Difference Between Reputation and Brand

Much has been written about “brand” and “reputation”, but these two terms should never be used interchangeably. In a recent study, Hill+Knowlton Strategies compared usage of these terms by analyzing over 150,000 recent interviews on corporate reputation and brand.

What is Brand?

The survey’s analysts defined brand as “the sum of perceptions, held primarily by a company’s current and potential customers or clients, about a company’s specific product, service, or line of products or services.” These perceptions are driven by what a customer or client hopes to gain from doing business with the company, as clients are directly affected by the company’s brand. By doing business with a company branded as a price leader, customers recognize they are more likely to save money. In short, brand is about me.

What is Reputation?

Based on survey results, researchers defined reputation as “the sum of perceptions about a company’s corporate actions held by the public in the areas where the company operates.” When a customer considers a company’s reputation, he or she is going beyond how he or she will benefit from a purchase and also considering how others will benefit. Consumers are considering a company’s reputation when choosing to purchase goods from an environmentally-friendly organization over one that has not made the same commitment to environment sustainability. Reputation, therefore, is about us.

How do the two work together?

A company’s success is influenced by both, with a positive or negative brand often influencing reputation and vice versa. Hill+Knowlton Strategies provides Apple as an example, stating that if Apple makes great iPhones, the company is probably making good reputation choices. While a positive brand image can cause customers to assume a positive reputation, the inverse is not true. Customers will not purchase a sub-par product just because the manufacturer prioritizes community service. Reputation, then, is best used as a way for companies to differentiate themselves from other organizations with the same brand. This point is especially true during a crisis.

How Reputation Impacts Your Business

Consider BP’s reputation crisis during the 2010 oil spill. Many Americans called for BP boycotts and sales took a hit despite the fact that BP was still selling the same fuel it was selling before the crisis. In essence, BP’s negative reputation caused consumers to perceive BP’s brand differently.

Reputation is also important for brands that are not experiencing a crisis. When a consumer is trying to decide between two restaurants with similar brands (for example, two Tex-Mex restaurants with similar dishes and equivalent prices), they might choose one over the other based on each restaurant’s online review scores. Similarly, a customer evaluating two financial investment firms with similar brands is likely to type each company’s name into Google and see what shows up on the first page. Complaints from former customers or employees and SEC actions could all cause a consumer to look elsewhere whereas positive mentions from organizations such as Inc. Magazine or Financial Advisor Magazine will improve the consumer’s perception of that brand.

Key Takeaways

Consumers believe that brand is about “me” while reputation is about “us”, meaning that they are more likely to consider brand when making purchasing decisions. Reputation, however, can influence a customer’s perception of the company’s brand. As more and more consumers turn to the internet for information about a company’s reputation, the link between brand and reputation becomes more important. Businesses must act quickly during a crisis to minimize online reputation damage and collateral damage to its brand. They should also be continuously monitoring their reputation on social media, online review sites, forums, and in Google search results to ensure that their online reputations do not undermine their brands.

Read more: Value of Corporate Reputation as an Intangible Asset