(BadNewsHandbook.com) -- Brand and reputation. It’s a critical distinction that drives a company’s ability to minimize the impact of its next public relations crisis.
Brand is how your company talks to the world.
Reputation is how the world hears your company.
Some people say reputation and brand mean the same thing. But that’s like saying the pitch and the swing are the same because they’re part of the same baseball game.
Closely related, but very different.
Reputation risk management is a paradox. On one hand the company's reputation is its most important asset. On the other hand it is the asset most vulnerable to damage by conditions largely out of the company’s control.
A brand is a promise, but more than just deliverables. It’s what the brand’s owner needs people and institutions that matter to believe to be true.
Reputation, on the other hand, is what stakeholders and influencers actually believe. It's a mix of personal experiences and influences, all weighed against motivations that drive every decision to trust a brand, buy a product or support an idea:
- Will I get more out of it than I put in?
- Will it give me added value by being faster, less expensive or better?
- Does it fit with my affinities, ethics and standards?
- Does it provide me a sense of confidence and safety?
The wider the gap between a company's brand and reputation, the more potentially damaging a controversy or crisis.
But the more a corporate and brand reputation jive with what stakeholders want to believe, the stronger the company’s ability to navigate and even prosper through bad markets, complex public issues and crisis events. It’s no wonder that companies with solidly good reputations have market caps of 30 to 70 percent more than their book value.
Illustration courtesy Huffington Post.