Reputation marketing

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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.

Contents

Impact

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 taking a proactive approach toward your brand’s presence. [5] 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. [6] 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. [4]

Influence of social networking sites

Online reviews have a tremendous influence on consumers' purchases since they can read evaluations and opinions of the items they are considering. Amazon was the first company to invite consumers to post reviews on the internet [7] and many others have since done the same. The average customer finds social media more trustworthy than brand-generated marketing making social media more effective than television commercials, advertising signs, and internet banners at drawing potential consumers; however, reviews by people the consumer does not know are only 2% as effective. [8]

The chart below shows the most viewed review websites of 2017 according to Alexa: [9]

Review WebsiteAvg. Monthly U.S. Traffic
Google My Business158.03 million
Facebook85.57 million
Amazon85.44 million
Yelp40.47 million
Trip Advisor28.27 million
Yellowpages10.5 million
BBB (Better Business Bureau)6.15 million
Manta6.48 million
Angies List5.44 million
Foursquare3.67 million

Effects on businesses

A business's online reputation can have a critical impact on its success or failure, with more than 3 out of every 4 people preferring positively reviewed businesses over negative ones. The impact of negative reviews may even affect a business's ability to secure financial assistance as banks and other financial institutions check a company's online ratings as part of the application process. [10] In today's non-private, social society it would be plausible to see that one's business could be affected by what people say about it, the owner, or employees online. [11]

Reputation marketing and building a good online reputation are critically important. However, they are not stand-alone growth strategies. Reputation marketing yields the most positive returns when coupled with other online and offline marketing efforts since the effectiveness of these efforts is increased by a good reputation. The popularity of smart phones have made it almost essential for businesses to be mobile-friendly with click-to-call, click-to-map, and instant review options readily available. [12] Although the food industry seems to be most impacted by online reviews, experts predict that doctors, contractors, surgeons, accountants and many other local business owners will see more and more online reviews due to changes in search engines. [13]

Economical impact

The benefits of online platforms on the economy are supported by predictions of economic theory, with most consumers preferring convenience, buyer options, and free access to information. [14] Product ratings and reviews are an important factor in how consumers choose products and services, with product ratings (usually in stars) attracting customers while personal reviews have the greater impact on the actual buying decision.[ citation needed ] Spending increases more than 30% with companies that have positive reviews companies with negative reviews may face a substantial drop in consumer traffic. [15] Research conducted in the United Kingdom by Barclays looking at how greater responses of businesses to the increase of customer feedback would improve business performance, shows that the economic output could grow by an additional 0.07% between 2016 and 2026. The effects could lead to an increase in the economic output of the United Kingdom by £555 million ($747 million) per year over the average growth rate by the year 2026. [16]

Related Research Articles

The reputation or prestige of a social entity is an opinion about that entity – typically developed as a result of social evaluation on a set of criteria, such as behavior or performance.

<span class="mw-page-title-main">Testimonial</span> Statement extolling the virtue of a product or person

In promotion and advertising, a testimonial or show consists of a person's written or spoken statement extolling the virtue of a product. The term "testimonial" most commonly applies to the sales-pitches attributed to ordinary citizens, whereas the word "endorsement" usually applies to pitches by celebrities. Testimonials can be part of communal marketing.

Marketing communications refers to the use of different marketing channels and tools in combination. Marketing communication channels focus on how businesses communicate a message to its desired market, or the market in general. It is also in charge of the internal communications of the organization. Marketing communication tools include advertising, personal selling, direct marketing, sponsorship, communication, public relations, social media, customer journey and promotion.

Reputation management, originally a public relations term, refers to the influencing, controlling, enhancing, or concealing of an individual's or group's reputation. The growth of the internet and social media led to growth of reputation management companies, with search results as a core part of a client's reputation. Online reputation management, sometimes abbreviated as ORM, focuses on the management of product and service search engine results.

<span class="mw-page-title-main">Yelp</span> Directory service and online review forum

Yelp Inc. is an American company that develops the Yelp.com website and the Yelp mobile app, which publishes crowd-sourced reviews about businesses. It also operates Yelp Guest Manager, a table reservation service. It is headquartered in San Francisco, California.

A review site is a website on which reviews can be posted about people, businesses, products, or services. These sites may use Web 2.0 techniques to gather reviews from site users or may employ professional writers to author reviews on the topic of concern for the site.

Influencer marketing is a form of social media marketing involving endorsements and product placement from influencers, people and organizations who have a purported expert level of knowledge or social influence in their field. Influencers are someone with the power to affect the buying habits or quantifiable actions of others by uploading some form of original—often sponsored—content to social media platforms like Instagram, YouTube, Snapchat, TikTok or other online channels. Influencer marketing is when a brand enrolls influencers who have an established credibility and audience on social media platforms to discuss or mention the brand in a social media post. Influencer content may be framed as testimonial advertising.

<span class="mw-page-title-main">Digital marketing</span> Marketing of products or services using digital technologies or digital tools

Digital marketing is the component of marketing that uses the Internet and online-based digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and services. Its development during the 1990s and 2000s changed the way brands and businesses use technology for marketing. As digital platforms became increasingly incorporated into marketing plans and everyday life, and as people increasingly used digital devices instead of visiting physical shops, digital marketing campaigns have become prevalent, employing combinations of search engine optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content automation, campaign marketing, data-driven marketing, e-commerce marketing, social media marketing, social media optimization, e-mail direct marketing, display advertising, e-books, and optical disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide digital media, such as television, mobile phones, callbacks, and on-hold mobile ringtones. The extension to non-Internet channels differentiates digital marketing from online marketing.

<span class="mw-page-title-main">Brand ambassador</span> Person employed by an organization or company to represent a brand in a positive light

A brand ambassador is a person engaged by an organization or company to represent its brand in a positive light, helping to increase brand awareness and sales. The brand ambassador is meant to embody the corporate identity in appearance, demeanor, values and ethics. The key element of brand ambassadors is their ability to use promotional strategies that will strengthen the customer-product-service relationship, influence a large audience to buy and consume more.

A touchpoint can be defined as any way consumers can interact with a business organization, whether it be person-to-person, through a website, an app or any form of communication. When consumers come in contact with these touchpoints it gives them the opportunity to compare their prior perceptions of the business and form an opinion.

Social commerce is a subset of electronic commerce that involves social media and online media that supports social interaction, and user contributions to assist online buying and selling of products and services.

<span class="mw-page-title-main">Content marketing</span> Form of marketing focused on creating content for a targeted audience online

Content marketing is a form of marketing focused on creating, publishing, and distributing content for a targeted audience online. It is often used by businesses in order to achieve the following goals: attract attention and generate leads, expand their customer base, generate or increase online sales, increase brand awareness or credibility, and engage an online community of users. Content marketing attracts new customers by creating and sharing valuable free content as well as by helping companies create sustainable brand loyalty, providing valuable information to consumers, and creating a willingness to purchase products from the company in the future.

Marketing buzz or simply buzz—a term used in viral marketing—is the interaction of consumers and users with a product or service which amplifies or alters the original marketing message. This emotion, energy, excitement, or anticipation about a product or service can be positive or negative. Buzz can be generated by intentional marketing activities by the brand owner or it can be the result of an independent event that enters public awareness through social or traditional media such as newspapers. Marketing buzz originally referred to oral communication but in the age of Web 2.0, social media such as Facebook, Twitter, Instagram and YouTube are now the dominant communication channels for marketing buzz.

Customer feedback management (CFM) online services are web applications that allow businesses to manage user suggestions and complaints in a structured fashion. A 2011 study conducted by Aberdeen Group showed that companies using customer feedback management services and social media monitoring have a 15% better customer retention rate.

<span class="mw-page-title-main">Social media marketing</span> Promotion of products or services on social media

Social media marketing is the use of social media platforms and websites to promote a product or service. Although the terms e-marketing and digital marketing are still dominant in academia, social media marketing is becoming more popular for both practitioners and researchers. Most social media platforms have built-in data analytics tools, enabling companies to track the progress, success, and engagement of social media marketing campaigns. Companies address a range of stakeholders through social media marketing, including current and potential customers, current and potential employees, journalists, bloggers, and the general public. On a strategic level, social media marketing includes the management of a marketing campaign, governance, setting the scope and the establishment of a firm's desired social media "culture" and "tone".

Internet branding is a brand management technique that uses the World Wide Web & Social Media Channels as a medium for positioning a brand in the marketplace. Branding is increasingly important with the advancements of the internet. Most businesses are exploring various online channels, which include search engine, social media, online press releases, online marketplace, to establish strong relationships with consumers and to build their brands awareness.

Employer brand is branding and marketing the entirety of the employment experience. It describes an employer's reputation as a place to work, and their employee value proposition, as opposed to the more general corporate brand reputation and value proposition to customers. The term was first used in the early 1990s, and has since become widely adopted by the global management community. Minchington describes employer brand as "the image of your organization as a 'great place to work' in the mind of current employees and key stakeholders in the external market. The art and science of employer branding is therefore concerned with the attraction, engagement and retention initiatives targeted at enhancing your company's employer brand."

Online presence management is the process of creating and promoting traffic to a personal or professional brand online. This process combines web design, and development, blogging, search engine optimization, pay-per-click marketing, reputation management, directory listings, social media, link sharing, and other avenues to create a long-term positive presence for a person, organization, or product in search engines and on the web in general.

<span class="mw-page-title-main">User review</span> Consumer appraisal posted online

A user review is a review conducted by any person who has access to the internet and publishes their experience to a review site or social media platform following product testing or the evaluation of a service. User reviews are commonly provided by consumers who volunteer to write the review, rather than professionals who are paid to evaluate the product or service. User reviews might be compared to professional nonprofit reviews from a consumer organization, or to promotional reviews from an advertiser or company marketing a product. Growth of social media platforms has enabled the facilitation of interaction between consumers after a review has been placed on online communities such as blogs, internet forums or other popular platforms.

Social media use by businesses includes a range of applications. Although social media accessed via desktop computers offer a variety of opportunities for companies in a wide range of business sectors, mobile social media, which users can access when they are "on the go" via tablet computers or smartphones, benefit companies because of the location- and time-sensitive awareness of their users. Mobile social media tools can be used for marketing research, communication, sales promotions/discounts, informal employee learning/organizational development, relationship development/loyalty programs, and e-commerce.

References

  1. ↑ Grimes, Marisa (10 April 2012). "NIELSEN: GLOBAL CONSUMERS' TRUST IN 'EARNED' ADVERTISING GROWS IN IMPORTANCE". nielsen.com.
  2. ↑ Luca, Michael. "Reviews, Reputation, and Revenue: The Case of Yelp.com" (PDF). Harvard Business School. Retrieved 14 January 2013.
  3. ↑ Ferenstein, Gregory (2 September 2012). "Berkeley Study: Half-Star Change In Yelp Rating Can Make Or Break A Restaurant". TechCrunch. Retrieved 14 January 2013.
  4. 1 2 Olenski, Steve. "Why Brands Should Think Reputation Marketing, Not Reputation Management, To Win The Future". Forbes. Retrieved 2017-12-04.
  5. ↑ Bell, D'Vaughn. "Reputation Marketing: Best Practices To Keep In Mind When Building Your Brand's Image". Forbes. Archived from the original on 2021-08-14. Retrieved 2022-05-03.
  6. ↑ Daisyme, Peter (2016-06-10). "Top 10 Tools for Reputation Marketing". Entrepreneur. Retrieved 2017-12-04.
  7. ↑ "The Growing Importance of Reputation and Reviews to Local Businesses and Why Local Businesses Need to Focus on Reputation First (infographic)". Archived from the original on 2013-12-15.
  8. ↑ Castellano, Sylvaine; Dutot, Vincent (2017). "Investigating the Influence of E-Word-of-Mouth on E-Reputation". International Studies of Management & Organization. 47: 42–60. doi:10.1080/00208825.2017.1241088. S2CID   151330620.
  9. ↑ "Top Sites in United States - Alexa". www.alexa.com. Retrieved 2017-12-05.
  10. ↑ McRoy, James. "Reputation Marketing - Glass Frog Digital, Advanced Marketing Services with Guaranteed Results". Glass Frog Digital, Advanced Marketing Services with Guaranteed Results. Retrieved 2017-12-04.
  11. ↑ Botsman, Rachel (2012-08-20). "Welcome to the New Reputation Economy". Wired UK. Retrieved 14 January 2013.
  12. ↑ Metcalfe, Scott (29 November 2012). "Why Reputation Management Should Be Your Top Marketing Priority". ConvinceandConvert. Retrieved 14 January 2013.
  13. ↑ Metcalfe, Scott (29 November 2012). "Using the Power of Social Proof to Grow Your Local Business". WebROI. Retrieved 14 January 2013.
  14. ↑ Benefits of Online Platforms (PDF). Oxera. 2015. p. 30.
  15. ↑ "Survey: 90% Of Customers Say Buying Decisions Are Influenced By Online Reviews". Marketing Land. 2013-04-09. Retrieved 2017-12-04.
  16. ↑ Saul, Mike (May 2016). "The feedback economy" (PDF). Barclays.
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