A positive reputation is among the most important assets that a firm can possess. Firms which fail to manage their reputations effectively suffer a number of negative impacts. Poor quality products are among the factors that damage the reputations of firms. Diminished customer confidence is one of the harms that a firm could suffer when it fails to invest in product quality (Purohit, & Srivastava, 2001). Customers tend to gravitate towards firms which demonstrate commitment to quality. It is therefore little wonder that firms whose products are of high quality tend to enjoy customer confidence. Disappointing financial performance is another consequence of poor product quality (Purohit, & Srivastava, 2001). As customers lack confidence in a firm, they are unlikely to purchase the company’s products. Poor product quality could also have a damaging impact on employee morale, engagement and productivity. Investor relations could also suffer when a firm’s products are of questionable quality. In general, failure to create quality products harms a firm’s performance, relationships and operations.
A positive image is one of the resources that a firm can leverage to gain an edge over its competitors. Through a positive reputation, a firm can invest in corporate social programs (Carliste & Faulkner, 2006). Using these programs, the firm is able to remind its customers that it is dedicated to attending to the needs of its stakeholders. This way, the firm gains the trust and confidence of customers, thereby gaining a competitive advantage. Another role that a positive image plays is that it allows firms to attract competent and qualified employees (Eccles, Newquist, & Schatz, 2007). These firms are able to leverage on the competency of their employees to outperform their competitors. Positive reputations also enable firms to secure investor confidence. These firms are considered to be solid and their future secured. Investors therefore decide to financially support the operations of these companies (Eccles, Newquist, & Schatz, 2007). Since a positive reputation enhances the competitiveness of firms, it is essential for companies to take all necessary steps to build and protect their image.
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One of the measures that firms can take to build their reputation is to improve their relations with vendors and customers. Some of the strategies which enhance vendor relations include paying for products and services in good time, personalizing relationships and sharing information with vendors (Reiss, 2010). It is also important for firms to provide their vendors with adequate lead times. As they do this, the firms allow the vendors adequate times to fulfill orders (Reiss, 2010). To improve relations with customers, firms are advised to remain available when customers need them and to provide customers with the information they need to understand the operations and values of a company (Steinkirchner, 2012). Firms should also offer special services while providing customers with knowledge. Overall, placing customers at the center of their operations is the key to building strong relationships with customers.
There are various components that make up the reputation of a company. How it treats its employees is among these components. Firms which invest in the wellbeing of their employees tend to have good reputations. For example, a firm that pays its employees generously is viewed favorably by customers. Product quality is another critical element of company reputation. High quality products help to build the image of a firm. On the other hand, firms with a history of poor product quality suffer poor reputation. Investment in corporate social responsibility programs is another element of company reputation. If a firm sets aside finances for such programs as poverty eradication initiatives, the firm is poised for enviable reputation. Since the reputation of a firm determines the level of success that it achieves, companies should invest resources and efforts in building their image.
References
Carliste, Y. M., & Faulkner, D. O. (2006). The strategy of reputation. Briefings in
Entrepreneurial Finance, 14 (8), 413-422.
Eccles, R. G., Newquist, S. C., & Schatz, R. (2007). Reputation and its risks . Harvard Business
Review. Retrieved June 2, 2018 from https://hbr.org/2007/02/reputation-and-its-risks
Purohit, D., & Srivastava, J. (2001). Effect of Manufacturer Reputation, Retailer Reputation, and
Product Warranty on Consumer Judgments of Product Quality: A Cue Diagnosticity
Framework. Journal of Consumer Psychology, 10 (3), 123-134.
Reiss, B. (2010). Build a good relationship with suppliers. Entrepreneur. Retrieved June 2, 2018
From https://www.entrepreneur.com/article/206530
Steinkirchner, S. (2012). 5 ways to improve your customer service. Forbes. Retrieved June 2,
2018 from https://www.forbes.com/sites/sundaysteinkirchner/2012/08/22/5-ways-to-improve-your-customer-service/#3ae693fd14bc
