The majority of business owners have already realized their most important asset is a good reputation. In today’s world, that reputation they are concerned about involves not only the reputation on the street, but also online. The Economist Intelligence Unit has found that as much as 75 percent of a company’s bottom line value is tied up in its reputation. When a firm’s name gets tarnished, the stock market value or street value of that firm takes a major hit, and the first thing affected is the income stream and revenues take a big hit.
In today’s business environment, 80 percent of consumers use the Web to research companies and products before buying, and 75 percent of those same consumers make decisions on what they see online. If a disgruntled customer is slandering your business online, customers won’t take the time to go the next step and find out your side of the story. They will just do business with your competitors instead!
I have heard people say there are two types of reputation insurance that matters. The first is informal, i.e. making sure your digital reputations are rock-solid, and using tools like Facebook, LinkedIn and Twitter to make sure everyone knows what your firm is about, what your work ethics are about and how to contact you. The second is formal reputation insurance. A large segment of organizations have been purchasing a dedicated reputation insurance product, similar to the way they buy errors and omissions insurance. While not very common right now, it’s going to be more important in the future.
Online reputation management is a new way to help your online information by providing you with the tools to organize and understand how your personal information is handled online. Your name is everything, and taking control of your online reputation helps protect not only your privacy but your personal and business reputation.
One person I spoke with made this comment: “The best way for a company to protect its reputation is to deserve and earn a good reputation!” Well said, but today is a different world. Massive efforts need to be undertaken to protect yourself, and with the advent of social Media, a business could be in trouble overnight. Insurance is a classic way of hedging this problem and is becoming more important every day. A survey was done of 551 different CEOs from all different organizations, and when asked which business risks were their most important, “reputation management” was only outdone by major issues like the economic slowdown and major regulatory changes. Negative information about a business, any business, can shut you down, or at least, modify an already tough bottom line in our economy.
Crisis management is very difficult and can be very one-sided. After a reputation crisis, damage has most certainly already been done to your business, and now you need to figure out the best plan of attack to prevent more damage from being done. In such circumstances, reputation management professionals are brought in to stop the crisis as fast as possible. But can anything move faster than a rant from a dissatisfied customer who puts it on YouTube and it goes viral? Social media is changing the world right now, mostly for the good, but when it’s against you or your firm, it’s often times worst-case scenario. Unfortunately, when a business takes this kind of hit, it sometimes never overcomes it, and that’s a good reason why you should look into reputation management Insurance. The earlier you look into and develop a reputation management strategy the better, and at least consider whether an insurance program covering this risk is the answer. If it is, there are many providers already out there, and as is usually the case, the more often the business community feels a need for insurance protection, the bigger the insurance market becomes to take on that risk.
Insurance is a part of everyday life. For most of us, it is a requirement that allows us to sleep peacefully at night, knowing that your family and its possessions are protected. For many business owners, reputation insurance is a new concept … but then again, so was ID theft several years ago. Considering all the steps we mandate that our employees navigate to protect passwords, prevent ID theft, and guard customer information, then the time has come to go the next step and look into reputation management Insurance. It’s only one form of insurance protection a business owner needs to look into, and you can find several name brand companies offering consulting services to prevent a crisis, especially regarding your on line presence. Look into this valuable type of insurance protection before you really need it!
Larry Heuer is president of Heuer Insurance Agency in Sparks. Contact him at 358-5554 or though www.heuerinsurance.com.
