As Forrester opines, we are currently in the “Age of the Customer”, whereby every initiative and business decision should be driven with the customer in mind. Much of this thinking and shift in typical, transactional relations is owed due to advancing technologies; changing the power paradigm from organisations to customers. With more information, literally at their fingertips, customers have become more demanding in terms of what they expect online.
With a variety of tangible and intangible factors involved, safeguarding the online reputation of businesses becomes a widespread task. While many are using new technologies to achieve higher profit margins and revenues, fewer companies are succeeding. This is exemplified by the average life span of companies on the S & P 500 Index, which has fallen in recent years to just 18 months. Ensuring success requires consideration of all eventualities including risk.
Digitally focussed: Pope Benedict Inauguration (2005)/ Pope Francis Inauguration (2013)
What risks are centred around these digital trends?
Forrester security and risk expert analyst Nick Hayes identifies “the four V’s” associated with accelerating risk into today’s digital climate. These are broken down into the following:
- Volume: The number of influence impressions put in front of customer
- Visibility: The ease at which public opinion can be widely distributed
- Volatility: The unpredictable impact of consumer’s opinion
- Velocity: The speed of change to brand perceptions
With so many factors at play concerning reputation it’s perhaps unsurprising that we have seen a 461% increase in reputation linked losses in the past five years alone.
Everything is amplified in today’s World
Whether it’s a data breach, security issue, marketing, third party or even financial bug, when reputation is concerned any of these has a risk component attached to it. Both individually and as a whole these actions can impact on an organisations reputation for better or for worse. Given today’s connected culture it’s the intangible assets that can make or break you. Data innovation, intellectual property, employee experience, customer experience and much more; all contribute to how your organisation is perceived.
While many positives can be derived from the wealth of technologies available it’s also imperative to keep a sense of perspective and shift your mentality towards risk when required.
Studies show that a 1% improvement in a firms CX score can translate into an additional profit of $150 million dollars per year. On the flip side, there is also the chance that a 1% decrease can have the reverse effect, an often-neglected perspective. So how do we measure this to improve the likelihood of success and mitigate risk, safeguarding reputation?
Insights driven businesses are faster and fleeter
The most successful organisations are ones that are data and insights driven, actively utilizing the wealth of information available. Experts are forecasting that these companies will grow at a much greater rate than those that aren’t acting upon this available data.
Key to success, is the requirement to be ‘digitally intelligent’ with a business’s online assets. Everything from internal properties and information to workflows and processes should be consistent and mapped, including the touch points with internal and external users. Regarding reputation, you should be thinking about the ways in which you can better evaluate your own interactions as well as the experiences your customers have. Consider:
- Systems of engagement (touch points with people)
- Systems of record (host processes)
- Systems of automation (connect to the physical word)
From these processes, gather and drive risk insights
When we start thinking about common processes and technologies we can start to gather different types of insights. From this you can identify risk factors and produce what Forrester’s Hayes calls, KRIs (Key Risk Indicators), which can be used to balance out your more typical KPIs (Key Performance Indicators).
Whilst continuing to deliver value to customers, you can design digital risk initiatives like the below:
- Establish goals (identify metrics that align)
- Inventory processes
- Create metrics for performance management
- Use metric data as KPIs
- Determine performance thresholds (at which points should you set risk, what is the limit?)
- Report outcomes
- Evaluate and realign as required
By assessing the likelihood of risk, the degree of potential damage to reputation and the frequency of occurrence, you can better understand the measures and scope to put in place.
What we can learn
By parsing out the different types of reputational consequences and costs; you will foster a far greater understanding of what constitutes a risk and how to mitigate it. By finding ways to offer strategic business support for key departments, organizations can efficiently outline causes, put in control contingencies and kick-off key initiatives to manage reputation.
By having effective measures in place to track reputational impact, key risks to reputation are easily identified and handled. Whilst it’s imperative to continue to deliver an exceptional customer experience, remaining cognizant of risk factors can ensure your online reputation remains intact.
This article was taken from a talk with Forrester’s Nick Hayes. You can watch the full talk below.