Your online rep may be more critical than your credit score
Your online reputation is quickly becoming the new credit report.
Whether for a business or an individual, what is being said about you on the Internet carries more weight than ever. And depending on what is being said, it has the potential to make or break your credibility to do business.
The new credit score
With the sharing economy expanding and on-demand services booming, there are more rating and review systems being established to help people decide whom to do business with, said Karissa Sparks, the vice president of marketing at the reputation management firm Reputation.com.
But businesses aren’t the only ones getting a review. Consumers are also being given a score for their behavior.
“We are moving to these disruptive services like AirBnb and Uber and others that are part of the sharing economy. Companies are collecting data about you, including the reviews companies are writing about you, which will be more powerful than your credit score, ultimately. It will determine if you are able to do business in the reputation economy,” Sparks said.
The reputation economy is basically the notion that as we increasingly live more of our lives online, our credibility will become more dependent on our digital footprint. While this includes what is being said about people on social networks, e-commerce websites and news sites, it can also be applied to more recent review systems such as those that are featured in on-demand service apps.
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For example, Uber not only requires the customer to rate their driver after their ride but also has the driver give a rating to the passenger based on their behavior. The car-hailing app Lyft has a similar policy, and if a customer has a low rating, the driver may choose not to accept the request for a ride.
While companies such as Ebay and Amazon have had systems in place for helping to establish trust between buyers and sellers for a while, more companies are trying new ways to rate people using their online data.
The start-up TrustCloud, for example, uses a person’s social accounts and other data to establish their level of trustworthiness on peer-to-peer networks. And Klout uses social media analytics to measure and rank a person’s online influence.
The reputation economy and businesses
Still, it’s the age of the consumer, and it can be very difficult for a company to change a negative conversation if it’s already got a bad rep on the Internet.
“The Internet doesn’t forget,” Sparks said. “We live in the voice of the customer era. And there are tens of millions of reviews out there for everything from restaurants to doctors to car dealerships, and it’s powerful.”
In fact, 88 percent of consumers trust online reviews as much as personal recommendations, according to a survey by the marketing firm BrightLocal published last July. And 72 percent of consumers said that positive reviews make them trust a local business more.
“As a consumer you have a voice, and people are beginning to look at those voices,” said Bonnie Caver, the president of the reputation consulting firm Reputation Lighthouse.
The perception of a company drives 60 percent of peoples’ willingness to recommend or buy a product, according to an annual study by the Reputation Institute, while only 40 percent of that decision is based on the quality of the product.
In other words, who you are perceived to be now matters more than what you do or make, she said.
And with a simple Google search of a business often yielding reviews of a company within the first few results, businesses need to be paying attention more than ever to what consumers are saying about them online, Caver said.
Fixing a bad online rep
Unfortunately, though, many companies still live in the dark when it comes to being proactive about their personae online and find themselves in dire straits when trying to catch up.
“Most companies sit in what I call reputation oblivion,” Caver said. “They have their head in the sand and they have no idea. And then all of a sudden they get into firefighter mode when someone says, ‘You had a horrible review on Yelp.’ ”
To begin to address this, businesses must first determine if the bad reviews are just a one-off incident or stem from a larger issue.
“The first thing I ask my clients is: Do you have an online reputation problem or do you have a problem?” Caver said. “Because it could be you have an online reputational issue because someone was upset about something that has happened, but it’s not actually the way you do business and it’s not what most people are saying about your company.”
If larger issues can be ruled out, Caver said the company needs to regain control of the conversation by creating strong online content about the company, as well as encouraging transparency. This should include not only allowing reviews, but embracing and responding to them, she said.
“Know your channels and what people are talking about. Know all the touch points into your brand and have some view into them and how you monitor them,” Caver said.
Increasingly, more businesses are hiring reputation management firms to help them with these tasks.
Reputation.com, for example, has seen an uptick in business coming from companies looking to better manage their online reputation.
While the company is widely known for its services aimed at helping individuals improve their online presence by pushing negative content further down in search results, it now sells much more than search remediation to businesses.
Among other things, it will monitor what customers are saying in online reviews, help manage social media and track company listings. However, depending on the size of business and the tier of services, selected prices can range from hundreds of dollars a month to more than $1,000 per month.