A soft factor or a real asset? What does a good reputation mean for a company?
Joachim Albers: Nowadays, image, brand strength and customer confidence play a huge role in a company's success, particularly in the consumer goods sector. On the other hand, a company's capital assets suffer quickly if its image is tarnished. A company loses customers, its revenue is reduced, the share price falls, its reputation as an attractive employer suffers. This is how an image crisis can have an adverse effect on a company's financial success in the long term. Consequently, in many companies today, reputation management is no longer just a job for the communications department, but is also attracting more and more attention at senior management levels as a core task for everyone
What kinds of incident can damage a company's reputation?
The list is long and it's constantly getting longer as society's moral standards change. Corruption, defective products, advertising mishaps, suppliers who use child labor, discrimination, management scandals, bad emergency management in the event of accidents - these things can all build up to a crisis. The important thing is that a company reacts professionally, appropriately and honestly, and uses this to try and contain the crisis. And this is an area in which many companies require competent support.
But most companies have their own PR professionals, don't they?
That's correct. But luckily, the everyday business of most firms isn't governed by global waves of anger on the Internet or media law disputes. And a global PR network is far from par for the course at many companies. Because of this, a company needs specialized advisors in crisis situations who know how to judge whether or not you need to react to a storm right away, whether it's better just to let it pass of its own accord, or, for instance, how best to react to accusations made in a country's local media. We cover the costs of this sort of professional advice as part of this new insurance cover.