The global influence of the online reputation is enormous for a small business – over 80% of surveyed individuals prefer to do business with a company that has positive reviews.
Accredited institutions such as banks and investors are commonly looking at a business’ online reputation prior to approving a loan.
The direct impact on a business by poor comments and reviews on a business, its owner or even its employees can be significant; social media can spread a story globally in a few hours and there are even sites that encourage rumour mongering. 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 or the owner or employees online.
Although the restaurant business 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 over the next 12-24 months.
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 are increased by a good reputation.
Even share prices are vulnerable to Social rumour; just look at the damage a tweet caused to the US stock exchange in April 2013:
A news agency tweet, that turned out to be fake about explosions at the White House injuring President Obama, sent markets on a round-trip roller coaster ride.
@AP, the official twitter handle of the respected Associated Press news agency, sent out a message at about 1:07 p.m. ET, saying “Breaking: Two Explosions in the White House and Barack Obama is Injured.” The AP quickly said it was hacked.
White House Press Secretary Jay Carney said, “The President is fine” despite what the hacked Twitter feed said.
However, the market impact was already intense. On the floor at the Chicago Mercantile Exchange, traders quickly traded on the tweet, selling S&P futures and buying Treasury 10-year futures. For several minutes, the floor was a flurry of activity, as it was in trading rooms across Wall Street, until the Associated Press tweeted that its account had been hacked.
The Dow plunged more than 140 points and bond yields fell. Within six minutes, the Dow recovered its losses and was trading with triple-digit gains. Reuters estimated that the temporary loss of market cap in the S&P 500 alone totaled $136.5 billion.
The Australian Stock Exchange has issued guidelines to its members regarding monitoring social media sites with the following warning “As the reach of social media sites expands ever further, rumours circulating on those sites are more likely to be widely disseminated and thereby affect a company’s share price if they are perceived to be credible. It will therefore become increasingly important for companies to ensure that social media monitoring is not simply left to marketing personnel but treated with due weight. Failure to comply with continuous disclosure obligations can give rise to penalties, infringement notices and the potential for class actions, so companies need to ensure that their compliance processes are rigorous.”
To manage this increasingly complex discipline, Glass Frog have set up a specialist division focusing solely on reputation marketing and management which will be launched as a separate company in November 2013.