A business’ reputation is paramount for its survival. The trust and confidence of the clients directly impact the bottom line. This power is real and it can be felt inside and outside of the digital world. It is difficult if not impossible to conduct business with a bad reputation. Regardless of whether the tarnished brand identity is the result of a public scandal or litigation, you will immediately notice the difference on your balance sheet. Lawsuits, in particular, can cost businesses lots and lots of money. Failing to manage your reputation can hurt your company’s finances. Nevertheless, you could lose more than the annual revenue for your company.
Litigations: What are they and how can they affect your business?
Litigation is the term deployed for defining the proceedings that are initiated between two opposing parties so as to enforce or even defend a legal right. Imagine the following scenario: you are an innocent person, but you have been found guilty of committing an unlawful act, such as a theft crime or DUI. If you are wrongfully convicted, that means that you are punished for something you did not do. Wrongful convictions are what undermine the effectiveness of the criminal justice system and endanger its legitimacy. Getting back on topic, it is not uncommon to face a legal dispute. When this happens, you experience major drawbacks. In addition to the fact that you can possibly lose staggering amounts of money by ignoring the problem, you may face other consequences like:
- Jeopardizing your company’s reputation – People refrain from doing business with a company that is going through hard times. Being charged with a criminal offence affects your honor and reputation. Irrespective of the outcome, you will lose, in the sense that you can lose your corporate reputation. You risk losing a part of your existing customer base and you cannot hope for new customers to reach out to you in their time of need.
- Losing your optimism – It is believed that too much optimism is not at all good for business. Well, too little optimism is not good either. The emotional pressure of the criminal case eventually takes its toll. Among the variety of emotions, mention can be made of remorse, guilt, and despair. You feel ashamed by nature, even if you are not the one to blame. Emotions will surely affect your morale and lead to a less productive work environment. Needless to say, the impact on your psyche is non-negligible.
- Hiring and retention costs skyrocket – Attracting top talent may be impossible and this is because the employer brand matters when it comes down to hiring. Individuals are concerned with job security. Moreover, they are worried that you are not trustworthy. Missing out on great employees can cost your company a lot.
Measuring in what way the litigation has impacted corporate reputation
Until this point, it is clear that litigations can pose a considerable threat to the reputation of an organization. Every action leaves a trace, so it is necessary to determine how much the litigation has affected the reputation of the company. The first thing you need to do is establish your methodology. Literally, tons of data are available, yet you have to verify the integrity of the information that you obtain. You are perfectly fine using Google Analytics. Other sources of relevant data include but are not limited to social statistics from your social media accounts and statistics coming from your network.
Next, extract the data and analyze the numbers. If the traffic experiences negative variations, you have reason to be worried. What is currently happening to you has negatively impacted the reputation of the company. What you need to do now is identify the changes in thoughts and perceptions and adapt your message and communication accordingly. Reputation is an intangible asset, meaning that you cannot afford to lose it. Mass media has the potential to act as a powerful influence with regard to corporate reputation. If the information gets in the media, it will spread faster than the truth.
Minimize the impact of litigations on your business
The good news is that there are things you can do to improve the outcome of the emergency situation. Problems can arise just like that. As an entrepreneur, you are responsible for defending yourself from a lawsuit. Use these tips and protect your business.
Hire a lawyer
Let us say that you have been accused of committing a crime such as driving under the influence. You were not intoxicated on a substance, but you were still charged with a crime. If you plead guilty, you no longer have a lawsuit on your hands. However, why should you admit guilt when you are not to blame? You performed well on the sobriety test and the results from the breathalyzer are not against you. The police officer must have been mistaken. Hire a criminal lawyer to represent you in the legal dispute. While you cannot control when you will be convicted, you can influence the outcome of the situation. The legal professional will speak on your behalf, review the prosecutor’s evidence, and do some investigation concerning your situation. You have guarantee that the case will be dismissed or the charges will be reduced. The role of the criminal defense lawyer is to protect your rights. The earlier you get in touch with an experienced attorney, the better.
Carefully balance your response
If you have been accused of something you have not done, confront the situation calmly and directly. You try to do your best and make decisions that are fair, taking into account other people’s interests, but there will be individuals who react to baseless accusations. Besides the legal response, focus your attention on the response you have to provide for the public. When a crisis hits, you have to prepare a statement. Not commenting the situation is not a good idea. The audience needs an explanation and you have no choice but to meet its needs.
Answer to negative media coverage
The fact that news media has a considerable effect on corporate reputation does not really come as a surprise. People believe what they are told and if the news comes from mass media, they do not even question its validity. What do you do if a high percentage of media coverage is negative? If negative stories are published, fight back. Provide evidence to demonstrate your innocence and appoint a spokesperson to deal with the queries. This is the best course of action. As far as the criminal offences are concerned, your lawyer will make sure you are not convicted and that your reputation will not be irremediably affected.