A Good Reputation – How Can it Benefit Your Business
As part of a small
business you know how important it is to
look after your customers, and new research
demonstrates that keeping a good reputation
can have significant benefit on your sales.
The Confederation of
British Industry (CBI) has found that well
over half of consumers will pay a premium to
the company they believe has the best
reputation, even if they can buy the same
product or service cheaper elsewhere.
Excellent customer
service was cited by almost half of all
survey respondents (48%) as the
characteristic that most helps a firm build
its reputation. Another third (36%) said
that products and services always living up
to expectations mattered most. Seven per
cent said a good reputation was down to
being a good employer while four per cent
attributed it to brand appeal.
Among the 58% of consumers willing to pay more to their most highly
regarded company, 43% would pay up to five
per cent over and above a cheaper price,
almost a third (29%) are happy to pay six to
ten per cent more, while a one in six (16%)
would pay more than a ten per cent premium.
Commenting on the
findings, Richard Lambert, the CBI’s
Director-General, said: "What comes through
in our survey is that great reputations rest
or fall on delivery. Whether the promise is
of quality, fun, value or luxury, the 21st
century customer is savvy enough to sniff
out and avoid the shoddy or disappointing.
Environmental credentials and social
responsibility are also becoming
increasingly more important to consumers'
purchasing decisions.
Poor customer service
was thought by two in five of respondents to
the YouGov survey (42%) to most damage a
good reputation and a third (30%) said that
products not living up to expectation were
most to blame. Scandals, such as fraud or
criminal acts were considered by 17 per cent
to be the most important factor. Only seven
per cent said big payments to executives did
the most damage.”
For a distrusted company to rebuild its reputation, 45 per cent of
consumers said the best thing for it to do
is come clean and publicly apologise. A
further third (28%) believed a company’s
best policy was to compensate customers,
while 11 per cent said a change of
management was required. Eight per cent
would be most persuaded to change their view
after reading positive stories in the press.
Mr Lambert concluded: "It is clear that companies can never be
complacent. A great reputation takes a
lifetime to build and seconds to lose. But
the picture painted by our survey and report
shows encouraging signs for businesses
willing to go the extra mile and
demonstrates that a good quality reputation
is worth its weight in gold."
| 
