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LOOQME Blog

Reputational risk and how to manage it

Marketing and PR Reputation
Every company, regardless of structure, nature or size, faces risk factors that can damage its reputation.

Reputation has become much more vulnerable to risk factors with the development of the digital environment and social media. While the speed of information dissemination is much higher and the possibilities of the online environment are unlimited, there is no control over user content.

Any negative post or story as well as an inconsiderate comment from the top management can trigger a chain reaction and damage the reputation. As an example, let us take a look at the recent situation with the former marketing director of Fozzy Group, Vyacheslav Baransky, whose stories caused outrage and public condemnation. This situation has had consequences not only for him personally but has also undermined the company's reputation.

The company's damaged reputation results in lower revenues which can lead to failure to meet key business objectives, loss of market share, lower shareholder value, and, in some cases, financial insolvency or bankruptcy.

What is a reputational risk?


Reputational risk is a potential or existing threat in which certain circumstances or events may adversely affect the health of a brand and its position in the market.

Reputational risk resembles a dandelion blowball. If the wind touches it, its particles instantly disperse in different directions and it is no longer possible to put them together. The situation is similar with reputation. If the X-factor comes into play, the potential reputational risk will quickly become real and will manifest itself through all channels of communication.


We are a little luckier than dandelions because LOOQME monitoring can collect all the particles (mentions) that have spread in the media and social networks and assess their impact on the situation. LOOQME can analyze whether the amount of negative mentions decreases or increases and pinpoint the media and the authors who write about it the most.

How to minimize reputational risk


Identify the expectations of stakeholders and try to meet them

When you understand your customers’ expectations, it is much easier to live up to them. Avoid setting unrealistic expectations by making promises you cannot fulfill. This will only work against you.

We should not underestimate the negativity emanating from the users. There is an option to set up alerts for negative tracking in the LOOQME hub, which will notify you in advance about possible threats in the info space.

As soon as your news is marked as negative, you will receive a notification by mail, Telegram or Slack.

Measure brand reputation

Reputation metrics Z-index allows you to assess the level of trust in the company and its recognition in the media space.

Z-index combines data from media activity and sociological research and allows you to compare your company's performance to other market players. Learn more about Z-index.

Focus on positive communication

Reputation strengthening is a non-stop process. Just like a living organism, reputation accumulates everything that it gets from the information environment - both negative and positive. It is not possible to fully protect yourself from the negative mentions, but you can increase the positive ones.


One thing you can do is inform customers, partners, and employees about important news in the company. Tell about changes, show how you react to situations in the organization or the environment. Do not hesitate to own up to your mistakes. React to positive comments and feedback with as much enthusiasm as to the negative ones.

Incorporate reputational risk into strategy and planning

Investigate the company's weaknesses and identify the factors that pose the greatest threat. Organize a brainstorming session of potential scenarios that could harm public perception at various levels.

Define metrics and alerts for each reputation attribute so that you know when to start acting. For example, customer complaints about the cleanliness of hotel rooms suggest that service standards call for improvement unless you want to lose reputation.

Create a contingency plan

If push comes to shove, you need to react quickly and rationally. The "quick" and "rational" components are equally important, as by neglecting either one, you can compromise company’s reputation even further.

To prevent this from happening, create a plan or outline several scenarios for the most typical crises in your industry. Without effective reputation management, an organization can take a long time to recover from even a minor incident.

Effective reputation risk management is essential for maintaining positive customer relationships, sustaining brand health, and ensuring the achievement of strategic business goals.