Willis Towers Watson’s Global Reputational Risk Management Survey found that while businesses often understand the challenges of reputational risk, not everyone has a strategy to assess and mitigate the damaging financial losses.
The first step in creating an effective strategy is understanding the risks so you can reduce them in the first place. Then you need to ensure you have plans in place should you ever find your business trending for all the wrong reasons.
Having a social media presence is likely to be a key component in building your business’s reputation, enabling you to connect with customers in ways that simply are not possible through traditional marketing channels.
As one of the most innovative ways to reach customers, influencer marketing has become an essential element of brand promotion by helping brands tap into an influencer’s own network of followers.
There are many benefits to working with an influencer:
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people trust an influencer more readily than your brand alone. The opinion of an influencer who cares about your sector carries more weight.
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the right influencer can open doors to a ready-made community that is receptive to your product or service.
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with the right partnership, you can engage with followers that your brand might not have been able to reach.
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influencer marketing is comparatively cost-effective if you choose a new or ‘micro influencer’ and provides a quicker response as the endorsement is coming from a trusted source. A good influencer will create relevant, engaging content for your brand too.
When you align your brand to an influencer, you become linked to their lifestyle, opinions, and background, for better or worse – so it pays to pick wisely. Anything the influencer posts, or has posted in the past, could reflect on your brand.
While it takes time, effort and resource to build your reputation, it can be damaged by the actions of an influencer in just moments.
Some brand experts feel that the potential for reputational damage caused by working with influencers that turn out to be a poor match is too great a risk. If an influencer’s behaviours or beliefs become harmful, it can be difficult and time-consuming to extricate your brand from the association.
But understanding the risks means you can manage and mitigate them, just as you would with any business activity.
The reputational risks of working with an influencer:
You can set guidelines for your influencer to follow, but you can’t control their every move. Finding the right influencer fit for your brand takes much research. How does their portfolio of posts and partnerships align with your brand?
An influencer’s followers trust that they share the same values and interests. These fans will be ‘turned off’ if they believe the brand/influencer partnership is not credible and is irrelevant to them.
The influencer you choose must have the right status or position to endorse your brand, for example, a luxury goods brand needs to associate with an influencer who is recognised in that world. Choose unwisely and your audience may become confused at what you stand for.
Before you engage a social media influencer, you need to make sure you have carried out full due diligence.
Firstly, you need to be clear on your company’s brand values so that you can begin to identify influencers that share those values and will promote your product or service with conviction and authenticity.
Assess the risk factors posed by an influencer by delving into their profile and past actions.
This can be time-consuming, but it’s worth the effort and there are tools available to help with the research.
Beware: some key metrics on an influencer’s success, such as follower numbers, can be artificially inflated by buying additional followers, but a good risk assessment will be able to flag these.
“Ensuring that your chosen influencer is authentic and shares your brand values is not a one-off task, it needs to be continually monitored and assessed so that you can build a productive and profitable partnership.”
David Bennett | Global Markets P&C Hub, WTW
Ensuring that your chosen influencer (and their audience) is authentic and shares your brand values is not a one-off task, it needs to be continually monitored and assessed so that you can build a productive and profitable partnership.
Constant vigilance and scrutiny of the process is required.
An effective social media influencer strategy should always include a plan for managing crises and mitigating any potential damage to your brand.
Reputational crisis insurance supports companies by transferring the financial risk from certain reputational crises, such as influencer failures.
Willis Towers Watson’s Reputational Crisis Insurance also includes access to crisis consultants and Polecat, an AI-powered data analysis tool that provides real-time, on-demand reputational data for profile benchmarking.
Understanding your exposure to reputational risk is key to ensuring you put the appropriate mitigation and risk transfer measures in place.
“Our Reputational Risk Readiness Review enables you to define and quantify the reputational risks facing your organisation.”
David Bennett | Global Markets P&C Hub, WTW
Our Reputational Risk Readiness Review enables you to define and quantify the reputational risks facing your organisation.
The review provides the insights you need to understand your risks, so you can make informed judgements on protection and risk/finance decisions.
To book your initial 1-hour free Reputational Risk Readiness Review consultation, or to find out more about our Reputational Crisis Insurance and risk management solution, please get in touch.
