How to make friends and influence people

An organisation's reputation is now seen as much as a key influencer in consumer choice as product pricing. Increasingly, consumer choices are being driven by perceived brand reputation. The driver here is trust - the extent to which consumers trust your company, and the industry in which you operate. As a result we are now seeing more businesses putting public relations professionals in their boardrooms.

The issue of trust has implications for the whole insurance sector. The UK financial services sector has been rocked by major fraud, complaints about mis-selling and questionable business practices. The global trading environment means that problems in markets across the world very quickly impact on the UK. A prime example is the reverberations felt by the Spitzer investigations in the US, with its wave of damaging publicity surrounding bid rigging and collusion among brokers and insurers. Add to this the continuing impact of publicity surrounding off shoring and it is clear the very industry renowned for taking risks faces reputational risk itself.

To overcome this, firms in it need to focus on building reputation and rebuilding the trust of our consumers. The old saying that reputation takes years to build but seconds to destroy is as true today as ever. The past is littered with reputational disasters such as Andersen and Ratners Jewellery, which very clearly demonstrate how a loss of reputation can destroy a once thriving business almost instantly.

Reputational risk continues to be seen by senior management as one of the major threats to organisations, as highlighted by over 50% of respondents to a recent Economist Intelligence Unit survey on operational risk. Therefore, managing your reputation is vital, and increasingly organisations are recognising that public relations is needed to manage their single most valuable asset.

Public relations is a mixture of art and science: building, managing, and sustaining an organisation's positive image through effective communication. The Chartered Institute of Public Relations, the governing body of PR, describes it as 'the result of what you do; what you say; and what others say about you' - so public relations is primarily concerned with reputation management.

An evolving industry

Effective PR involves: evaluating public attitudes and opinions towards your organisation; formulating and implementing organisational procedures to reinforce or change existing public opinion; constructing and co-ordinating effective communication programmes; developing rapport and good-will with your stakeholders through a two-way communication process; and fostering a positive relationship between you and your clients, staff, investors and suppliers.

Against a background of the need to tackle reputational risk, public relations has evolved and is moving up many more agendas. It is no longer an add-on but increasingly is becoming a fully fledged priority area. This is also reflected by the chartered status now afforded to the governing body.

Your company's reputation is gained by delivering on the promises you make to your stakeholders. While public relations itself cannot create your reputation, it can enhance it by ensuring you get the credit your business deserves for the good it does.

On that basis, PR is vital to the broking industry. Gaining and maintaining the trust of the client is vital for survival. To gain trust, an organisation needs to be seen as credible and PR is one of the most effective ways of creating the third party credibility that is needed to build consumer trust.

The power of the media in forming perceptions of organisations and people cannot be underestimated. These perceptions influence your most important stakeholders, such as your clients, your suppliers, and the regulator and, ultimately, form the basis of their decisions on whether to work with or support you. So, press activity is an extremely important aspect of the overall PR toolkit.

Building a profile

A media relations campaign benefits your organisation through profile building and awareness raising. Regular media exposure legitimises your work and, in turn, enhances your reputation. An effective media relations campaign, as part of an overall public relations plan, can position your company as an informed source of news within the broking industry. The advantages gained as a result, as well as the fact the media itself will see you as a respected source to quote, is powerful. The editorial copy generated through effective public relations is seen as more believable and credible than advertising, due to the perceived objectivity of the media. Studies in North America have even gone so far as to suggest that positive editorial coverage generates up to nine times more visibility than paid advertising.

A greater understanding and awareness of the importance of the role of the local community and wider interest groups in a business' success has seen a lot of growth in companies implementing corporate social responsibility strategies. These offer a very tangible way of giving something back to, and improving, the society in which the business operates in.

The insurance industry is already engaged in areas such as the impacts of climate change, environmental degradation and wider risk reduction, and is using PR as an important aspect of these strategies. These can also be viewed as an attempt by the industry to improve its negative image in the widest sense. Through using PR to identify public attitudes and areas of concern, you can then communicate the positive work your organisation is doing in this area, with the end result being a focus on fostering good community relations and goodwill.

However, the practice of public relations as a whole benefits broking organisations in other ways. In broking, which is amid a period of consolidations, mergers and acquisitions, an effective public relations plan will present your organisation in a positive light which will have a knock on effect on investors and potential investors. If your organisation is seen as credible and trustworthy, your ability to attract investors will be a lot easier than an organisation whose profile is either unknown, or whose reputation is perceived as questionable. This link has also been highlighted in a recent survey conducted by MORI, which concludes that over 90% of analysts agree that a company that fails to look after its reputation will suffer financially.

A competitive advantage

All these benefits lead to the ultimate conclusion that an effective public relations strategy will give your organisation a competitive advantage within the broking market. It will inspire your employees, as through an effective two way communication programme, senior management will be viewed as transparent and trustworthy, meaning your employees will be aligned to your organisational goals.

Public relations also allows your business to operate in a more favourable environment than competitors that do not have similar public relations strategies. Through positive relations with all your stakeholders, you will be able to respond to any crisis in a logical and timely manner, which, with the aid of your public relations team or advisers, will lead to limited damage to your reputation. This is evident in examples outside of broking, for instance it is widely viewed that Johnson and Johnson only survived the 1982 Tylenol crisis through the vast amount of reputational goodwill they accumulated prior to the crisis happening. Can any of us think of a similar example within the insurance sector that has seen such a turnaround in fortunes for a brand?

In order to enjoy the full potential of the benefits that public relations presents, it is vital to plan any public relations activity for it to reach its full effectiveness. Here are the key areas for consideration at the planning stage:

Aim: This details the general direction that the organisation wants to go, for example, increasing organisational awareness.

Who: This will outline who your organisation wants to communicate to, such as new markets or existing customers.

Objectives: This will detail what the organisation wants to achieve as a result of the campaign, such as building closer relationships with key stakeholders. Your objectives should be specific, realistic and measurable as they will form the basis of the evaluation process.

Key messages: This will detail the key messages that an organisation wants to communicate, in a clear and concise manner. Within this section, the benefits of the product or service should be stated, and details of the actions you wish the target audience to take as a result should be identified.

Evaluation: A detailed evaluation of the effects of the campaign needs to take place that should highlight both the positive and negative aspects for future use.

Public awareness

Recent trends and threats to organisational stability have made companies more aware of public relations than ever. The way they plan for, and handle crisis can make or break them. The way in which Virgin trains handled the aftermath of the Cumbria train crash, by placing Sir Richard Branson on-site, responding to interviews in a sympathetic manner, demonstrates how a crisis, when handled effectively, can present little damage to an organisation's reputation. The same cannot be said for the way in which Bernard Matthews have handled the bird flu outbreak, and it will certainly be interesting to see how they will use their public relations team to salvage their survival from being apparently unprepared for crisis.

Through working in the industry, our consultancy has seen the effects that a public relations campaign can achieve in meeting and exceeding companies' expectations. As demonstrated, public relations presents a tangible impact on the bottom line, through influencing aspects right across the spectrum. It can raise your organisation's awareness; it can motivate your employees; it can generate more business; it can attract new and maintain existing investors; and it can increase the overall value of your business. In other words, there are no more excuses for ignoring the power of PR.

- Natalie Horn, Concise Public Relations.