Reputation and brand, chicken and egg
Brand and reputation are often confused. But one is more important than the other for long-term success. Understand this and you can prime your business for the future.
Brand is the unique combination of ‘identifying features’ that distinguish your company from another. Reputation is much more complicated. You can’t see it or hold it or hear it. It is written between the lines. It is the overall experience of what you sell, the multiple touchpoints from sales to usage, service to satisfaction. Reputation is your customer's evaluation of your company over time.
A strong brand delivers immeasurable value. You’ll instantly recognise the sports brand with a tick or the burger chain’s golden arches. You don’t need the namecheck to know who we are talking about. That recognition ensures customers lace up their Nikes and order a Big Mac.
But the customer experience, service and perception of product quality is what your reputation is built upon.
You probably haven’t heard of ARM Holdings but you use their products every day. They are Britain’s most successful tech company you’ve never seen. Their processing chips are at the heart of your Samsung Galaxy, your iPhone, your television, your cars, even part of the smart infrastructure for cities. They trade, not on brand recognition, but a reputation forged through expertise, performance quality and subsequent product satisfaction.
If brand is the egg, reputation is the chicken. Let’s say you start with your brand, but your reputation lasts longer, delivers more value, makes more noise, takes time to tame.
One matters more. Your brand will deliver customers through the door, customers will return based on your reputation. Customer loyalty, and the implied higher customer retention rate, is far more cost-effective than relying on new customers. The loyal customer rules the roost.
Ask Gerald Ratner, one speech at an Institute of Directors dinner, and the Ratners Group lost its hard-won brand and reputation. Fast forward 27 years, Facebook has yet to regain customer trust since Mark Zuckerberg’s testimony to congress. Both Ratner and Zuckerberg underestimated the power of reputation.
Brand enables business today, but reputation drives customer loyalty and company growth tomorrow. Invest wisely.