The Link Between Greater Profitability and a Better Reputation

by Phil Shirley on 09-12-2011

Managing PR and Reputation in a harsh economic climate brings varied challenges, from reduced budgets to maintaining employee morale in the face of job losses. But it can also mean that activities are more focused and results-orientated, and in some cases have raised the profile of strategic communication within the business. Greater challenges remain in widening understanding and proving the benefits of PR and Reputation management to senior managers. Until strategic communication is ‘hard-wired’ into business management, then it won’t withstand scrutiny in the boardroom.

Reputation management, however, has evolved from something of an insurance policy to guarantee reputational resiliency, to becoming more of a tool for more effective marketing to customers.

Hence, clients are now asking “does my reputation have an impact on our bottom line?”
“Does it make my marketing communication plans more effective?”
“Should we invest in our reputation?”
“Does it make good business sense?”

From a PR perspective, the answer is YES. The jury is still out on the causal link between greater profitability and a better reputation, but thePRfirm would argue that there is a very robust link between behavioural intent and reputation.

Indeed, the better the reputation the more likely people are to identify with a company’s brand, believe a company's messages, be willing to pay a premium for a product or service, and feel good about using the company's products or services- the better the reputation, the more effective the marketing. PR builds trust in companies and drives customers to its products and services. Customers’ use of the products and services builds trust. Customers who trust a company are more likely to buy its products and services and to believe its PR. This link has helped our clients make the case of active investment in PR and Reputation management.