Tips to Avoid Reputational Damage Lawsuits against your Business
According to a survey published on Forbes, 40% of a company’s market capitalization is pegged on corporate brand and reputation. In other words, one of the most valuable assets is your good name. A company’s brand reputation deals with perceptions, expectations, and business relationships. If these aspects are not safeguarded, a lawsuit arising from a bad reputation could kill your business. In this article, we share some great tips to help you avoid reputational damage lawsuits.
Be quick to fix errors
Ever heard of the phrase, “The client is always right.’’ Working with this ideology keeps you safe from a myriad of customer tussles. Sometimes, the client is wrong, but offering to listen and willing to investigate makes them happy. Remember, a happy client is a happy business. On the other hand, if you make mistakes, be prompt in addressing them. Be as upfront as possible about the correction and assure the client you have made every effort to address the problem
Train your employees to act professionally
Employees are the face of your business. So, everything they say or do is a representation of you. In that case, you want to make sure that you are represented in the best possible manner. Train your employees on professional conduct when dealing with clients. Make sure they know the risks of libel and slander. Teach them to always gather facts and managerial methods on cases that could affect the business.
Stop making promises you can’t fulfill
Promising to do something always sounds like an easy way of handling a problem. Sadly, “The act now, apologize later.’’ motto is not so wise. In fact, overpromising is the worst mistake an entrepreneur can make and it can hurt your business. Keep in mind that a customer can sue you for failed promises. Don’t say you will deliver when you know you can’t. Trying to impress customers through promises leads to lost credibility, negative reviews, unhappy customers, and bad PR.
Deal with sexual misconduct at work
You must have come across the Ashley Alford sexual harassment case that cost The Aaron’s Inc. $95million in compensation. You are perhaps wondering how that is possible! According to a criminal defense lawyer Scott Dattan, an employee can sue your business over sexual harassment. Sadly, lawsuits arising from sexual harassment cases not only bear a huge financial impact but tarnish the name of your brand. As a business, you must invest heavily in sexual harassment training and mitigation approaches. A sexual harassment policy is vital in promoting the brand’s name.
Focus on positive image and communication
One of the long-term ways of avoiding reputational damage is consistently sending out positive communications. Doing this creates a good public image and lessens the impact of future damages. Let your clients know what’s happening and how you are responding to incidents. While it is impossible to please anyone, focus your message on key stakeholders that
Sometimes as an entrepreneur, you might not have control of all aspects that may result in reputational damage. So, in addition to reinforcing these tips, invest in small business insurance to manage such costs. General liability and professional liability insurance will come in handy. Additionally, always consult a lawyer on best practices that will keep your business safe.