Manage Expectations to Manage Reputation

My colleagues at Drexel, Dan Korschun and Trina Larsent Andras, and I are discovering that expectations are where reputations are built, maintained or destroyed. Stakeholders have expectations of both companies and industries that are shaped by their own experiences or by the experiences of others. We used to believe that expectations were related to brands and experience was related to reputation. However, social media has changed that. We are getting more and more of our perspective of companies and brands through social media (more than 85% according to a Razorfish study). "People like us" are our primary influencers. Their views not only shape expectations but can influence whether or not we allow ourselves to actually experience the company or brand directly.

The Kano Model is a good way of observing the influence of expectations. According to Kano, there are standards that customers expect to receive in order to be satisfied. These standards are constantly changing. Above the "line of expectation" are those products and services and companies that "delight" us. Those are the ones with outstanding reputations. Those falling below the line of expectations fall short of our expectations, as does their reputation.

The key to reputation management is to manage the line of expectations. We know that some company will attempt to differentiate. When it does, it could delight stakeholders. This will then change the line of expectations and shift the reputation standards for the category.

Consider that at one time a radio in a car was not expected. It was a delight factor. Now, all cars are expected to have radios. Think about the expectations we have for cell phones and other items we buy. Many of the things we expect were unusual and delighters in the past.

Reputation management, then, is similar to marketing and communications strategy and brand management in that it is competitive and category based. For example, Apple continues to operate above the line of expectations--it continues to delight. BP has fallen far short of expectations for envrionmental and safety issues, thereby dragging its reputation down. In doing this, it also likely has changed the slope of the line of expectations for the entire industry down. Some player in the industry has the ability to delight us by exceeding expectations. Hopefully, it will not need to be after another environmental disaster.