A Primer On Reputation Theory

The importance of a reputation and how it's formed

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What is Reputation?

As the asset that most directly affects the decision making of your competitors, customers, friends, family, coworkers, and everyone else your name comes in contact with, reputation is a form of power. It's also fragile. So how's a reputation formed, what does it consist of, and what's the basic theory around how to build or fix it?

Game Theory: Competing Reputations

In game theory, a reputation can change the underlying assumptions of interaction between businesses altogether. For instance, if a company has a strong reputation for 'reliability', other companies in the field have the incentive to focus on other attributes instead of competing over 'reliability', simply because competing over having the strongest reputation for an attribute requires a huge input of resources.

So by adamantly maintaining a reputation for a certain attribute, a firm often opens its own 'territory' in a market; an area of expertise where competitors might operate at a loss if they tried to enter. That means that a strong reputation often cuts out a slice of the market pie just for you. An area of your field where you hold absolute dominion... and all because of something intangible that exists in the eyes of everyone else. Sounds nice, right?

So how's it made?

It all starts under the assumption that the public doesn't know squat about you. When someone first comes in contact with you or your company, it's usually through some nugget of information. If it were a headline, it might read "Dog Corp. gains national gold medal for dog washing", and it instantly opens a new folder in the viewer's brain that's titled "Dog Corp: good or bad quality?"

Next, new bits of information are added to that folder. They might come from word-of-mouth and they might not even be about Dog Corp., but if they're similar they're usually put in there somewhere.

That viewer's brain is on a mission. It's trying to compile enough data to make an inference about the company. And once it does, it'll share the data it collected and the inferences it made with the rest of the world through word-of-mouth, blog posts, yelp reviews, and other channels.

Dog Corp.'s reputation? It's the culmination of all the data and inferences that were shared. Some of the data might've been falsified, and some of the inferences might've been a mile from the truth, but the result affects business in a big way nonetheless.

If Dog Corp. wants to keep giving super deluxe doggie baths to high paying customers every Tuesday, they'd better hope the news of their gold medal made enough waves to maintain their reputation as the "it" place to get premium dog washing services.


What stakeholders think of the company. According to HB Schultz and A. Werner’s Reputation Management e-book, reputation consists of different parts:

  • Identity - What the company says it is
  • Personality - What the company is all about

They say, “The alignment of these factors is vital if we want to build, sustain and protect an organisation’s reputation.” Everyone involved with the company plays a role in the development of that company’s reputation. How everyone speaks and acts to the community outside of the operations of the company impacts that company’s reputation.

Schultz and Werner also state that “The objective of reputation management is to foster this harmonious relationship between identity and image.”

That is, it's important that what the company says about itself is true, and what the community thinks about it is true, too. In a situation of good reputation, these things should align where perception directly reflects reality.

Reputation theory diagram

How does one manage a reputation?

A large part of what we do as an online reputation management company is helping improve your image by increasing publicity and searchability of the positive things that are associated with you. We also try to bury the things that could be damaging your reputation

Ethics and Reputation Management

A common concern is related to the ethics of the field. Reputation ethics are a part of every project we consider, and we pride ourselves on being an ethical company. If you’re interested in our thoughts about ethics in reputation management, check out our page on the subject.

Search engine optimization (SEO) is a large part of what we do. We push down bad search results and defend positive search results that relate to your company. We also pursue the removal of content that negatively impacts how consumers perceive your brand or you as an individual.

Skim through our comprehensive list of reputation management services for more details.

Reputation management operates by aligning the perception of the community of interested parties with the identity of the individual or company. For an online reputation management company like Reputation X, this includes SEO and other tactics that deal with online resources.

If you want to know more about online reputation management, read our blog or contact us directly today.

"You will be glad to have Reputation X as a strategic partner."

lovell logo Rosemary Plorin CEO | Lovell

“Reputation X has done an excellent job for our company. They deleted nearly all negative online content placed by a very active detractor, and pushed down the rest.”

Safe Harbor Ralph Serrano President | Safe Harbor Equity

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