Reputation management is now key to a brand’s success

fansWith the modern media environment dominated by the internet, a brand can, in real time, stand or fall on its public reputation with consumers

Take two very different marketing stories from the past few weeks. “We hate Setanta!” chanted the England football fans in Zagreb, in response to fans at home not being able to witness the victory against Croatia unless they had access to the digital sports channel Setanta. Then a week later a tabloid headline screamed “Hellifax” as share prices of its owner HBOS plummeted. By the end of that week, Setanta had concluded a TV highlights deal with ITV for the rest of the World Cup qualifying campaign, and Halifax had fallen to a takeover from Lloyds TSB – 72 hours that changed the reputations (and business fortunes) of both these companies forever.

At the same time, the huge brand impact of the financial crisis was highlighted in last week’s Brand Finance report, which suggested £36.1bn-worth ($67bn) of value has been lost from the world’s top 100 brands in the past few months.

All these cases demonstrate how, in the modern media environment, your brand’s success stands or falls in real time on your public reputation with your consumer.

We all know the web is changing the ability of brand owners to control how their product is perceived, but this change is bringing a new discipline to conventional marketing wisdom – reputation management.

It used to be the case that the brand owner controlled brand equity. In traditional marketing theory, the four Ps (packaging, pricing, promotions, placement) were the key variables for the brand team to manage.

And although, more recently, the growth in retailer power and the fragmentation of media put more emphasis on distribution and media choice, the brand manager still pulled all the levers to shape brand equity. Consumers then responded to those marketing decisions. In this business model, the brand manager was king and the corporate communications or external affairs functions were sidelined from the main marketing action.

In financial terms, this investment in the brand was building an intangible asset on the balance sheet. So much so, that brand valuation became a fashionable concept. In simple terms, if you took the market capitalisation of a company and then subtracted the fixed assets, the difference – the intangible assets – was the value of the brand.

That was not to say that marketers always got this right. Poor strategic choices could often mean that the brand equity actually built with consumers did not match what you might have wanted to build. Or poor execution often meant there was a shortfall between the brand equity you wanted to build with consumers and what was actually delivered.

But disappointing consumers was a private affair. There was no immediate impact on share prices. You might see it all reflected, over time, behind closed doors in the ebb and flow of monthly market share, but not in the rapid pace and change of a public consumer movement, which now achieves critical mass and momentum via the web.

This is the critical change for today’s marketers. There are three truths about consumer communication in the internet age – it’s transparent, it’s fast and it’s global. So, your whole user base has a public vote and a public say on your reputation from which there’s no hiding.

So, if brand equity is about building your assets, brand reputation is about protecting your liabilities. One remains in your gift, driven by the marketing decisions you take every day, but the other now belongs to your consumer – so you need to manage it proactively and forcefully like never before. Doing so requires great care, unless you want the terraces to chant against your brand, a run on your bank or consumers to switch from your product to a competitor. v Andrew Harrison is chief executive of the RadioCentre. You can contact Andrew at


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