Stakeholder communication has seen dramatic changes in terms of sources and channels for information that people trust. When more people trust search engines than a human editor, corporate communications has no option but to listen more and better to public opinion. The first step is for professional communicators to become more emotionally intelligent and live by the organisational values.
Image: Damien Hurst, "Treasures From The Wreck Of The Unbelievable" at the Punta Della Dogana in Venice / Photo: Louis de Schorlemer
Managing reputational risk is one of the key responsibilities of corporate communications, a risk intrinsically linked to our stakeholders and the way we deal with them. An organisational reputation is a fragile asset for any brand. Large, sophisticated corporations include the brand value into their balance sheet, while the rest rarely go beyond a mention in the CEO’s introduction in the annual report. Often, executives associate reputation with a high-profile, fashionable consumer brand. This leads the discussion on to marketing spend and that’s where it ends for the thousands of mid-sized or smaller enterprises, as they don’t dispose of relevant communications budgets.
Let’s therefore take a step back and explain how the reputation of an enterprise works. From a stakeholder perspective, reputation is defined as the intellectual, emotional and behavioural response as to whether or not the communications and actions of an organisation resonate with their needs and interests. To explain why reputation matters, we can take the example of a pharmacy. When asking for prescribed drugs, there is no difference in the quality of product, nor in the speed of delivery, nor in price from one pharmacy to another. It is purely transactional and we can go to any pharmacy to buy our medicines. Yet, we tend to go back time after time to our favourite pharmacy. And while an initial choice may be influenced by geographical location, it is our subjective feeling that we are in good hands that makes us return. We appreciate the good advice of the pharmacists, we like when they know us by name, when they remember our past concerns, when we can trust them for their discretion.
In other words, it is trust that impacts customer preference when doing business.
Trust also enables an enterprise to charge a premium for products and services, to benefit from stakeholder support in times of controversy, and to acquire and keep good employees. People like what they know and only a few of us are real adventurers. We don’t like change. The vast majority of customer loyalty and buying decisions are influenced by emotional as well as rational factors. While the prevailing classical economics mindset puts reason at the centre of people's fiscal actions, behavioural economists believe that rational considerations actually account for less than one-third of human decisions and behaviours. This means that the majority of a customer's buying decisions are made from the heart rather than from the head. As most of our brands or companies are unknown to the larger public, it is enough for us to identify our stakeholders and collect as much information as possible about them. Not all businesses need to go for a full inventory, but some may want to opt for a succinct stakeholder mapping for each production site or function. A survey providing a proper assessment of the stakeholder’s advocacy and attitude can complement the map and help prepare for an outreach campaign.