The profitability of a company can hinge on its reputation. We explore what steps start-ups can take to build theirs, without paying vast sums for PR.

A brand is more than a logo: it’s an asset. Beyond the colours and fonts associated with its trading name, a brand is how customers perceive a business. For a business to succeed its brand needs a five-star reputation.

Now more than ever customer purchasing decisions are influenced by brand perception. According to a 2020 survey by Trustpilot, 90% of respondents had made a conscious choice not to purchase from a company with a negatively perceived reputation. In January 2022, The Insolvency Service reported 1,560 insolvencies in England and Wales. Given the difficult economic conditions start-ups face, getting brand reputation wrong is not something many can afford.

What challenges do start-ups face?

Despite the fundamental role that reputation plays in sales and profitability, its consideration is often deferred until after a start-up’s market presence is better established. This is largely due to preconceptions of proper reputation management requiring vast resources and big budgets since professional reputation management is often associated with expensive PR teams and costly logos. However, a better reputation is not always a result of a bigger budget. By not taking a proactive stance on reputation building from the start, a business’s founders are essentially allowing others to do it for them – for better or for worse.

Today’s customers are powerful, with globally reaching platforms at their disposal on which to highlight the merits, or denounce the failings, of any company they choose. These conversations back a large amount of purchasing decisions; according to Trustpilot almost 93% of customers read reviews before buying online from an unfamiliar company. For start-ups lacking the reputational track record of more established businesses, the stakes are even higher.

The positive effects of a strong reputation on profitability and employee retention are clear. According to research by Weber Shandwick in 2020, global executives attribute 63% of their company’s market value to its overall reputation, while a 2019 report by the CBI stated that 76% of people want to work for businesses with good reputations. All these benefits are available to start-ups, provided they focus on a few key areas (outlined below) and develop a strategy that is both proactive and reactive.