Think about the salesman going door to door. He initially gets inside the house because of the vacuum cleaner he’s selling. But ultimately, why he makes the sale is his personality. How he interacts with the housewife (in those days) is what closed the deal for him. Maybe he shares a trick for making coffee or an ironing tip, whatever, he shares content with her to create a bond and that builds a relationship.
The vacuum cleaner got him in the door but his personality is what makes the sale.
Likewise in social media, the product might get us to the company’s Facebook site, but the personality exhibited on the site, is why we choose to continually support the company.
In other words, consumer focus has shifted from your product, to who you are as a company. Your company has become the traveling salesman and your social media presence now needs the face 2 face selling skills from the good old days to close the deal and gain a regular customer.
According to a client of mine, Reputation Institute, 56% of consumers’ purchase intent is driven by their perceptions of your company. In other words, businesses nowadays need to focus more on building, telling and most importantly, living their corporate story. Consider it your company’s new sales schtick.
Would you buy a used car from this man?
Here are some facts: 64% of respondents in #Reputation Institute studies say that they would buy products from a company with a great reputation versus only 16% from one with a poor reputation. Likewise, 59% would recommend a product from a well-reputed company versus only 13% from a company with a poor reputation.
I bet if you polled housewives back in the 50-60’s, the percentages would be similar when evaluating traveling salesman’s success rate. Guys with sincere charm sell more.
Your corporate reputation matters. The way you run your company matters. Customers want to know who is behind the product that they are buying. Prospective employees want to work for you because of the way you run your company.
According to RI studies, over a six year period, companies with good reputations outperformed the market average in terms of share price by 40%. These same companies also boasted superior performance in terms of financial metrics such as Return on Equity, Return on Assets, Price/Earnings ratio, Market/Book ratio and EBITDA.
RI has coined the phrase - we are living in a reputation economy. According to the numbers, I would say that this is no catchphrase but a reality. Increasingly companies need to do more than just sell their products and services. They need to sell themselves as companies. In short, be trusted and liked as an organization and you will sell more products, become a more attractive workplace and most likely, a preferred investment.
Companies that listen to their stakeholders and adapt in order to be relevant - not just in terms of their communications but in how they act as well - will be the future winners.
I guess you can say that that is reputation management in a nutshell: the understanding of your stakeholders’ expectations and the integration of this awareness into the way you do business.
Obviously your product still, and will always, matter. If it doesn’t work you are in trouble. But your company’s good reputation will add value to your business and your bottom line.
Think Microsoft: this year’s #1 company for CSR according to RI research. Microsoft reported revenue of $73.7 billion in 2012, an increase of $3.76 billion from the previous year.
There will always be examples of companies with good reputations that stay successful despite product callbacks and governance issues. That’s because, who you are matters more than what you sell.
Ask yourself: How much do you spend on creating and promoting your products and services rather than understanding and addressing the expectations of your stakeholders?
Going back to the traveling salesman analogy, substitute “company” for “man” in this quote from Death of a Salesman,”The man who creates personal interest, is the man who gets ahead. Be liked and you will never want.”
Willy Loman was way ahead of his time.
