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August Guest Blog: Manage Reputation Risk with Purpose in the Age of Accountability

Written By: Bob Osmond, President, and Ashutosh Vats, Research and Insights Associate, Racepoint Global 

Manage Reputation Risk with Purpose in A New Age of Accountability

The world of marketing and communications is complex. One challenge is the lack of a consistent and common language for the jobs to be done within the marketing mix.

For example, “brand” and “reputation” are often muddied and used interchangeably. The current cultural and business environment requires that companies get clear about the difference—and take the necessary steps to close any gaps.

 Brand v. Reputation

Brand and reputation are multidimensional and work together to create understanding and perception about a company. For the sake of simplicity, brand is a promise to customers, whereas reputation is a combination of judgments and perceptions about how well companies (or brands!) deliver against their promise. A brand, then, is what a company says about itself and reputation is what others say about a company. 

A Generational Shift, Catalyzed by Calamity

Millennials and Gen Z buyers were responsible for the big push to build brands grounded in purpose. For more than a decade, leading companies responded to attitudinal and demographic shifts in the market by embracing more consumer-centric, service-minded, and purpose-driven branding. 


This new generation is even more sensitized to social issues as a result of the global pandemic. Research from Accenture suggests a realignment is afoot, as health, safety, trust and issues of wellbeing surpass traditional price and quality drivers in purchase decision making. In early 2021, research from the Annie E. Casey Foundation similarly identified healthcare, mental health, higher education, economic security, civic engagement, racial equity, environment as the new priorities. 

After more than a year of intense uncertainty due to the COVID-19 pandemic, political instability, racial discord, and severe climate events, it appears that millennials and Gen Z’s around the world are determined to hold themselves and others accountable on society’s most pressing issues. And companies will be judged. Company character—and executive character—is now a primary driver for purchase, brand loyalty and partnership. 

Judgment Day, Every Day

In How Humans Judge Machines, Cesar Hidalgo said that “people judge humans by their intentions and machines by the outcome.” Is a business a machine, constituent parts performing tasks? Potentially. If so, then, “brand” is intention and “reputation” is outcome. And proof of outcome is key to gaining trust among potential customers. 

In a recent survey by Okta, 75% of US respondents say they are unlikely to purchase from a brand they don’t trust. This helps explain why a vast majority of CEOs (87%) told Deloitte that “reputation risk” is their top strategic business risk and why 88% say their companies are explicitly focusing on managing reputation risk.

 If trust is the casualty of say/do disconnects, accountability is the antidote. With a shift towards accountability, the management of reputation and its contribution to the success of businesses is now a key factor being discussed in boardrooms and C-suites. 


Aligning Expectations to Manage Risk

Whenever there are disconnects between a brand promise and perceptions of delivery—a reputation gap—brands must achieve realignment. Here are three steps a company of any size should take to address a potential reputation gap: 

  1. Assess Your Risk: Look at the markets and customers you serve and identify the major sources for potential reputational risk (regulatory, competitive, environmental, operational, etc.). Map them out simply. Actively listen, through social media and earned media monitoring tools, to what others say about your company.
  2. Apply Pressure: In addition to the outside-in view of what’s happening in the market, take a look at your marketing materials and communications with a skeptical eye. Ask: If I didn’t work here/run this company, could I say these things are (mostly) true?
  3. Act with Purpose: Where you see gaps—either known external risks or internal risks—make a plan proactively to address them. Hold yourself accountable as you know your buyers, partners and employees surely will. 

Elizabeth Arden said, "repetition makes reputation, and reputation makes customers.” Why should tech companies take advice from fashion icons? Because, in order to mitigate reputational risk, companies need to ensure that purpose-based branding is met with purposeful action and accountability. 

Brand is about positioning and differentiation and reputation is about believability and trust. They must work together to create present and future value. Brand messaging should maintain transparency of intention and reflect humanity. The delivery of experiences and products needs to be reliable and capable of doing what is promised. The alignment of brand purpose and brand actions will deliver reputational—and commercial—value.


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