10 things that can really damage your brand reputation: The 2023 guide

Your brand is your company’s reputation. It’s the image you present to the world that represents your company, products and services. A strong, loyal customer base that trusts your brand is how you gain a reputation. Abiding by ethics, and being transparent and fair is how you keep it. When you have a good brand reputation, people trust you as an organization. They see you as a trustworthy source of quality products and services. This naturally builds trust in your company and its brand over time. 

However, there are also things that can negatively impact your brand reputation. These are called ‘activating factors’ – they bring things out in people that would normally be kept hidden or repressed. These factors include external events, internal weaknesses, competing brands and external perceptions of the brand’s activities (public relations).

Findings of a joint study by Kaspersky Lab and B2B International found that brand reputation costs at least $200,000 to repair. If any one of these activates for your business occur, it can be extremely costly for your brand reputation

Negative News

News should, ideally, be positive for your brand. If it’s negative, it’s bad for your reputation and business. Negative news stories about your company or its products and services can damage your reputation and brand. This can happen when news, from anywhere, is published about your company. It could be a positive or negative story, or it could be a mix of both. However, it will be published and people will see it, hear about it or read about it. Regardless of how it’s received and whether it’s true, if it hurts your brand reputation, it’s damaging. If your brand is involved in any of the following, publicly-reported issues may damage your brand reputation.

Poor Customer Service

Customers are your most important asset. They are the ones who pay you and make your business thrive. If they feel they can’t trust you with their needs or questions, you have a real problem. Even if they have a problem with a product, it doesn’t matter: they should have a good experience while they have one with you. You need to address any problems they have quickly and effectively, with courtesy and respect. If you have a bad reputation for poor customer service, it can damage your brand reputation

Having a bad reputation for poor customer service is a serious problem. It can kill your business. It’s also likely to result in bad reviews online, and lost revenue (and revenue from bad reviews). Bad customer service is dangerous for your brand. It’s likely to damage your reputation, at least initially. But, reputations can be repaired, and is simply a case of addressing the issues and improving your customer service – fast. 

Falling foul of regulations

Businesses are subject to all kinds of laws and regulations. This is expected, and it’s necessary. This can include laws that are unclear or that are too broad, or when lots of new regulations are brought in and your company doesn’t make the necessary adjustments to its activities in time. One area that should be avoided at all costs is fraudulent activity. If this is reported against your brand, it can damage your brand reputation, result in fines and legal penalties and cause investors to drop your stock like a hot potato. This is – needless to say – a serious issue for any brand. 

Weak Product Quality

Quality is a very important part of your brand. It’s how customers perceive your product or service, and it’s one of the first things they notice. If your product quality is poor, customers may stop using it and you could end up with a swathe of issues around product liability.  Needless to say, this will damage your brand reputation. It is imperative that products pass quality control tests, that quality standards are met, and that products and services meet expectations. 

Competitor Takes Over Brand Reputation

This is a fairly rare factor, but it does happen. In the case of a major competitor, such as a direct competitor, taking over a large portion of your brand reputation, it’s serious. It can damage your brand reputation and create a significant brand image issue. This can happen in a few ways. The competitor may have a better product or service than you do, or they may have better marketing or pricing strategies. 

Internal Weakness

Internal weaknesses can damage your brand reputation, even if they’re not reported against your brand. If there are weaknesses in your business, products, services or suppliers, customers and investors will eventually see them. They can then decide to walk away, damaging your business. Internal weaknesses can damage your brand reputation, even if they’re not reported against your brand.

Misleading advertising

Misleading advertising can damage a brand’s reputation in several ways. Firstly, it can erode consumer trust in the brand. When consumers feel misled or deceived by a company’s advertising, they are less likely to trust that company in the future. This can lead to a decline in customer loyalty and sales.

Secondly, misleading advertising can lead to legal action. False or misleading advertising is prohibited by law, and companies can be held liable for any harm caused as a result.  This can result in fines, penalties, and legal fees, which can be costly for the company and damaging to its reputation. Greenwashing is a powerful example of this.

Thirdly, misleading advertising can lead to negative publicity, as consumers and media outlets may call out the brand for their deceptive practices. This can further erode consumer trust and lead to a decline in sales. Lastly, it can also cause a company to lose credibility among its peers and within the industry. Companies that engage in misleading advertising are often viewed as less trustworthy and less professional. This can make it more difficult for the company to establish partnerships or gain new business opportunities.

Lack of transparency or honesty in business practices 

When businesses fail to be transparent about their actions, it can damage their brand reputation. This is because customers and potential customers won’t trust the company, and they’ll likely avoid doing business with them. In some cases, this could lead to financial losses for the business. When it comes to being transparent, there are a few key things that businesses should do. 

Firstly, they should disclose all relevant information about the situation – from the details of the contract to the reasons for the termination. Secondly, they should be honest about what happened – whether it was the company’s fault or not. And finally, they should make sure that customers are fully compensated for any damages that were caused. By following these simple guidelines, businesses can ensure that their brand reputation is preserved and that they remain profitable.

Discrimination or unethical behaviour

When companies or individuals engage in discrimination or unethical behaviour, it can damage their brand reputation. This is because customers are likely to associate the brand with these negative experiences, and this could lead to decreased sales. In some cases, customers may even boycott the company or product, which can be extremely damaging. 

It’s important for companies to take measures to prevent discrimination and unethical behaviour from happening. This includes training employees on appropriate conduct, setting policies and procedures that are enforced, and monitoring and disciplining employees who violate these guidelines. By taking these steps, companies can protect their brand reputation and ensure that they remain reputable and trusted partners.

Not staying true to values or value washing 

Values washing, which is the practice of using socially responsible or environmentally friendly language or imagery to promote a product or brand without actually taking meaningful action to support those values, can damage a brand’s reputation by creating mistrust among consumers. If it is discovered that a company is engaging in values washing, it can lead to negative press and a loss of customer loyalty. Additionally, it can be seen as hypocritical, and consumers may question the authenticity of the brand’s other claims. This can lead to long-term damage to the brand and its reputation.

Examples of companies whose brand reputation has been damaged 

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