the public. The whole idea behind public relations was to get publicity for free rather than having to pay for ads. It was about pre-emptively shaping the brand’s image in the eyes of the public with the assistance of the media.

It was also about issuing an official, public response whenever something occurred that painted the brand in a negative light. The thing about public relations is that it was never really a dialogue between the brand and public. Information tended to flow in one direction, and brands didn’t have to worry much about what individuals were saying about them.

How the Digital Age Changed Reputation Management

As the internet became a mainstream, brands found themselves face-to-face with a new problem: individuals could now communicate with hundreds of people instantly. Websites such as TripAdvisor and Yelp cropped up, enabling individuals to broadcast opinions about businesses to anyone who would listen. And in the ensuing years, the public certainly has listened — TripAdvisor now receives more than 350 million unique visitors every month.

Even though public relations remains a central part of most corporations’ marketing departments — reputation management became about minimizing the influence of negative online reviews on potential customers. Brands do this by monitoring social media, review websites, and blogs to see what others are saying. Then taking action to minimize its effects on people who may be reading.

Today, reputation management is vital to the survival of brands. Some posit that online reviews and word-of-mouth recommendations are now more valuable than traditional forms of advertising. Nielsen found that 92 percent of consumers are more receptive to recommendations from their friends and family than they are of all other forms of advertising.

How Travelers Use Online Reviews

Besides word of mouth recommendations from friends and family, online reviews play a role in how travelers choose where to stay. After price and location, it is perhaps the most important factor in the decision-making process, according to TripAdvisor research. More than half of guests will not book at a location unless it has reviews, either.

In short, travelers want to see what others are saying even if it’s sometimes unflattering to the hotel. Indeed, there is evidence from Econsultancy that some negative reviews can be beneficial — 68 percent of travelers trust reviews more when they are a mix of positive and negative. This is because there is no such thing as perfection, and can forgive a hotel that slips up.

What travelers look for when they visit a review website is more complex than simply positive reviews. They also analyze the negatives, weigh the balance between positive and negative, and assess the volume and tone of reviews.

Why Hotels Must Take Reputation Management Seriously

Hoteliers must not underestimate the impact that online reviews have on their guests. Nor should they underestimate the power of their own response to a negative review.

According to TripAdvisor, 78 percent of visitors say that seeing management’s responses gives them a favorable impression of the hotel, as it shows they care about their guests. Additionally, the same TripAdvisor report states that more than half of visitors ignore extremely scathing reviews.

This is why it is absolutely crucial that hotels invest in online reputation management. This includes: social tracking, dedicated staff members to monitoring social media and review sites, and promptly responding to negative comments. When a hotel responds to a dissatisfied guest, it shows them it cares about their experience. In addition it shows potential guests the hotel is prepared to take responsibility for the issue, but also to resolve them.

Furthermore, research from the Cornell School of Hotel Administration discovered that for every one-point star increase a hotel receives on review websites, they can raise room prices by 11.2 percent without suffering a loss of market share. There is a tangible financial incentive for encouraging positive reviews.

Here at Benbria, we help hospitality brands manage their reputations using our mobile guest engagement solution. Our technology provides the tools to proactively master reputation management by communicating with their guests and resolving issues. For more tips, advice, and information on reputation management, we’ve written a few articles that might interest you:

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