4 Tips to Rebuild Your Business Credibility After Reputational Damage

Businesses that have earned this trust enjoy numerous benefits: customers purchase more of their products and are also more willing to pay a premium. However, a 2024 PwC survey found that the trust gap in our world is growing, and it is now more challenging to bridge. It underlined that only around 30 percent of customers greatly trust companies. 

This situation is partially due to an increase in reports of corporate crimes, ranging from money laundering to fraud in prescription drugs. These incidents can escalate into a crisis, affecting a business’s bottom line and prospects. The high accessibility of communication technologies, such as smartphones and social media, means news reports travel faster.

Here are four tips to manage such a situation and help your business recover from a reputational crisis.

1. Maintain Transparency About Ongoing Legal Steps

A business may suffer reputation loss due to accusations of fraud or embezzlement. When it comes to white collar crime, news can spread internationally overnight, affecting all stakeholders involved.

According to The Moorhead Law Group, prosecution is complicated in such cases. State and federal prosecutors may not proceed with an arrest until they have sufficient evidence for a conviction. It may leave an organization with little time to plan a defense or conceal sensitive information.

As a business owner, your best course is to seek legal counsel and guarantee transparency throughout the proceedings. Your crisis team must launch the (pre-prepared) plan, which should cover information sharing and media management. 

It is also crucial to inform employees about the legal counsel you are taking and its expected outcomes. Knowing about the short-term future will help them prepare for potential changes to their jobs.

2. Identify Gaps Through Investigation and Feedback

Follow-up action is mandatory during a reputational crisis—it shows you remain invested in how communities perceive you and wish to make amends.

A thorough gap analysis can help you understand where the problem lies. Is it ethical misconduct on the part of specific employees? Do your operations have loopholes where fraud can fester? Was the crisis brought on by poor judgment by your communications team?

This investigation should encompass the entire stakeholder universe, like the workers, suppliers, and clients. You never know from where the most meaningful insights might arrive.

Additionally, consider collecting feedback on how you are dealing with the situation. It can help you assess if your approach suits the current socio-cultural and socio-political circumstances. 

It is best if you can commit to a continuous feedback program as part of the firm’s pledge to rectify mistakes and do better. This feedback may come on social media, calls and emails from customers, or stakeholder surveys.

3. Launch Trust-Building Campaign

Significant reputation damage may necessitate a communication campaign to mend the situation and prevent further losses to the business. You can do this through trust-building initiatives that are honest, transparent, and earnest.

For example, accepting your mistake may be essential before your patrons can consider giving you their business again. However, it won’t work unless you align all your stakeholders and centralize the messaging. If you recommit to your organization’s mission and values in an annual report but management issues contradictory demands to the workforce, the conflict of interest will be severe.

According to Forbes, a mission-driven campaign can help build trust. It requires consistency, transparency, and engaging content that aligns with the brand’s core mission. It could be Tesla’s dedication to renewable energy or Starbucks’s desire to nurture the human spirit.

Another imperative is to keep the audience informed about how your action plan shapes up. You can issue periodic communication about core milestones to signal that action is ongoing.

4. Refrain From Greenwashing

Businesses accused of causing environmental damage sometimes resort to making grand sustainability promises about damage repair. This approach often ends up in greenwashing, mainly because repairing years of damage within a short period is infeasible.

For instance, some Australian sunscreen companies have recently faced accusations of greenwashing. The Guardian reports that these companies claimed their products were reef-friendly but contained harmful chemicals that could damage marine life.

The growing intensity of climate change means communities and authorities are more aware of such practices. Businesses that have already come under scrutiny can suffer further reputational damage from overstating sustainability claims. Instead, it will be better to pace operational changes for slower but more consistent and meaningful work.

Healing the reputation of your business after a damaging crisis can be an uphill task. Competitors may pounce on the opportunity to pull you further down, and customers’ trust can be hard to regain once lost. However, contemporary businesses must work toward cultivating resilience and confidence with the willingness to rectify mistakes. 

In a mistrusting world, losing one’s reputation in the business landscape is no longer a rare event. Being able to bounce back with a concerted, strategic action plan is a core skill for the modern entrepreneur.