Why Is Reputation Important To Small Businesses?
Most, if not all, business owners are eager to improve their reputation. But what does “reputation” means in the field of business? And why exactly is reputation important to small businesses?
Experts and business owners have different interpretations of the word “reputation.” The term refers to the public’s impression or consumer’s perception—whether positive or negative—of your business, brand, product, or service. Thus, reputation is subjective.
Everything about the business could impact its reputation. It depends mainly on treating your stakeholders—your customers, employees, and the general public. However, remember that the business owner can manage a part of the reputation. For this reason, small businesses and even large corporations employ the help of reputation management systems and tools. Granted, they can cost a considerable amount, but the advantages a positive reputation can bring are often worth the expense.
Five benefits of a positive reputation for small businesses
A business’s reputation is one of the most valuable assets of an establishment and should be a part of your local marketing campaign. It can make or break your small business. With that said, here are other reasons why establishing your business reputation is essential:
Creates a great first impression
Customers play a significant role in a business. By understanding your business’s mission and goals, you’ll be able to attract new customers. This can be achieved through a positive reputation.
One way to establish a positive reputation is through customer review. This can be achieved by encouraging your customers to leave feedback about their experience. When potential customers come across your business and see positive reviews, they’d be more inclined to give your business a try, and eventually, they can become loyal customers.
In contrast, if most reviews are negative or you have a negative reputation, they may opt for your competitors instead. The same applies when your small business has a negative reputation. So, even if you offer revolutionary products and services, it’d be all for nothing if your target customers perceive your business negatively and no one’s willing to try them out
Here are some tips to encourage your customers to leave a review:
- Politely ask for a review. You can ask your customers to answer an online form to share their thoughts about the business.
- Keep your feedback form concise and straightforward. This way, your customers can easily share their thoughts. It can be a scale, checkbox, or short comments.
- Make it personal. You can leave a personal message at the end. This powerful tool is a great way to get positive comments.
- Reply to the reviews. If it’s a positive review, thank them. If it’s negative, apologize or assist them to better their experience.
Communication builds relationships. This applies to businesses as well. Engaging with your customers will help your small business develop its reputation and, in effect, can attract more potential customers.
- Boosts customer loyalty
Aside from attracting potential customers, you should be able to nurture your existing and loyal customers. A positive reputation validates your customers’ opinions that your products are truly top-notch. And in doing so, turns your customers loyal, and the already loyal customers even more so. In contrast, a negative reputation can drive away some of your customers, even the loyal ones.
- Gives your business free advertisement
Advertising is a must in any establishment, especially in small businesses. A positive reputation promotes your company by improving your customers’ first impression. But to top it off, you also enjoy free advertising as your loyal customers begin to spread the word about the quality of your products and services. On the other hand, with a negative reputation, you’ll have to exert more effort to promote your business, requiring plenty of resources.
- Motivates your employees to stick to your business
Employees, like customers, are significant to your small business. A positive reputation helps the business attract qualified employees, making the search easier and more efficient. Additionally, it validates your employees’ opinions. In some cases, it may even improve their productivity as they realize they’re working for a business with a bright future.
- Attracts partnerships and investors
Investors could refer to your family, friends, or people who trust your small business and are willing to venture with you. Hence, building and nurturing connections with investors is crucial. It allows you to explore otherwise unavailable solutions if you don’t have connections.
With a suitable proposal and a positive reputation, your small business can attract investors for several reasons, and one could be your business’s potential which could further expand. Compared to a negative reputation, it would be difficult to attract customers and even investors.
Parting words
Reputation affects different aspects of small businesses: customer loyalty, marketing, employee retention, and business connections. This fact alone shows that reputation is indeed crucial to establishments. This is even more of a case for local businesses as they thrive on word of mouth. Hence, it’s only fitting that you spare no effort in improving your reputation.