Reputation Management & Marketing

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Reputation Management & Marketing

The reputation marketing field has evolved from the marriage of the fields reputation management and brand marketing, and involves a brand’s reputation being vetted online in real-time by consumers leaving online reviews and citing experiences on social networking sites. With the popularity of social media in the new millennium reputation, vetting has turned from word-of-mouth to the digital platform, forcing businesses to take active measures to stay competitive and profitable.

A study done by Neilsen in 2012 suggests that 70% of consumers trust online reviews (15% more than in 2008), second only to personal recommendations.[1] This gives credibility to the social proof theory; most famously studied by Muzafer Sherif, and highlighted as one of the six principles of persuasion by Robert Cialdini. The increasing number of review websites such as Yelp and ConsumerAffairs attracted the attention of Harvard Business School which conducted a study of online reviews and their effects on restaurants. The study finds that a one-star increase in Yelp rating leads to a 5–7% increase in restaurant revenue having a major impact on local restaurants and a lesser impact on big chains[2] A similar study conducted at UC Berkeley reports that a half-star improvement on a five star rating could make it 30-49% more likely that a restaurant will sell out its evening seats.[3]

Reputation marketing is often associated with reputation management and is seen as a means of handling negative reviews. However, reputation marketing differs in that it also seeks to manage positive feedback as a way to attract new customers.[4] Reputation marketing is not a new strategy. The Better Business Bureau has been around since 1912 and is one of the most notable and well-known consumer review organizations.[5] With the surplus of social media review sites available to the average consumer, businesses are forced to closely monitor their reputations and find new and creative ways to use social media to stay competitive in today’s economy.

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