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The New Reputation Economy, How Good Is Your Company’s Reputation Online?

What is a Reputation Economy? The concept of Reputation Economy is still very new. It’s inception came about as a direct result of the rise in importance of social media. It’s the idea that a new economy is evolving to replace in importance the old ways of measuring a person or a business’s value, trust, credibility, reputation, risk, etc, which has traditionally been measured by such things as CVs, employee reference, personal reference, credit ratings and so forth.

In the new reputation economy, according to a survey released by Microsoft, 80% of HR professionals use online reputation information as part of their hiring process. So now more than ever before what you do, what you say and what others say about you is critically important. And as the internet grows inextricably entwined with our everyday lives, once you create an online presence, you will have to maintain it throughout the course of your life.

The reputation economy is the new online social order where brands are built based on how they are perceived online and how well they deliver on their promise offline. Like companies, professionals too are being judged, rated, and commented on, and a reputation profile is emerging. It is the new personal data file, the only difference being that most of this information is publicly available or freely exchanged between companies and or organisations.

Here’s what Wired.co.uk said about the new Reputation Economy:

Imagine a world where banks take into account your online reputation alongside traditional credit ratings to determine your loan; where headhunters hire you based on the expertise you’ve demonstrated on online forums such as Quora; where your status from renting a house through Airbnb helps you become a trusted car renter on WhipCar; where your feedback on eBay can be used to get a head-start selling on Etsy; where traditional business cards are replaced by profiles of your digital trustworthiness, updated in real-time. Where reputation data becomes the window into how we behave, what motivates us, how our peers view us and ultimately whether we can or can’t be trusted.

Welcome to the reputation economy, where your online history becomes more powerful than your credit history.

The value of reputation is not a new concept to the online world: think star ratings on Amazon, PowerSellers on eBay or reputation levels on games such as World of Warcraft. The difference today is our ability to capture data from across an array of digital services. With every trade we make, comment we leave, person we “friend”, spammer we flag or badge we earn, we leave a trail of how well we can or can’t be trusted.

An aggregated online reputation having a real-world value holds enormous potential for sectors where trust is fractured: banking; e-commerce, where value is exponentially increased by knowing who someone really is; peer-to-peer marketplaces, where a high degree of trust is required between strangers; and where a traditional approach based on disjointed information sources is currently inefficient, such as recruiting. (read the full story).

The power and influence of online reputation to make or break business brands, or to elevate or tarnish personal reputation is growing at breakneck speed. Google gave a final big push by converting all local business listings to Google Plus with Zagat ratings and reviews and where people are connected people in social circles, so now when your friends and connections like, recommend or comment online, you know about it.

With everything that happens online leaving a clear measurable footprint, it’s a simple process today for that information to be collated and extrapolated to form a bigger picture of you or your business.

“I believe reputation capital will become a cornerstone of the 21st-century economy, more powerful than our credit histories,” says Sydney-based author and collaboration consultant Rachel Botsman.

Her book What’s Mine Is Yours: The Rise of Collaborative Consumption provided a vivid demonstration of why trust is vital in a world where social lending, crowd financing, car-sharing and couch-surfing are fast becoming accepted norms. Every day billions of dollars ride on the decisions we make about firms and people, whether it is job recruitment, marketing campaigns, flat-renting, swap exchanges and so on. In making those judgement calls, we place great faith in our own intuitions and those of our immediate social circles. We rely, in other words, on a random accumulation of localised knowledge about people, their backgrounds and various behavioural signals. What if we could pool all those circles of wisdom together and extract a common currency for evaluating everyone’s levels of expertise, social resonance and, above all, such critical attributes as trustworthiness? Well, that race is now on.

Many see measurement of reputation – trust quotients, if you like – as the next big frontier on the web. Just as Google unleashed the search potential of the internet with its PageRank analysis that assigned a numerical weighting to every nugget of information, so a new breed of reputation brokers is starting to define web 3.0 with the equivalent of ‘PeopleRank’ scores. You might think of these as Yelp ratings for people, creating a hierarchy of individuals and companies based on reputation scores.(CNBC Business “Welcome To The Reputation Econcomy Jan/Feb 2012).

With the internet being as crowded as it is, often the only thing that differentiates or stands between you and your competition is your online reputation i.e what is said about you. We have got use to products being rated and reviewed by customers, now it is the turn of people and businesses that are being rated and reviewed and a reputation score applied based on online social indicators.

With that said, do you know your online reputation?

Graham Cardona is a local internet marketing strategist and an expert online reputation marketing consultant. If you want to know what your company’s current online reputation score is then simply go to our local reputation report page and enter your local business telephone number as found in Google. If you would like specific help and advice on how reputation marketing can help your business to stand out as the leading authority for the product or services you provide then please do not hesitate to contact us or go to our reputation marketing services page.

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