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The fragility of reputation

Posted by Michael Bloch in ecommerce (Saturday June 19, 2010 )

The old saying goes “good news travels fast, bad news even faster” and in this online age, the former can travel at blistering speed as a major Australian brand recently discovered.

On Thursday, one of Australia’s best known department stores that trades on being rather exclusive was rocked after a complaint of a female marketing executive against the company’s CEO. It appears the CEO behaved inappropriately towards her. It wasn’t a frivolous complaint on the marketing executive’s part as the CEO acknowledged his indiscretion – and promptly quit.

While the exact nature of the complaint was unknown at the time, it and the resulting action had an immediate effect of dropping the company’s share value by 2% by the end of the trading day. How many millions of dollars that represented I have no idea – but all resulting from a single complaint.

While small online business owners don’t usually have to worry about shareholder reactions, it’s just an illustration of how quickly fortunes can be turned through negative publicity or allegations of inappropriate conduct – be it in business dealings or otherwise.

I’m the first one to rubbish the “any publicity is good publicity” spiel, but also scornful of the “customer is always right concept” myth. I’m totally against it – it trains people to be bad customers; but any complaint, be it from a staff member or customer, frivolous or otherwise needs to be treated seriously in order to prevent damage to your reputation.

But there are some complaints you may not even know about. The ones where customers have posted negative feedback everywhere, but failed to tell you there’s a problem. You don’t want to be the last person to know about it, so monitoring your online reputation plays an important role in heading off damage that can occur from those scenarios.


Dealing with aggressive customers


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