Close-Up: Viewpoint - Why brands will live and die by their reputation

The power of brand marketing now rests in the hands of consumers and clients must respect them.

Brand reputation is headline news this week, last week and I guarantee every week this year. Did Channel 4 handle media interest as well as it might? More importantly, did it allow one of its products, Big Brother, to wag the dog? Charles Dunstone did exactly the right thing to pull sponsorship of Big Brother: discuss. The whole population has a view on these matters.

Ask someone in advertising about the value of advertising (beyond sales) and they'll answer along the lines of "brand value"; ask someone in PR about the ultimate value of PR and they will answer "reputation".

In our modern, communication-driven world, brand management and reputation management need to work together in a new way and to some new guidelines.

A revolution is upon us, driven by the internet and the social impact it has helped create. In a world in which people trust people like themselves more than sources of authority; in which points of shared interest are being connected through millions of online forums; in which transparency is a fact of life and in which we are moving from a "download" mentality to an "upload" mindset, our approach to brand communications needs to change accordingly. The furore around Big Brother illustrates this.

The Wikipedia consensus has reputation as "the general opinion of the public toward a person, a group of people or an organisation". So reputation is a social phenomenon driven by the rise of social media.

The most evocative description I have heard is simply that "reputation is what people say about you once you're not in the room".

In a web 2.0 environment, brand reputation is becoming the difference between success and failure. Awareness and image remain helpful measures but reputation towers over them. In an ultra-fragmented, super-empowered, uber-democratised media environment, brands can't be omnipresent much of the time with controlled, first party activity. Brands are being discussed, dissected, advocated or rejected by growing numbers of third parties in a global chatroom.

Reputation is the new Colossus because it's the total of what's left once you've advertised, PR-ed, promoted, sold and serviced your end product. If you're going to sell your next product, it's all that counts. While a brand image belongs to a brand, a brand's reputation belongs to its public. Which would you want to be in best shape?

Modern reputation management involves far more than third-party coverage, word of mouth or buzz. It begins with the premise that we have switched from a "download" to an "upload" culture, where brands are downloads and reputations are uploads. In this environment, what you do is generally more important than what you say because people judge you by actions more than words and upload their views, pictures or films about your actions. The balance of power now lies with self-generated uploaded points of view.

Increasingly, then, the task for marketing will be to allow a brand's public to participate in, and interact and socialise with its reputation.

If reputation is this powerful, the next question must be: how do you create and manage such an intangible asset in what can seem a pretty scary environment?

I would propose that reputation is governed by three things: what you say, what you do and what other people say about you.

People or brands with poor reputations tend to say one thing and do another. "Other people" notice and talk about that negatively. Conversely, brands with good reputations tend to do what they say. "Other people" like that.

However, creating a good reputation isn't as simple as just doing what you say. Ultimately your reputation depends on integrity; knowing who you are, what you stand for and communicating with humanity your efforts to be true to that sense of self. Good people and good brands know who they are and behave accordingly. Bad people and bad brands aren't bad just because their words and actions don't accord; they simply don't know who they are.

Think of brand integrity in terms of the following brands. Who knows themselves better and behaves accordingly? O2 or T-Mobile; Tesco or Morrisons; Dyson or Electrolux?

Most of all, good brands are in touch with their audiences, listening to them intently and using that listening to define what they do. In an internet-enabled world, we are no longer living in a world of messages, but in a world of conversations. Those conversations can lead to new levels of intimacy and greater corporate response.

It is through this process that good brands know what decisions to take, what is "right" and what fits with the times. This enables them to be true to themselves, yet innovate with integrity.

What this means is that an understanding of how reputation works can provide new guidelines for brands that recognise the upload culture we are now all part of.

So what do you say? "To thyself be true in all you say and do." Brand reputation is fragile. Better to under-promise and over-deliver than vice versa. Accept that you can no longer control the message. All you can do is join in the conversation and believe that you have a more persuasive voice. Chatham House rules no longer exist. Be prepared for anything you say to be repeated or passed on. And reference has replaced deference. All brand communication must measure up to the closest scrutiny.

Reputation has to be earned. Customers are looking for the values behind brands, so "what you do" to create your brand every day is becoming a more serious factor of choice. Care for your employees, care for the environment, care for the ingredients of your brand will have a greater influence on your reputation as information is shared across the connected world of your employees, stakeholders, detractors and customers. Those closest to you tend to be your fiercest critics. In some instances they become whistleblowers. Treat them complacently at your peril. Over-communicate to those closest to you to keep them as closely connected to your brand as possible.

Charismatic brands rely on a visual narrative more than a verbal one. This provides huge scope for advertising, which can leverage the visual, whereas PR tends to the verbal. Brand reputation depends on its weakest link. Brands are only as good as their last customer experience. Gear your brand and corporate communications resource to the interconnected world of web 2.0. Marketing directors working in isolation of communication directors is a recipe for disaster and increasingly the functions should be merged or reconfigured. Entrepreneurial and service-oriented companies act like this already.

As for what others say about you, brand owners have long understood perception is reality. Successful brands of the future will monitor market conversations and engage with them. "User-generated uploads" are a 24/7 reality. Politicians speak of "permanent campaigning" and the need to win hearts and minds through the media on a daily basis. Brands of the future will employ brand newsrooms as a commonplace function, much as successful retail brands like Marks & Spencer do today.

Everything is getting faster. Kick the habit of using historical panel data that records points of view so long after the conversations have happened that they have little relevance to action. Use research to involve your customers in the development of your brands and track attitudes in real time when you can enter the conversation if you choose to.

For those involved in marketing, these new rules of engagement involve a radical shift of position, from "Brand Out" to "Reputation In". We call it the Reputation Revolution. Read next week's headlines for the next instalments.

- Chris Satterthwaite is the group chief executive of Chime.

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