The Relationship between Reputation and Brand

Brand and Reputation are often confused and taken one for the other. But, mistaking it to be the same can become scandalous and extremely costly at times. So, before we discuss the relationship between the two, let's understand what brand and reputation mean separately.

What is a Brand?

A brand is how your customers recognize and experience your business when they purchase the product or service from you. In other words, it is the customer's perspective of your company values, service style, and worth of their purchase.

What is Reputation?

A company's reputation is all about public opinion, including the employees, investors, journalists, regulators, local communities, and customers.

To summarize, a brand becomes customer-centric while reputation becomes company-centric.

A brand is about significance concerning the customer, and reputation is about the lawful genuineness of the organization concerning a broader umbrella of people, which is not limited to the customers.

The Relationship

"I don't know why you are. I don't know your company. I don't know your company's product. I don't know what your company stands for. I don't know your company's customers. I don't know your company's record. I don't know your company's reputation. Now, what was it you wanted to sell me?" - McGraw-Hill

The above quote by McGraw-Hill is from one of the famous advertisements. He stresses how a company's reputation becomes an essential requirement in selling its product or service. The journey of selling a product starts way before the salesperson calls the potential customer. To make sure you do well in the market, the brand of your product/service needs to be known, loved, and build trust among the customers. In other words, you need to have a flawless reputation for attracting the target audience.

A brand with an excellent reputation in the market gets a broader customer base which enhances the value of its products and services. Whereas a bad reputation not only brings a decline in the customer base, it also devalues the products and services of the brand.

How brand strength helps in building a reputation?

Brand Strength can be built by three simple metrics: knowledge, preference, and financial aspect of your product or service.

1) Knowledge

Knowledge here refers to Brand Awareness in the market. The customer, when hears the name of your company, should be able to immediately picture your company logo, products, and services in their mind. It isn't easy to reach the target audience quickly, but you can build your brand value with the correct marketing tools.

Once the customer is aware of your company and its products, reputation comes into the picture, which becomes the primary factor for purchasing your product. In today's digital world, a consumer reads the product or service reviews before buying it. Hence, how the company is perceived in the market is necessary to sell the product or service.

2) Preference

The preference here refers to Customer Loyalty towards your product or service. The market is packed with alternatives; we need to focus on brand experience to gain a recurrent customer base. Customer service plays a significant role in preference metrics. If a customer had a fantastic experience with your brand, he is likely to stay longer, whereas if the customer had an awful experience, he might choose other alternatives.

Customer Loyalty isn't a one-time job. A company needs to keep on improving customer experience. The better the customer experience, the stronger the reputation. The worse the customer experience, the weaker the reputation. As today's consumers are aware purchasers, anything goes wrong, and reputation is affected on social media. Once doubts are placed in the minds of your potential customers, the sales go down. Hence, the business gets involved on a monetary level.

3) Financial

Financial here refers to the price of premium a brand commands, market shares, the revenue generation capabilities of a brand, the transaction value, the lifetime value of a brand, and the rate at which brands sustain growth.

Brand and Reputation are connected financially, even much minutely. If brand admiration among the customers goes down, it subsequently affects the sales. If the company's reputation is in controversy for whatsoever reason, the stock market reflects the monetary loss. Hence, to safeguard the financial aspects of the business, reputation and brand need to be given equal attention.

To conclude, Brand and Reputation are not only different, but they affect the business distinctly. Therefore, many companies chose to keep the brand in a separate company division. So, if one brand of a company is affected the whole company's reputation is not at stake. Although reputation and brand aren't the same, they are nevertheless are related. Damage to one can quickly weaken the other. And both are crucial but in different ways.

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Sanna