In today’s digital world, online reviews can have a big impact on business: 89% of people say that reviews influence their purchasing decisions, and almost 75% claim they would be likely not to do business with a company if they found negative information about them online.
According to insurer Zurich’s latest SME Risk Index survey, 77% of SMEs now view having a good online reputation as important to their business, and 41% feel it will become even more important over the coming year.
Despite this, many SMEs admit they do not monitor what is being said about them online – which could be creating a dangerous blind spot, Zurich warned.
“Over the last five years, business reputation has become one of the top concerns for SMEs. Historically, that’s been from word of mouth, or by direct customer feedback, but the emerging risk is the online profile,” John Taylor, practice and proposition underwriting analyst at Zurich, told Insurance Business.
While a simple Google search can reveal how quickly and easily a social media post can ruin a company’s reputation, many small businesses misunderstand what their online reputation fundamentally is.
“SMEs in particular tend to think about their online presence as being their website and their social media pages, which they control the content of,” Taylor began. “But what they’re not thinking as much about is the aspects they can’t control, which can come through review sites or other people’s posts on social media. There are a number of different areas on the internet that they may have no view of, and certainly no control over.”
With the overwhelming majority of consumers stating that online reviews can and do influence their purchasing decisions, there is clear potential for a poor online reputation to impact an SME’s bottom line.
Zurich’s SME proposition includes free access to leading online reputation management provider, Reputation.com. The service enables customers to track the position of their online reputation, benchmark it against similar organisations, and understand what actions are needed to improve it.
“This is something quite basic but very important – for a small business that doesn’t have a dedicated employee or team looking after this, and probably can’t afford one, this gives them a new lens to look at their online reputational risk from,” Mike Green, underwriting manager in Zurich’s commercial practice proposition, commented.
“What we are trying to do is give SMEs some help in the short-term to manage this risk. From manufacturers to shops, restaurants and offices, these days, they all have an online reputation to manage – whether they like it or not, and whether they know about it or not,” Green explained.
Brokers too are instrumental in adding valuable risk management advice on reputational risk, and should ensure they are highlighting the issue to clients.
“Brokers should be asking customers how they are managing their online reputation, whether they are aware of their reputation profile, and what risk management tools they have currently to mitigate that,” commented Taylor.
He added: “We recognise that our SMEs are very busy, and that they have a number of different business priorities, but this is one emerging aspect that, as an insurance company, we recognise as extremely important, and want to deliver a tangible solution for.”
Source: Insurance Business Magazine
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