Proactive vs. Reactive Online Reputation Management: What Is Best?

It takes years, even decades, to build a solid brand reputation. Yet, one single negative review is sometimes all it takes to taint a brand’s image and name. This is where online reputation management (ORM) comes in. Companies must have an online reputation management strategy to protect their image and safeguard their bottom line. Further to that, they must choose between proactive ORM vs reactive ORM and long-term ORM vs short-term ORM to reduce reputational risk.

Ninety-eight percent of consumers read online reviews for local businesses, and 94 percent of them avoid a company due to a bad review. This much is clear: One negative review is enough to cause significant damage to a company’s brand reputation. In this case, the company must respond with a reputational damage repair strategy or crisis management plan.

Proactive vs Reactive Online Reputation Management

An online reputation management strategy is becoming more of a necessity than a nice-to-have tactic for businesses. In developing a reputation management plan, companies need to choose between the following:

• Proactive online reputation management (proactive ORM)
• Reactive online reputation management (reactive ORM)

While these approaches vary, they are nonetheless necessary measures. The two ways one can look at them are:

• Proactive ORM reduces but does not eliminate the need for a reactive ORM.
• Reactive ORM is a response to a crisis, the consequences of a failure, or lack of a proactive ORM.

Proactive Online Reputation Management

Proactive reputation management refers to the act of managing reputation early. Its goals are to:

• Enhance brand reputation and strengthen brand loyalty.
• Use ORM as a marketing strategy to attract more customers and increase conversion rates.

Compared to many other digital marketing and advertising strategies, it is relatively cheaper and easier to implement. In addition, enhancing a brand reputation is more manageable than attempting to repair a ruined reputation.

Reactive Online Reputation Management

Brand damage is imminent when a customer shares a negative post, comment or review online. Once it occurs, reactive ORM, which is essentially a crisis management plan, becomes necessary.

Managing reputational risk is less challenging for established brands than for unknown brands. One reason is that they have already built a solid foundation to help them cope. On the other hand, a lesser-known brand may not withstand the backlash.

Long-Term ORM vs Short-Term ORM

In general, a reputation management plan is a long-term reputation management strategy. Keep in mind that besides enhancing brand reputation, attracting more customers and increasing conversions, ORM also aims to prevent the need to repair reputational damage. In preventing disruptions caused by reputational risks, businesses can focus on growth.

Reactive ORM, essentially, is a short-term reputation management strategy. It is a response to a negative situation that has already occurred.

Proponents of proactive ORM can argue that a long-term reputation management strategy is the best approach. For example, positive review generation, a tactic commonly used in ORM, helps a business increase its sales. That is because 80 percent of consumers stated they trust companies with 4-, 4.5- and 5-star ratings.

Still, one should never underestimate the importance of a short-term reputation management strategy. One reason is that many consumers think perfect or near-perfect 5-star ratings are “too good to be true.” For this reason, around 80 percent specifically seek negative reviews. In other words, consumers find brands with a mix of positive and negative reviews more trustworthy.

So while negative reviews help a brand establish trustworthiness, it is also necessary to implement a short-term reputation management strategy – a reputational crisis response.

One more thing about reactive ORM is that how a company responds to a negative review can trigger the service recovery paradox. This phenomenon describes how happier customers are with a brand after resolving their issues. Compared to those who never had problems, these formerly dissatisfied customers are likelier to become loyal.

There is no need for a long-term ORM vs short-term ORM debate as both ORM strategies are necessary.

A proactive online reputation management strategy is essential to enhancing brand image and awareness. Meanwhile, a reactive ORM strategy, besides repairing reputation if necessary, emphasizes authenticity and rebuilds customer trust.

How To Create a Long-Term ORM Plan

These are the two things to consider when creating a proactive or long-term reputation management strategy.

• Monitoring. Ideally, use one of the best online review monitoring tools to track brand mentions. Companies should monitor not only themselves but also the competition.
• Responding. Interacting with reviews is an excellent way to enhance customer engagement and relationships. While replying to positive posts and comments help increase customer loyalty, it is more critical to respond and resolve any complaints.

Here are the five steps on how to create a long-term ORM plan.

Step 1. Monitoring Brand Reputation

Consumers and influencers are among the entities that may talk about a brand online. So regardless of the facts, what matters is whether they are positive or negative. Also, consider which digital channels to monitor. Among the most popular ones are:

• Google
• Facebook
• Twitter
• Instagram
• Yelp

Other digital channels are eCommerce platforms like eBay and Amazon, and travel sites like TripAdvisor. So depending on the type of business, there are many different websites, social networks and review sites.

Monitoring brand mentions let companies gain invaluable insight into what consumers think of their brands. At the same time, they can also get a pulse of how their competitors are doing. They can then use the information to create new marketing plans and adjust or create new products or services, and so on.

Monitoring, though, is not an easy task. Rather than having employees do nothing but check various digital channels all day long, it is better to use a reputation management tool. Typically, these tools use the latest AI technology to search multiple websites and platforms to flag brand mentions.

Step 2. Create Response Plans

So, what can companies do to brand mentions? It depends. A responsible company that provides good products and services will likely receive positive reviews. Yet, problems may occur even if it is not the company’s fault and, therefore, may also get negative reviews. Considering that non-response to social media comments can lead to a 15 percent increase in churn rate, it is a must for companies to respond.

A positive social media interaction results in the following:

• More likely to buy from a brand (78 percent).
• Choose the brand over others (77 percent).
• Remember the brand (76 percent).
• Increase their spending with the brand (72 percent).
• Develop a stronger bond with the brand (70 percent).

A customer service representative can be in charge of responding to positive brand mentions. But for negative reviews, things are somewhat different. One thing for sure, though, is that the person responding must have received proper training.

A typical plan of action looks like this:

1. Acknowledge the issue.
2. Apologize and empathize.
3. Take responsibility.
4. If necessary, provide an explanation.
5. Invite the complainant to discuss the matter offline.
6. Resolve the issue.
7. Compensate the complainant.

Besides identifying the person in charge of responding, the response plan should include a template to standardize the processes involved.

Step 3. Turn Complaints Into an Advantage

Online reviews are public, which means anyone can see them at any time. As alluded to earlier, companies can use a negative review as an ORM strategy, turning unhappy customers into loyal customers.

Customers expect quick responses and solutions to their issues. But companies can go beyond this by exceeding expectations. So, aside from timely service, they can also offer compensation. For example, a company can offer gifts or discounts on subsequent purchases to compensate for the inconvenience.

On the part of the customers, the extra effort can make quite an impression, so much so that they become more than loyal customers. In addition, they might become brand ambassadors, sharing their positive experiences with their network.

After resolving an issue, the company can reply to the negative review again, thanking the customer and, more importantly, subtly adding the solution provided. This way, other people who come upon the negative review would also see the response and the resolution, and trust the company more, seeing how it responsibly resolves problems.

Properly handling a negative review not only adds to brand authenticity and transparency, it also becomes a showcase of the high level of customer service. These posts, in effect, become powerful marketing messages that persuade consumers to buy.

Step 4. Capitalize on the Positives

Responding and interacting with customers who have left positive comments and reviews is already a great start. But companies can do more to derive the most benefits.

According to Bazaarvoice, some 37 percent of social media users trust other users, while only seven percent trust celebrities. Such being the case, companies can repurpose positive reviews. One way to do that is using them as testimonials on product or service pages. Another way is to include them in email newsletters.

While still on the topic of using reviews as testimonials, one of the hottest trends now in ORM and digital marketing is video testimonials. These videos – explainers, tutorials, etc. – effectively increase conversion rates. According to Wyzowl, two out of three or 77 percent of consumers are more likely to buy after watching a testimonial video that shows how a product or service helped another person.

Step 5. Measure the Results and Make Adjustments

An online reputation management strategy – proactive or reactive – is dynamic. In other words, reputational risk specialists may need to tweak a plan from time to time or sometimes change to a completely different one depending on the circumstances. One reason for that is fine-tuning a specific strategy for the target customers. Another is in response to changing market conditions and competitors.

But before making any decisions or applying changes, reputational risk managers need to see performance metrics. Social media platforms, for instance, provide a glimpse of analytics. However, the most comprehensive data collection and analysis are usually through ORM software tools.

Final Words on Proactive vs. Reactive ORM

It is impossible to 100 percent avoid brand damage. But by adopting solid reputation management strategies, companies can at least mitigate the risks.

Between the two approaches – proactive and reactive ORM – one is not necessarily better than the other because they vary in purposes.

Gathering positive reviews – a proactive ORM strategy – helps a company enhance its brand reputation. But without negative reviews, the brand may come across as dubious to consumers.

For reviews to be trustworthy, they must also have some negative reviews mixed in. But each of them needs to be handled properly, which is where reactive ORM comes in.

Rather than debating whether proactive ORM or reactive ORM is better, think of them more in terms of symbiosis. If you want to learn more about how these two ORM approaches can boost your brand reputation and sales, call 866.325.0303 to contact us so our reputational risk manager can answer all your questions.