Reputation, Relationships & Revenue:
Why Businesses Need to Create, Value and Measure Their Reputation
By: Peter Baron, Principal, Carabiner Communications
New Research: Reputation Matters After All: Why Big Companies Are Spending Millions to Improve It and Where Small Companies Can Start
A recent BusinessWeek article, entitled “What Price Reputation?” addressed how an increasing number of large public corporations are measuring and putting more emphasis into how their image and the public’s perception of the company affects their financial value. According to the article, “Reputation is a big reason Johnson & Johnson trades at a much higher price-earnings ratio than Pfizer (PFE), Procter & Gamble (PG) than Unilever (UN), and Exxon Mobil (XOM) than Royal Dutch Shell (RDS).”
While communications strategists have been in business for years to help companies build reputations and manage their image, BusinessWeek cites in the article that for the first time, reputation can be measured in actual dollars. For example, a United Technologies Corp. study conducted by the firm Communications Consulting Worldwide on how public relations affect the company stock prices concluded that 27% can be attributed to intangibles like reputation1.
Is Reputation Important for Smaller Companies?
While many large companies justify investing up to $2 million a year on image research, smaller companies are left to question the correlation between reputation and company value. Public companies have millions at stake and their shares are vulnerable to negative publicity from analysts and reporters alike. Smaller companies that are just getting off the ground or growing fast may not have the luxury of ‘maintaining’ a reputation. However, what this research underlines even for these companies is that PR should be considered a cornerstone of the company’s communications programs and an indispensable component to the business’ ability to thrive. Before a business can measure its reputation, though, first it has to create one.
From the clients I’ve dealt with over the past 20 years, I’ve concluded there are three key ingredients to a company’s reputation:
• How someone feels about doing business with you.
• What someone says about doing business with you when they’re not paid to say it.
• A potential customer’s perception of what it might be like to do business with you.
Build a Reputation by Building Relationships
Small organizations can build a reputation by creating relationships with the people who affect your company’s image – industry analysts, reporters, and industry association leaders, to name a few. These key industry influencers can help build your reputation with a greater number of constituents who could eventually become your customers, partners, and investors.
The Five “I’s” to Relationship Building with Industry Influencers
The actual process of building relationships is based on five steps – starting with identifying opinion leaders and ultimately influencing those leaders who influence your target audiences.
Step 1: Identify influencers – Determining who to reach
When looking at who you should target as an opinion leader, considerations include who they influence, depth and breadth of knowledge they possess in your market, and for analysts, how widely they are quoted in the media. Review top industry analyst firms’ websites to learn which analysts cover your space, what types of reports they publish (and how often), and their overall reach in the market via conference speaking engagements, webinars, teleconference briefings and quotes in the media. With media, target reporters who cover your market space and editors from publications that reach your prospects and customers.
With this information, you should be able to identify the top five to eight analysts and media with whom you should strive to have a relationship.
Step 2: Introduce and inform – Make sure they know you and your company
The first step in the relationship-building process is an introduction. While your company may have an informative website, and is ranked at the top of a Google search on a topic, it is important that you begin a dialogue with the analysts through teleconference briefings to ensure they know you, your company, your position and your vision, instead of relying on content from your website to do the job.
To begin the briefing process, work with your PR firm or marketing department to set up introductory briefings with your targeted analysts. Most analysts’ websites have an online process for setting these up. Not every company’s request for a briefing is accepted, so study the informational requirements and make sure your briefing request content is as compelling as possible. Even if your company is not a paying client of the analyst firm, you stand a good chance of getting a briefing once a year as a non-client if your market and/or competitors are closely tracked by the analysts. As analysts’ schedules tend to get filled up quickly, be prepared to work with 30 – 45 day lead times to get on their calendar.
For media, your plan for getting an introduction should be done with the help of PR experts. As trade media do not usually conduct ‘introductory’ briefings, you’ll need to have a strategy in place for making initial contact with them. Tactics can include a teleconference news briefing, an email response to an article they wrote, or a meeting at a conference.
Step 3: Interact – Watch what they say
Effectively building a relationship with an influencer goes beyond the introductory conversation. You should read analysts’ research and the media’s articles, columns, and blogs and attend speaking engagements or listen to telebriefings when possible. And, conduct two-way communication by responding to what they say – whether you want to indicate your agreement, illuminate the subject by sharing your insights and experience, or just congratulate them on a job well done. Demonstrate that you are reading what they publish.
Step 4: Interface – Keep the dialogue moving
Opinion leaders are bombarded by hundreds of executives like you trying to get on their radar. For that reason, it’s important that you add value to the relationship with frequent, yet not annoying contact.
Opportunities for contact can include:
• An update on company strategy and market successes
• Sharing information such as company research, white papers or customer case studies
• An offer to provide the analyst or reporter with access to a customer willing to speak about their technology deployments, strategies and challenges
• An invitation to a company event at a trade show or conference
• A social invitation for a breakfast or coffee meeting to catch up if you will be in their area
• A response to an article or research that you think would be of interest to them
• An advance briefing on a new product or service
When offering these resources, think like the analyst or media you’re targeting. What information could you use if you were in their position? Maybe that answer is insider-type information, such as market predictions, advance notification (non-disclosure agreement protected) of a new product hitting the market or even what your own company’s plan of attack is for future innovation. If you were going to read their blog or research, what would you find interesting? Once you answer that question, work in reverse to position yourself as the supplier of those key story elements.
Step 5: Influence – Position yourself as a resource
Going back to the principle that there should be value on both sides, the more value you have to offer an analyst or editor, the more likely they are to want to stay in contact with you. Through this relationship-building process, you should ultimately focus on establishing yourself as a valuable source of information and an expert on certain subject matters. By demonstrating market knowledge beyond your company’s immediate offerings and your interest in sharing your knowledge and opinions with influencers, you will be well-positioned to influence the influencers.
Relationships: Making Connections That Count and Tying It Back to Reputation & Revenue
By following the five “I’s” approach to building relationships with opinion leaders, you’re on your way to better understanding who the influencers are, how they can help your company build its reputation among important audiences, and ultimately positively influence the prospects who will become your future customers. When building relationships with influencers, it’s not only who you know, but also what you know that’s important.
And, as larger companies are learning (and smaller businesses can imitate), a company’s conduct and reputation effects the value of the business. While United Technologies Corp’s image may be attributable to almost a third of its stock value, the reputation of a start-up business can make the difference between building value and being in business at all.
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”What Price Reputation?”, Pete Engardio and Michael Arndt, BusinessWeek, July 9, 2007.
About the Author
Peter Baron is founder and principal of Carabiner Communications, a marketing and PR firm serving start-up and high-growth technology companies. With two decades of technology marketing experience, Baron has directed campaigns for such well-known clients as Apple Computer, Ericsson GE, Motorola and IBM. Baron co-founded SocketPR which was acquired by Hill and Knowlton. Prior to founding SocketPR Baron was a partner and VP at Alexander Communications (now OgilvyPR Worldwide), where he oversaw accounts covering cross-platform communications, networking, databases and application development tools. His work spans the formative years of the PC industry, all the way to today’s Internet-driven, wireless and mobile device markets. He can be reached at [email@example.com]firstname.lastname@example.org[/email].