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Reputation Capital: How to Measure the Value of Your Brand?

Kevin James Curran
Dec 31, 2022 4:53:11 PM

Have you ever wondered how new companies find investors?


The reputation of a company or individual can help build long-term value that spills over into new companies or ventures they are involved in. This is known as reputation capital. 


Those with positive ratings grab more audience attention and market value. Such brands are trusted by their customers, and there is a spike in products and services sold out. There is dwelling trust in the market that such brands would be able to deliver more authentic services, more brand value, and higher earnings.


In the era in which market value is based on characteristics like brand equity, goodwill, intellectual capital, and anything that can make or damage the reputation of any organization.


Many companies do an exceptional job of managing their online reputation and what risks are held by consistently monitoring the value of their brand.


In this article, we have rounded up a pathway by which reputation capital can be measured.


How to Measure Reputation Capital?


Reputation capital can be measured by the total net value of all corporate characteristics comprising; business chain, brand ethics, sustainability, transparency, and safety of the services. These are all factors outside of "tangible assets".


If any brand holds a positive reputation, it will help increase the growth and value of any organization. With a positive brand reputation, you will have more sales, market value, and investors.


Let's look at some vital points to measure reputation capital.


1.    Ethical Decisions


If you want to build positive reputation capital, an ideal way is to consider ethical business decisions. 


An example of an ethical company includes Toms, the footwear apparel company. The unique thing about Toms is that they built their entire brand around a commitment to social and environmental philanthropy. Every time a client purchases a pair of Toms, they are aware that proceeds will go to help the less fortunate.


You have to ensure that an order is delivered when it is promised. If you cannot meet the deadline, convey it to the client or refund it. Remember ethics while building the value of your brand. This step holds a keen role in the growth of your business.

Toms grass roots mission

2.    Social Cause


Make sure that social cause is correlated with reputation capital. You can consider supporting a social cause that is in line with your company’s goals. It would keep the notion of positive social impact alive and spark the value of your brand. 


An example includes Wells Fargo, which donates 1.5% of its revenue every year to charity. Over 14,500 schools and non-profits received the proceeds, which supported community resilience, revitalization, and economic growth. This went a long way to boost their reputation capital after scandals have plagued them over recent years.


Even if your contribution is small, the reward of positive customer and investor feedback will be invaluable. That way, not only does reputation capital improve, positive dealing with customers makes things convenient for buyers, and they would trust your brand more.

Wells Fargo Charitable giving

3. Transparency


In recent times, it has become more evident than ever that transparency is a key to a successful and emerging business. The more insight a customer or investor can gain into a company before making a decision, the more comfortable and easier that decision will be. 


The visibility through the entire process enhances the long-term value of a brand. In contrast, limited transparency poses a reputation risk and reduces business growth. The advantages of transparency are concise. The brands opting for transparency attract more attention from the audience and spiking value than those neglecting transparency in their supply chain.


An example of good business transparency in action is Trustpilot. In 2019, Trustpilot launched its transparency report that gives companies and investors insight into how their review fraud detection software works, how many reviews they have removed, and what happens when a company flags a review.

Trustpilot transparency reports

4.    Employee Morale


The excellent reputation of any organization is necessary for developing the career path of employees working under their umbrella. Employees expect companies to let them know they are working hard and are appreciated. When any brand increases its value, it leads to employees' satisfaction, and they would perform their job more enthusiastically. 


If any organization lacks a good reputation, people will try to leave that place, which significantly reduces employee morale.


Technology giant IBM established an open-door policy to give their employees a better way to raise questions or concerns to management. IBM also gives employees the ability to send reports and speak confidentiality directly to management. This has proven to be an employee morale booster and decrease turnover across the entire company over the past several years. 

IBM Employee Morale

5.    Sustainability


Reputation capital is the most vital commodity of any business. Sustainability in anything is essential for the growth of any brand, and you must pay attention to this keen factor in building the value of your brand. It is evident that any organization with a sustained reputation attracts the attraction of an audience, holds positive customer reviews, and builds long-term interaction with clients.


The furniture giant IKEA practices several sustainability initiatives including solar power, getting all of their wood from sustainable forests, and minimizing water pollution through organic farming practices. 

IKEA Sustainability Report

Reputation Capital In Action


One of the most notable examples of reputation capital includes the trials and tribulations of Elon Musk. Even after making many questionable decisions that have put his companies in the crosshairs, such as getting high on The Joe Rogan Experience, troubles with the SEC, or almost losing all of his money launching SpaceX, Elon always has investors willing to give him money. 


Elon Must Getting High on JRE


Paypal has initially voted the worst business concept of the year before finding success. After bringing several companies to profitability against all odds, Elon Musk has built a personal brand that commands respect. Investors and banks are always willing to fund his next project, and customers are willing to support him by purchasing gag gifts like a flare thrower or Burnt Hair fragrances.  


The Take-Away


Reputation capital is the ability of your organization to build trust amongst customers, lenders, and investors with the positive actions you have displayed in the past. Now, it is the need of the hour to build the value of your brand and takes a keen interest in attracting more audience. 


Reputation capital can be positive, which can take your business to sustainability or crash it in case of imminent reputation risks. In this article, you will find how you can measure the value of your brand and its correlated factors.  

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