The Silent Brand Killer
A brand’s online reputation could make or break a business. YES, it does!
Over 1 billion internet users in India rely on Google, social media, and multiple review platforms to make purchasing decisions. A single negative review, viral complaint, or PR crisis can lead to lost revenue, eroded trust, and damaged brand perception.
How much does a bad online reputation cost Indian brands? Let’s break it down.
Loss of Trust & therefore, Loss of Revenue
According to a Bright Local survey, 94% of consumers say negative reviews make them less likely to use a business. In India, where word-of-mouth and trust play a crucial role, a bad reputation does not augur well for any business.
Case Study: A well-known food delivery platform in India (Yep, both brands have had their share of reputation challenges) faced a backlash over a viral customer complaint. A boycott hashtag trended online, followed by the apps being uninstalled; the social media engagement turned largely negative.
The company had to invest heavily in damage control, including influencer partnerships and media placements, to regain trust. A tarnished online image impacts both trust and revenues big time.
Increases Customer Acquisition Costs
A strong positive brand reputation brings organic leads, but a negative online reputation forces businesses to spend heavily on paid marketing. A brand with poor online sentiment might need to spend 2- 3x more on digital ads, influencer collaborations, and public relations to counter negative perception. Unfortunately, higher advertising spends don’t always fix the issue—if customer sentiment remains negative, even increased marketing spends won’t drive growth.
Drop in Stock Prices and Investor Confidence
For publicly traded companies, brand reputation influences stock performance. A negative PR event or social media crisis often leads to an immediate stock price drop.
Recent Example: When a major Indian airline mishandled a passenger complaint that went viral, its stock price fell 6% within days, wiping out crores in market value.
Investors perceive reputation risks as financial risks—a company struggling with customer sentiment may find it harder to attract funding or maintain stock stability.
Hiring Challenges & Employee Morale
A bad reputation doesn’t just affect customers—it also impacts hiring and employee retention. Negative reviews on Glassdoor, LinkedIn, or Indeed can reduce job applications by up to 50%, making it harder for brands to attract top talent. Companies with poor employer branding often need to offer higher salaries to offset reputation concerns.
A leading hospitality chain in India faced online backlash over toxic work culture. Result? Mass resignations, recruitment slowdowns, and increased HR expenses in damage control.
Prospective employees are more likely to trust peer reviews than corporate PR—a bad employer reputation can hinder growth from within.
Crisis Management & Legal Spends
Managing a brand crisis isn’t cheap.
Brands end up spending on:
- Legal teams to handle defamation claims and court cases.
- Crisis PR firms to manage media fallout.
- Reputation management services.
Real-World Data: On average, companies dealing with an online reputation crisis spend quite a sum in legal and PR fees alone. Investing in proactive Online Reputation Management (ORM) saves brands from expensive clean-ups later.
Negative Perception on Search
Google’s algorithm prioritizes recent and relevant content—if negative articles, bad reviews, or complaints dominate search results, a brand’s perception on search takes a hit.
Example: A fintech brand saw its organic website traffic drop by 40% after bad press about customer data leaks dominated the first page of Google results.
Reputation is an Asset, Not an Afterthought
A poor online reputation doesn’t just affect branding—it has direct financial consequences. Investing in Online Reputation Management (ORM) isn’t just about cleaning up bad reviews—it’s about building long-term trust and ensuring sustainable business growth.
Want to protect your brand’s reputation before it costs you? Get in touch with our ORM team today!
