Bad or good, reputation has become a board-level topic, and front page news. Still for most people, it is hard to define. It’s certainly a concept that seems to attract the most attention when it is lost. That may be one of its unique qualities. Unlike other intangible drivers of corporate value–brand, intellectual property, customer loyalty, human capital, etc.– reputation has as much visibility when it’s negative as when it is positive, or more. Brands tend to disappear when they move from positive to negative. After perhaps a splash of visibility on the way down, you don’t hear about brands that go bad. Bad reputations, on the other hand, become long-running front page soap operas, or the subject of endless gossip.
What is the difference between reputation and brand?
Brand and reputation are sometimes used as interchangeable terms, but although there can be overlap, they are different and work differently. Brand is, essentially, what the company or product says about itself. Brand operates through control. Usually, the company pays for the space or time or opportunity to deliver the crystallized message of the brand. The objective is to repeat that crystallized message, over and over, on a march to brand dominance in a market.
Once built that way, a brand can be bought or sold, more or less independent of the people behind it (with some exceptions for brands closely linked to individual creators or designers).
On the other hand, reputation is what others say about the brand or company, the uncontrolled dialogue between–for example–the company and customers, but more so between the customers and each other, or between experts and those who seek advice. Reputation can be influenced, but not controlled. It cannot be crystallized and repeated in perfect form. Reputation is created by the audience more than the organization or individual whose reputation is formed.
Reputation is earned, not purchased. And reputations cannot be bought and sold like brands, although one person’s or organization’s reputation can be “loaned” to another. That is actually one of the great benefits of a good reputation, for all parties in a relationship. Reputations are loaned all the time. It happens with endorsements, alliances, and other forms of collaboration or underwriting.
When it comes to sponsorships, some are about reputation — endorsing the value or quality of another party or product — and others, as in sports sponsorships, are more about brand and represent a transaction for visibility.
There is a functional difference, too, in the role brand and reputation play in relationships. Brand is a form of shorthand between the buyer and seller. Brands are made of combinations of a few attributes. Brand is the promise of what is inside the box, or what the ownership experience will be like. It attracts potential buyers to the front end of the marketing funnel. It is a critical ingredient in transactions.
Reputation is made up of a large number of attributes, viewed by many constituencies of a product, organization or an individual. It creates the framework of a relationship between that entity and the constituent–employer and employee, company and investor, company and policy maker, etc. Reputation carries through and extends throughout a longer life cycle of a relationship. Unlike brand, some of those attributes are not determined by the company or the person whose reputation is being built, interaction by interaction. Some attributes are assigned to the reputation by the audience.
If brand is shorthand between the seller and the buyer, reputation is the full story with footnotes, read by many different audiences, unfolding over time, and passed along with comments from every reader.
Earning the right to talk about the future
That doesn’t quite convey one element of the contrast between brand and reputation that makes reputation such an essential element of business leadership and marketplace success. A good brand gives the owner the right to sell the same thing again, to fill a need and even to be integrated into the definition a person has of himself or herself. I am a BMW driver, or a Starbucks drinker. That’s valuable and it has ongoing equity. Brands are mostly about now, and they continually refresh their place in “now” by delivering what they promise. Reputation is more about the future. In fact, the person or institution with a positive reputation has earned the right to be part of the dialogue about the future, in an ongoing relationship with the person or institution on the other side of that relationship.
When you lose your reputation, you lose your place in the conversation about the future. When you gain a greater, positive reputation, you are immediately entitled to address the future.
October 19th, 2009 |
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