Public Relations value is a hot topic these days and theories run the gamut from as simple as getting great media placement to detailed and complex reporting systems. In today’s business world, though, the true value of PR for a company is their total net operating PR capital.
A company needs enough Public Relations capital built up over time in order to protect against reputation risk. Take Toyota’s current PR crisis for example; we all know what happened; unsafe cars on the road, company delays in notification, deflecting responsibility and then finally owning up to situation, with more coming out daily. As a Public Relations and communications professional, I watched this unfold very carefully. Is Toyota going down?
- Why were Toyota vehicles having so many safety issues in the first place?
- Why did their CEO wait so long to advise the public?
- Why did he try to deflect and shift responsibility to his underlings?
- Why is there still more coming out?
Upon closer analysis, I would venture to guess, that Toyota is not going to go down. The reason? They have a strong net operating PR capital. They have built up their PR capital from the inside out over time, with long-term loyal customers, dealers, vendors, employees and much more. In fact, Toyota is presently going on the offensive with authentic and appealing marketing strategies that are putting all of their built up capital to work.
My understanding from some NE dealers is that they are having some of their greatest sales months ever. True or not, it leads me to believe that Toyota will survive this hit to their reputation, though they may have to invest a great deal over the next few years in building their capital back up.
Public Relations is about building and fostering long term relationships with your audiences and stakeholders; which doesn’t happen overnight or with one great story or even with a great number of fans or tweets. A company’s reputation is at risk in the same fashion as its financial situation and must be attended to on a regular basis. To illustrate further, let’s take the financial model and apply it to PR in terms of relationships.
- Leverage current assets – Is what you have working for you? Are you building new relationships?
What value are you providing in today’s marketplace?
- Monitor current liabilities – Who do you owe? Where have you fallen down in delivering value? What relationships have you lost?
- Perpetuate and leverage your long-term assets – Are you maintaining your long-term relationships? Are you telling your authentic story? Are you building a tradition of successful and consistent messaging and branding?
In business, “we earn our right to do business every day,” by building up our PR capital over time with a focus on engaging your assets for the long term.
Next segment: How companies can get started in building up their PR capital.