How a company's reputation affects the decision to buy

A company's reputation is one of the most important factors that influences the decision to buy goods and services. Consumers have wide access to information, and they can easily assess a company's reputation based on reviews, ratings, news, and social media. In this article, we will look at how a company's reputation affects their purchase decision.

The consumer's journey

In order to assess the impact of reputation on the purchase decision journey, it's worth looking at the basic steps of this process and the concept of CDJ. Behind the words of the press ekspert portal Rivne. Consumer Decision Journey (CDJ) is a model that describes the path that a potential buyer takes from awareness of a need to the actual purchase of a product or service. This model was developed by McKinsey & Company and has become one of the most common models in marketing. CDJ consists of the following steps:

• awareness of the need;
• information search;
• evaluation of alternatives;
• decision to buy;
• re-buyer and disseminator of information.

The information search and evaluation of alternatives stages are of particular importance, because during these stages the consumer gathers information from various sources, such as the Internet, stores, friends and acquaintances, and also reads reviews from other users. After purchasing a product or service, the consumer may become a repeat customer if their experience has been positive. In this case, he can spread information about the product or service, which can lead to increased sales. Starting from the stages of awareness of the need and search for information the company's reputation can already work to attract the customer's attention and increase his loyalty to the brand. Researchers distinguish three levels of brand awareness:

1. The highest level, called "Top of mind" when a brand comes to a consumer's mind first when listing the brands of one industry.
2. "Spontaneous Familiarity" when a consumer recalls a brand name but names a different brand the first time it is mentioned.
3. "Induced Familiarity" when the consumer recalls a brand only when prompted by the name.

During the need awareness and information seeking phase, it is possible to draw the user's attention to the brand through positive feedback from the audience on major industry forums and in social media communities appropriate to the topic. In forums users quite often ask participants to recommend a certain product or brand, help with product selection, share their opinions. Distribution of positive articles, video reviews of your products also contributes to the growth of knowledge about your brand. Search engine cues are also worth working with for the purpose of recognition. When a user enters a search query, the system can recommend the brand that users most often ask for when they access the search engine.

Working with reviews

According to data collected by Yandex 2022, product reviews play an important role in the buying process. The majority of online shoppers - 96% evaluate reviews before making a purchase. It's important to note that reviews are taken from at least four sources, and more than 79% of users compare reviews across multiple sites. Lack of reviews for a product or service also puts a buyer on guard. Reviews can be varied: the brand, the store, the product, and the materials used to make it. Another study found that 94 percent say a negative online review convinced them not to buy. Below is data from another study published in 2023:

• 83% trust online customer recommendations and reviews more than classic advertising.
• 86% of users are willing to pay more for a company with a higher rating, positive reputation and testimonials.
• 84% of marketers agree that building consumer trust will be the primary goal of marketing in the near future.

A negative reputation or lack thereof is highly likely to discourage a user from making a purchase.

Dealing with the customer after the purchase

Working with customers after they buy a product is just as important as working with them before they buy. More than 87% of people are willing to write a review about a business and share a positive experience with a brand, so motivating a loyal audience to spread the positive experience is especially important. The Net Promoter Score (NPS) can be used to measure user loyalty and understand the number of brand advocates. It is calculated based on an audience survey where users rate their willingness to recommend a product or service to their friends and acquaintances on a 10-point scale. NPS = % of promoters (supporters) - % of critics. If the user has shared a good buying experience, it's important to respond to the mention on behalf of the brand. You don't have to limit yourself to formal thank-yous for choosing a company; you can add more emotion to the dialogue with the customer. At the repeat buyer stage, companies should also respond to comments and level out negative experiences, understand the reasons for negativity and take steps to address them. In conjunction with the NPS indicator is also often used Customer Satisfaction Index (CSI), which allows you to identify the most important parameters for customers. This is especially true when the NPS drops. The CSI helps to determine what the company should pay attention to, what to improve and develop, and what can be left unchanged. Of course, the current problem can be collected by analyzing negative feedback. But the satisfaction index will allow to do it in a more systematic way. Satisfaction index helps to understand whether customers are satisfied with products or services; how customers rate the level of service of your company and how their attitude changes after introducing changes or conducting training for staff. CSI can be used to analyze customer experience in both b2c and b2b business segments.

Increase conversion into sales

A company's reputation affects the effectiveness of all advertising tools a company uses to attract new customers. Online reputation is influenced by a wide range of information:

• Availability of reviews on review sites
• Ratings on major top sites and geoservices
• the situation in search results for branded queries
• The company's reaction to negative and positive mentions on the web
• Mass media publications and blog articles about the brand
• Availability of reviews of goods and services
• Activity of the company and its influencers (promoters) in social networks

At each stage of decision making different tools work based on the sources of information which can influence it. 1) At the stage of awareness of the need and search for information about the product the following tools work. 2) At the stage of comparison and evaluation of alternatives, the following tools work. 3) At the stage when the user has made a purchase and is ready to share his opinion about it the following tools will work. First of all the brand needs to analyze the current situation - whether there is enough information about the brand on the Internet, what kind of information, what kind of tone dominates, what reasons for discontent appear in the network. On the basis of determining the problems of the brand image, it is necessary to choose the most appropriate tools. If there is not enough information about the company or low recognition, it is worth first of all:

1. Register company cards on the main resources-recalls.
2. Encourage the audience to spread positive reviews and video reviews of the product. This can be done, for example, by giving users a promo code, a gift from the company, a discount on the next purchase, etc.
3. Place articles in media outlets and blogs, and set up collaborations with bloggers and other companies. Highlight the main benefits of the product and tell your audience about them.
4. Involve influencers in spreading the word about the brand on industry-specific online resources. You can use Brand Analytics to find the most appropriate resources.

Here are the key steps in making a buying decision and a description of tools to help build a positive brand reputation. To illustrate this, let's look at a case study from our practice. We were approached by a client who is actively developing a chain of fast food restaurants with points of presence in more than 50 cities. At the start-up stage the following problems in the area of the company's reputation were discovered:

• An increase in the number of negative reviews on geoservices.
• The need for monthly registration of new branches.
• Average rating in Google geoservices lower than competitors.
• A strategy was developed to work through these areas, which included the following blocks.
• Monthly synchronization of all restaurant data with information in Google geoservices.
• Adding useful information to the cards: addresses, opening hours, availability of Wi-Fi, at least 5 photos of the interior, facades, etc.
• Prompt posting of the company's answers to negative reviews.
• Email distribution to the loyal client base with the offer to leave a review in exchange for a promo code.

According to the results of the works the number of visits to the client's cards increased by 3.6 times, which means that the top of the sales funnel of this channel was considerably widened.

Conclusion

A company's reputation is one of the main factors that influences the purchase decision. It is important to work on image and build a positive brand image at every stage of the user's journey through the CDJ. Companies that take care of their reputation can gain an edge in the marketplace and increase their sales and customer loyalty. Brand image affects the effectiveness of investment in all advertising channels of attraction. Therefore, a reputation management strategy should be a key element in the business plan of any company that seeks to maintain and increase its success in the long run.