Business reputation is an important one as perception of a brand to a consumer matters. Whether they’re a customer yet or not, what a business does and says will have an influence over how well they perform as a company.

When a business gets a bad reputation, it damages the company as a whole. A good reputation is hard to build up but can lead to great things. A business with a bad reputation is one that’s hard to remove or make better.

In this guide, we’ll explore how reputation matters for a business and the eight reasons why a business ends up with a poor reputation.


Why is reputation important to businesses?

Reputation is extremely important in business, especially when it comes to the market nowadays. With the rise of the internet and the influence of digital media, reputation can be gained quickly and lost in an instant.

A good reputation can do the following:

  • Shows customers that the business is trustworthy and honest.
  • Attracts top talent to the table.
  • Lowers marketing and acquisition costs.
  • Improves word-of-mouth with current customers.

It’s always better to have a positive reputation, rather than a negative one. While they say all publicity is good publicity, that doesn’t always provide the best results for a business.

8 reasons why a business has a poor rep

With businesses, what are the reasons that contribute to a poor rep? A business that’s underperforming is one that will typically get a less-than-favorable reputation. The same goes for those who bad-mouth or make a big publicity faux-pau.

With that being said, let’s look at the eight reasons why a business may have a bad reputation.

It’s not offering enough value.

There are some businesses that don’t consider the value they are giving to their customers. To keep up a good reputation, businesses need to be active in going above and beyond. If they’re just doing the bare minimum, chances are, customers will walk and in some cases, bad mouth the company.

Value for money is important and with customers wanting more, it’s important to do the utmost possible. Failure to provide value for money can make customers feel as though they’ve been dealt the short straw or as it’s often referred to ‘short changed’.

With more value provided, it will have a direct impact on the company’s reputation as a whole.

They’re not spending enough time and effort on customer service.

As a business, time is money. However, that time is important for your customers to receive too. Customer support services matter greatly and if customers are ignored, they’ll go elsewhere. 

A bad reputation can often come from bad customer service communications. That could be a lack of communication options or just poor communication in general. For 86% of customers, good customer service can turn one-time shoppers into loyal customers.

It’s always harder to retain customers than to acquire them, meaning you want to try and spend the time and effort, improving your customer services. 

Customer experience is below average.

As a customer, if the best service isn’t being provided for the money spent, it’s easy to form a negative opinion of the company. This can be particularly damaging to a business in the case where it’s a first-time encounter with the brand.

With a focus on experiential marketing, the customer’s experience is paramount to business success. Unfortunately, not all businesses recognize this and as a result, put customer experience further down the list of priorities. This results in a poor reputation being made from the growing number of unhappy customers.

For example, your clients may be executive-level job holders that expect a certain degree of luxury. The extra touches you can deliver to them when building a relationship goes a long way. From using Sub 60 couriers to treating them to theatrical experiences when visiting from out of town.

Simple additions made to a customer’s experience can be the difference between a glistening reputation, or a damaged one.

No investment in marketing.

Marketing is very much necessary in this day and age, especially when it comes to promoting a new business. New businesses have to deal with a lot of competition and build brand awareness at the same time.

With the right knowledge and know-how, marketing can be leveraged to help a business garner much success.

However, many businesses tend to fail at this because they either don’t have the experience in marketing or they’re making silly mistakes. No marketing or publicity when a product launch has gone bad for example can be a scenario in which reputation is lost.

If a business isn’t marketed, then how can a business expect to get any visibility in an already noisy market?

Lack of communication in supply and demand.

As a business, how products are delivered is key. Being able to supply customers with the level of demand in existence is essential to helping the business grow. When the business is not achieving these benchmarks, it can end up backfiring.

Working with suppliers is different for every business with some finding great suppliers and others finding less than efficient ones. It’s always good to assess the current demand for the business and whether current suppliers can supply what’s needed. 

Letting down other suppliers in the chain isn’t going to earn the business any favors and that can result in customers being disappointed too.

For example, imagine having a product launch, having several thousand orders, and then only half can be fulfilled by the supplier in the time frame required. This is the sort of scenario that can cause reputational damage.

Failure to deliver to investors and/or stakeholders.

With investors and stakeholders involved in most businesses, how the business works with them is essential. A business may pitch to investors or stakeholders with certain promises and it’s essential to keep those promises for the sake of keeping everyone happy.

However, that doesn’t always happen and the result can contribute to a bad rep. If a business fails to deliver on its promises, investors or stakeholders may pull themselves out of the deal, leaving a business high and dry. At that point, there’s more than just reputation at stake.

The quality of products or services is poor.

The quality of products or services as a business should always be top-tier. Whether it’s a new business or not, an average quality product isn’t going to go down well with any customers that buy from the business.

When it comes to running a business and selling products, less is more. Regardless of how big a business becomes, focusing on quality over quantity will always pay off from a reputational standpoint. Failure to provide quality products will end up having negative consequences.

Disgruntled employees.

With most employees, businesses hope to have a good experience both when the employee is working there and once they’ve left. However, that doesn’t always happen and often at times, employees can become disgruntled when they’ve had a bad experience.

Just like customers using word-of-mouth to discuss a business, ex-employees will often do the same too. It’s necessary to end working relationships in the most positive way possible, rather than trying to leave employees leaving with a sour taste in their mouths.

How to improve business reputation

Now with this information in hand, how can a business improve its reputation? Here are a few top tips for improving it in a positive way.

Develop a brand identity

Creating a business brand identity is the first step in helping improve a reputation. This identity needs to be representative of the company but pick out all the best parts. Avoid focusing on anything that anyone has said previously in a negative way.

Keep customers happy

Keeping customers happy is the be-all and end-all to ensuring a business stays successful. If a business doesn’t have customers, then they don’t have a business in the first place.

Get help from a brand expert

Businesses can’t do everything themselves internally, which is why they often outsource their needs. Getting help from a brand expert can be a great way to improve the reputation of the brand. They can solve the problems that employees responsible for repairing a poor reputation, are struggling with.

With the right knowledge of how a bad reputation is caused in the first place, a business can do everything it possibly can to avoid it. If a business implements the above suggestions, it’ll be on the right path to a positive brand image.