The reputation-reality gap is a long-held theory that occurs when a brand’s or individual’s reputation doesn’t match reality. Reputation is essentially a matter of stakeholder perception, and reality is the truth. With an influx of consumer demand regarding corporate social responsibility, we’re seeing more and more cases of whitewashing, greenwashing, and businesses essentially not fulfilling their brand promise. When a brand presents in a particular way, and consumers find out the truth is vastly different, customers can experience a range of emotions akin to betrayal, which is likely to cause friction and potentially a crisis for the business. In this piece, we explore reputation-reality gaps in detail and how to avoid them regardless of how big or small your business is.
While the value of a positive brand reputation is priceless, most businesses do little to manage or invest in their reputation proactively. Benjamin Franklin once said, “It takes many good deeds to build a good reputation, and only one bad one to lose it.” Despite this, many businesses remain complacent. They may handle threats that surface, but few companies invest in ongoing risk management and fail to understand the value of brand perception.
A false reputation-reality and the impact on your brand
In many cases, most businesses are unaware that they may be experiencing a reputation-reality gap until they’re faced with a crisis or public relations (PR) issue. Irrespective of business size, if your reputation is better than the reality of your practices, you’re undoubtedly setting yourself up for failure.
A positive brand reputation will not only attract and retain your desired target audience, but it will also attract potential team members, which means reputation management can also be considered a part of your human resources process.
While it may be more common for a brand to have a perception that exceeds reality, it can also be the opposite. A brand may have an undeserved or outdated reputation that it has worked hard to correct, but perception hasn’t caught up. Harvard Business Review acknowledges that it can be tempting to feel defeated and wonder why to bother in situations like this. However, they also highlight a business is obligated to close any reputation-reality gap as business perception is linked to performance, profile, and overall value for stakeholders.
Read our blog to find out why online reputation management is so important.
Where it all went wrong…
In 2022, Australian telecommunications company Optus faced a major cyber security attack that resulted in hackers obtaining millions of customers’ private and identifying information, including home addresses and ID numbers.
This attack caused widespread issues for Australians nationwide, with many having to obtain new driver’s licenses, Centrelink logins, and even passports. Attorney-General Mark Dreyfus has questioned why Optus kept customers’ personal document identification numbers for years, even after they left the telecommunications giant.
“For too long, we’ve had companies solely looking at data as an asset they can use commercially,” he said.
This is a clear example of a reputation-reality gap. Customers provide Optus with private information, assuming they have certain protective methods to keep their data confidential and secure.
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As a result, privacy laws will likely be overhauled as Optus looks likely to face fines and be expected to foot the costs of replacement passports and licenses.
2023 update: The Australian government are still in talks to overhaul Australian privacy laws. In the aftermath of the data breach, Optus apologised for the breach and set aside $140 million to help customers renew ID documents and commission an independent report into the breach.
For more examples of well-known global companies that have experienced a reputation-reality gap due to greenwashing, visit earth.org.
Still not convinced? Here’s why you should invest in your online reputation.
How to avoid a reputation-reality gap
Brand audit
In most cases, a business can avoid reputation-reality gaps with careful and continuous management of its brand reputation.
If a business is looking to determine whether they have a potential gap, the first thing it can do is assess its brand reputation by asking the following questions:
- What is the company’s reputation concerning products, financial performance, corporate culture, customer service, satisfaction, and brand values?
- How does the company compare to its peers?
Various internal and external stakeholders should be invited to participate in the audit to provide a comprehensive and detailed cross-section of responses. This data can be collected in many ways, including:
- Surveys
- Online or face-to-face interviews
- Customer feedback forms
- Googling your business name
- Checking rating sites like Product Review, Trip Advisor, or relevant industry sites
Once you have a clearer picture of how others perceive your business, you can consider whether their perception matches the reality of what your business actually does.
For example, many businesses claim to be environmentally friendly. But what does that mean? What do your stakeholders think you’re doing to make this claim? Do their perceptions match reality? If not, what can you do about it?
Build a factual brand story
One of the best ways to avoid a reputation-reality gap is to create and maintain an accurate and factual brand story. As a business, you are responsible for being truthful and authentic so your stakeholders can make informed decisions about their involvement with your company.
In Brand Choice: Why Do We Choose One Brand Over Another?, we explored business ethics in more detail and how consumers – particularly millennials, will actively boycott a brand with opposing values. Importantly, all brands can’t be all things to all people. Communicating who your brand is and what it stands for with a transparent and engaging story will inadvertently attract the right people.
While many businesses make broad, sweeping statements regarding sustainability, diversity, gender equality, wellness, and security, not all of them ‘walk the talk.’
Ideally, every business would invest in and prioritise these areas, but that’s not the case. For some, their values are different, others may not be able to afford the investment, or it may not be viable for their business to focus on a particular area. This isn’t so much the issue. The challenge is when a company claims to be passionate about a particular area, but they do nothing meaningful or impactful to demonstrate its dedication. They’re setting themselves up for failure as they are potentially attracting people passionate about the areas they claim to value as a business. Had they been authentic from the beginning and chosen to focus on what they actively value, they are likely to have attracted the right audience with like-minded values from the start.
Maintaining an accurate brand perception
Establishing and building a solid brand reputation isn’t a set-and-forget activity. It’s an exercise that requires constant and regular management to ensure you portray an accurate and authentic brand story that moves with the times while remaining strong to its core values. Ideally, brand audits should be undertaken every 18-24 months to discover potential gaps or miscommunications that may cause concern.
By being proactive, you can build your brand narrative in a way that enables you to be accurately perceived. Ultimately, this should impact your bottom dollar as you can build engaged and loyal communities that choose you.
