Struggling to put a dollar value on reputation? How about $4 billion

Don’t underestimate the impact of losing the trust of your customers, regulators, and partners. While maintaining a strong reputation can seem intangible, the consequences of losing it are very real. 

Case in point: more than $4 billion was wiped from the ASX value of Woolworths and Coles immediately after the Australian Competition and Consumer Commission accused them of misleading shoppers by claiming to have dropped prices when they had actually increased them. 

As Kasper Ulf Nielsen, Executive Partner at the Reputation Institute, puts it, "People’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their perceptions of the company and only 40% by their perceptions of the products."

Reputation is more than just goodwill—it’s a tangible asset. In fact, the reputation capital of some top US companies makes up over half of their market value. Brands like Apple (57%), Amazon (56%), and Microsoft (55%) derive significant portions of their valuation from reputation alone. Across the S&P 500, reputation was responsible for around 30% of overall value.

Reputation isn’t just about damage control. It’s about long-term success. So, how do you build and maintain this vital asset?

1. Be transparent

Transparency isn’t just a buzzword; it’s a business necessity. According to a NielsenIQ report, 81% of consumers rate transparency as important or very important in their decision-making process. As Forbes defines it, “Business transparency is the process of being open, honest, and straightforward about various company operations.” This includes everything from performance to pricing to business values.

In a world where consumers expect brands to share more than just products, being upfront about your operations can be the difference between loyalty and distrust

2. Engage with your customers

Customers don’t trust brands they don’t hear from—or worse, those that only deliver one-way messages. Brands that listen to and actively respond to their customers build stronger relationships.

Social media plays a huge role in building trust. According to research from Sprout Social, 65% of consumers feel more connected to brands with a strong social presence. They also want to see the people behind the brand—when a CEO is active on social media, 70% of consumers feel more connected, and nearly two-thirds say it shows the business is run by real people.

When your audience feels heard and understood, they’re more likely to stick with you. So, engage consistently and meaningfully—don’t let your brand be the one that just talks, but never listens.

3. Do what you say you’re going to do

Making promises is easy; keeping them is where trust is built. Whether it’s a commitment to sustainability, product quality, or customer service, following through on your promises is critical to maintaining credibility.

Volkswagen’s emissions scandal is a prime example of a brand failing to live up to its promises. After marketing its vehicles as eco-friendly, it was revealed the company had installed software to cheat emissions tests, causing immediate and lasting damage to its reputation. 

To avoid breaking trust, make sure that internal teams are aligned with the external messaging. Set realistic expectations and make accountability a key part of your organisational culture. If mistakes happen, own them, and communicate clearly with customers about how you’ll make things right.

4. Show empathy

Empathy isn’t just something practised by customer service reps. It’s a brand’s ability to understand and respond to the needs and concerns of its audience. In challenging times, brands that show genuine empathy build lasting loyalty.

In practice, empathy could mean offering flexible payment plans during financial hardships or proactively reaching out to offer assistance when your product or service isn’t living up to its expectations. Showing you care about the people behind the purchases can set your brand apart in a sea of faceless corporations.

5. Reputation is everyone’s responsibility

Too often, reputation management is seen as the job of the comms team or the C-suite. In reality, it’s an organisation-wide effort. Every department, from product development to customer service to marketing, plays a role in shaping how your brand is perceived.

The #QantasLuxury debacle is a textbook example of how poorly coordinated efforts can backfire. After a period of strikes and grounded flights, Qantas launched a Twitter campaign asking followers to tweet their idea of luxury. Instead of positive engagement, it turned into an opportunity for disgruntled customers to air their grievances. This was a clear disconnect between marketing and the broader business context. If reputation management had been treated as an organisation-wide responsibility, Qantas might have avoided a PR disaster.

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Reputation is a valuable, yet fragile, asset. When nurtured through transparency, engagement, follow-through and empathy, it can drive long-term success. But lose it, and, as the Aussie supermarket giants have shown, the costs—both financial and reputational—can be immense.

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