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How a bad reputation can harm your business

Your reputation is a key business asset. It might be impossible to quantify on a balance sheet, but if you do not manage it effectively you will see the impact on your profit and loss. Businesses that have successfully built a five-star brand and use online reputation services to manage it will attest to its power, they can rely on finding new customers from people who have heard about them and want to try them out. But what about when a reputation isn’t so good?

Unfortunately, having a poor reputation doesn’t just mean you don’t attract new customers, a bad reputation risks serious harm to your business.

People share bad news

It’s a well-known, if sad, fact that people are wired to share bad news. And there are plenty of statistics attesting to this. It’s estimated that a customer affected by bad service will tell up to fifteen people about it. And that it takes about twelve positive experiences to compensate for the damage done by that negative experience.

This means it’s critical to have effective measures in place not just to manage complaints and bad reviews, but also to ensure that people are sharing their good experiences, too.

People check reviews

It’s estimated that about nine out of ten people will check reviews before making a purchase. And while people have always researched, modern technology means it’s easy to check on even the smallest purchase with a quick search on a smartphone.


And those reviews will have a powerful effect. The difference between a five-star brand and anything else can be huge. Even a minor drop in reputation can have a considerable impact in some sectors; one study even found that people were six times more likely to pay for something with five stars than with ‘only’ 4.8 stars.

A bad reputation risks morale

It’s not just your customers that pay attention to your reputation, it’s your staff too. And a bad reputation risks leaving staff feeling disaffected. When a business has a great reputation, people are proud to work for it, it might even become an important part of their life. But when they know they work for a business that isn’t respected, it can affect their attitude.

It might mean they are less attentive at work, or that staff turnover increases because people are not motivated to stay. Either way, it will impact your service and your reputation.

The self-fulfilling dangers of a bad reputation

Putting all these together, it’s easy to see how a bad reputation can mean the end for a business. Because people are sharing negative stories, the reputation becomes tarnished. Because the reputation is tarnished, fewer people buy the business’s products or services. And because the business is not well-respected, staff are disenchanted and frequently leaving.

With less money coming in, and inexperienced staff, it becomes harder to turn things around, compounding the negative reputation and, potentially, fatally wounding the business.

The good news is that it is possible to manage your reputation. Our online reputation services have helped many local businesses build and maintain their five-star brand. By actively managing negative reviews, and helping promote positive reviews, they have avoided the risks of a bad reputation and seen the difference a great reputation can make to their bottom line.

If you want to find out how you can have a five-star brand, call or email us today, so we can help you ensure you have a reputation that customers will reward.

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