Why Should Business Owners and Managers Really Care About Reputation?

Reputation is more than just a nice-to-have—it’s a powerful asset that can make or break a business. So why should business owners and managers really care? Let’s break it down.

Reputation as a Risk Factor

A strong reputation takes years to build but can be destroyed in minutes. According to a 2023 Deloitte survey, 87% of executives consider reputation to be one of the biggest risks to their business. A damaged reputation can cause customers to leave, investors to pull back, and sales to drop. Just think about the many public relations crises in recent years—once trust is lost, it’s incredibly hard to regain.

For example, after high-profile data breaches, many companies saw customer trust plummet and had to invest heavily in damage control. Not to mention the legal and financial costs that follow. Once the damage is done, rebuilding trust requires time, transparency, and significant effort.

Reputation as a Revenue Booster

But here’s the flip side: a strong reputation is a massive revenue driver. It’s not just about avoiding risk—it’s about capitalizing on growth. A Harvard Business Review study found that companies with a strong reputation can charge up to 13% more for their products or services. Customers are willing to pay more for a brand they trust.

Reputation also attracts the best talent. People want to work for respected companies. Investors, too, are more likely to back a business that maintains a good standing in the market. This creates a ripple effect—positive word of mouth, strong partnerships, and sustainable growth.

Reputation and the Digital World

In today’s world, reputation management is more important than ever. The rise of social media and online reviews means news—good or bad—spreads fast. One negative comment or review can snowball, putting your reputation at risk almost overnight.

It’s no longer enough to deliver great products or services. Companies need to actively manage their reputation, engage with their customers, and respond to feedback quickly. Ignoring this can be costly. A study by Weber Shandwickshowed that 59% of a company’s market value is directly tied to its reputation.

The Connection to Leadership

Great leadership and strong communication are the backbone of a good reputation. How a company handles internal challenges, treats employees, and engages with stakeholders all contribute to its public image. Customers and employees want transparency. They value companies that align with their values and act with integrity.

When leaders communicate clearly and stay true to their brand’s values, they create a culture of trust—both internally and externally. This trust supports business through crises and strengthens the company’s long-term position.

Reputation in Banking and Asset Management

In sectors like banking and asset management, reputation is critical. Trust is the foundation of any financial relationship. When clients invest their money, they rely on a firm’s reputation for reliability, security, and performance. Any misstep—such as a compliance issue, a public scandal, or even poor financial advice—can erode that trust.

For example, after the 2008 financial crisis, banks with strong reputations were able to recover faster and retain more clients than those with a tarnished image. Asset management firms, in particular, thrive on their ability to maintain transparency and consistent performance. Clients are more likely to stick with a firm that they trust, even during market downturns.

According to a 2022 PwC report, 91% of banking executives believe that reputation is one of their greatest assets. Additionally, with the rise of ESG (Environmental, Social, and Governance) investing, a firm’s reputation in terms of ethical standards and sustainability is now just as important as its financial returns.

In banking and asset management, reputation management isn’t just about branding—it’s a critical component of client retention, investment, and long-term business success.

So, Why Care About Reputation?

Reputation affects every aspect of your business. It protects you from risk and boosts revenue, all while strengthening your relationships with customers, employees, and investors. In a world where information moves faster than ever, managing and safeguarding your reputation is essential for business success.

The bottom line: a good reputation isn’t just a shield against risk—it’s a competitive advantage that can drive growth and profitability.

Interested in learning more about Reputation Management? Please let me know: carsten.boehme@trencavel-cie.com