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How public relations contributes to business success
Public relations manages reputation through media coverage and stakeholder engagement. PR is all about maintaining positive relationships with anyone who comes into contact with your company or brand. Done right by a qualified practitioner, this means it can generate extraordinary positive results for your business. This is because PR is about influencing both internal and external stakeholders to say good things about you, your company and its product or services.
Given that a stakeholder is anyone who comes into contact with you at all possible touchpoints, good PR is critical to your financial success.
This blog will show how having a good reputation will help you outperform rivals, attract higher quality staff, and recover from crises.
What is reputation?
Reputation is based on performance, behaviour and communication.
Performance pertains to the quality of a product or service, behaviour encompasses CSR, honesty and employee behaviour, while communication must be authentic, values-based and ethical.
According to Nitin Mantri, the CEO of AvianWE and a global comms expert, the six keys to an excellent corporate reputation are:
- Retaining the customer’s trust
- Consistently innovating
- Happy employees
- An able and respected management team
- Social responsibility
- Continuous engagement
The drive to be a purpose-driven organisation doing something for the greater good is currently the number-one trend in reputation management, according to Tony Langham, the founder and chairman of Lansons Communications.
Companies, organisations and governments around the world are trying hard to convince their customers, their staff and society at large that their very existence benefits everybody.
Only too often, companies try to define their societal contribution via grandstanding ‘purpose’ statements; or mission and vision statements that err on the side of optimistic. To put it politely.
The key to creating and retaining a great reputation is authenticity. Do what you say you do. Produce to the quality standards that you or your industry’s regulators set. Ensure that all your communications are targeted at the right audiences and that what you say is evidence-based and stress-tested.
Why is reputation important?
Reputation is based on how your stakeholders perceive you or your company. As such, it is an intangible concept. But it is a strategic asset that can make or break your business.
Reputation gauges the degree of trust that consumers, clients, the marketplace, and the industry as a whole have in your brand.
A good reputation will help you drive sales and profits, facilitate growth and ensure stakeholder support in a time of crisis.
Building a good reputation is not easy. It can take years of effort, time and patience to create and just one mistake to kill it off overnight.
As part of the reputation building process, you need to know whose trust and respect you need to attain. This is where stakeholder mapping comes in.
Stakeholder mapping: a quick guide to what it involves
Stakeholders include anyone who comes into contact with your business, product or service at any stage of the customer journey. This includes pre-sales and post-sales and, increasingly, the general public. It also encompasses your employees, which is why internal communications plans are so important.
To identify your stakeholders, you need to carry out a process known as stakeholder mapping, and this is a core function of an experienced PR practitioner.
The first step is to identify all individuals, groups, and public or private organisations that could affect your corporate reputation positively or negatively.
One of the best ways to kickstart stakeholder identification is to consider:
- Who is affected positively and negatively by your company or its products and services?
- Who has the power to make you succeed (or fail)?
- Who are your suppliers?
- Who are the end-users?
- Who has influence over other stakeholders?
- Who could solve potential problems with your company?
- Who has specialist skills – internal and external – that are crucial to your business success?
Depending on your line of business, there may be specialist individuals or groups that you need to consider, such as industry regulators, local authorities, professional membership organisations, MPs and recruitment agencies that you need to include on your list.
Once you’ve identified your stakeholders, you’ll need to analyse them to place them into appropriate groups. This will help you develop the appropriate content and tone for communicating with each of those groups throughout any campaign.
The benefits of identifying your stakeholders and properly analysing them is that:
- By brainstorming with them, you’ll improve the quality and relevance of your communications because the stakeholders can give you vital information and make sure you don’t miss anything important.
- You can avoid delays by making stakeholders supporters rather than obstacles to getting approval.
- Supporters could provide you with extra resources for your campaign.
How can PR help me engage with internal and external stakeholders?
Once you’ve identified and analysed your stakeholders, your PR practitioner has a critical role to play in helping you determine your ‘purpose’. Purpose is increasingly important, and it is a nuanced word these days. Put simply, purpose is a combination of ‘mission’ – which is based on objectives and a company’s approach to achieving those objectives – and ‘vision’ which is about its desired future state.
Once these ‘goals’ are known, and only then, it will be possible to build a public relations strategy aligned to corporate purpose.
Because only people can realise purpose, you’ll see just how important it is that this ‘purpose’ is communicated to everyone involved in achieving it.
- External relations. The PR function within an organisation, or its PR agency, is uniquely placed to understand both the company’s internal workings and its purpose and the needs and desires of its external stakeholders. PR professionals bridge the potential gap from within a company to outside – to anyone who could play a role in influencing corporate success or failure. And because they are in regular contact with external stakeholders, they can inform the organisation about how the company, its products or its actions are being perceived. This is vital information that informs management about any changes that need to be made. Business owners who think they know best and ignore the views of stakeholders or society at large make themselves highly vulnerable to reputational and business failure.
- Internal relations. You could argue that no one knows a company better than its employees. You can be certain that every staff member will have a view about the management team’s competency, how they are treated, specific working practices – what’s good and what’s not. They will have an innate sense of what they believe a company stands for. Whether management agrees with their views or not, the bosses would be naïve to ignore what their employees think. These people are well connected. They will talk to family and friends, their colleagues, the wider business community – the list is endless. This is why having an effective – and honest – method of communicating with your staff is an absolute must. They are your principal brand ambassadors.
There are various ways that PR professionals help with your external and internal stakeholder management. The main one is communication. They know and understand the importance of opening up lines of communication so that everyone is working to the same ‘purpose’.
Through ongoing research and skilled objective analysis, your PR adviser will devise and adapt communications strategies and tactics that resonate positively with your target audiences.
There are many tactics they will deploy, including:
- Status update
- Press releases
- White papers
- Social media
The mix of these methods will depend on the needs of your stakeholders.
How can public relations help improve my reputation?
For a public relations strategy to be successful, it must be ethical and authentic.
This means that the company that it is looking to ‘promote’ is itself values-driven, with ‘purpose’ and that it conducts itself honestly and ethically in its dealings with external and internal stakeholders.
Then PR steps in to mobilise the support of all the various stakeholders by communicating the purpose, values and objectives of the CEO and the organisation as a whole so that they are understood. PR is not simply about passing on and disseminating information; it is designed to influence attitudes, opinions and, ultimately, behaviours.
Here’s how PR will help you improve your personal or organisational reputation:
- Identify, analyse and listen to stakeholders internally and externally so that your company’s purpose is perceived as mutually beneficial.
- Communicate sensitively with stakeholders and employees so that they know their views are heard and valued.
- Identify and advise on critical issues and risks for an organisation through an acute awareness of emerging industry or societal issues.
- Understanding and communicating a company’s core tangible and intangible assets.
- Identifying opportunities.
- Operating in a connected world, helping the organisation to understand its place and its value, whether that be on a local, national or international level and across global diversity in values and beliefs.
How does this translate into business success?
You may think this is about KPIs, performance measurement, analytics and ROI. And it is – up to a point.
The PR industry has struggled for decades to develop a reliable method of convincing CFOs they are getting value for money, and we will be looking into this in a separate blog.
But consider this: which companies continually outperform their rivals, generate year-on-year sales and profit increases, value creation and the ability to attract the best-qualified people?
Yep, you guessed it: those with the best reputation.
According to the latest BMAC (Britain’s Most Admired Companies) survey, these are some of the most respected companies in the UK: Tesco, Amazon, and Admiral.
And this is how reputation translated into financial success for these companies:
- Tesco recorded a 28.7 per cent in pre-tax profits for the year to 29 August 2020.
- Net sales at Amazon increased by 38 per cent to $386.1 billion, compared with $280.5 billion in 2019. Excluding the $1.4 billion favourable impact from year-on-year changes in foreign exchange rates throughout the year, net sales increased 37 per cent compared with 2019.
- Admiral’s pre-tax profits for the year to 31 December 2020 rose 20 per cent to £608.2 million, up from £505.1 million in 2019.
Of course, 2020 was a year unlike any other, and many of the UK’s most admired companies didn’t necessarily see better financial results. However, what is proven is that those held in the best regard are also those most likely to recover after crises such as the Covid pandemic.