Why Stakeholder Segmentation Is Vital For Reputation Management

By Author: Akansh Malik
Total Articles: 67
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For effective reputation management of a firm or political entity, it is essential to craft a comprehensive reputation development strategy. While creating such a strategy, one of the integral parts to focus on is the various factors that go into establishing the reputation of the firm in the first place. There are a number of actions you need to take. One of the most important of these is stakeholder segmentation.

What is stakeholder segmentation? It involves the identification and grouping of the various stakeholders who affect or can be affected by the firm.[1] Stakeholders would include all employees, trustees, clients or customers and investors. Once these entities have been identified and grouped, a sound reputation development strategy can then be created. It also provides a much better understanding of the various stakeholders, organisational structure of a firm and the nature of relationships. Such a strategy would be able to cater to the different segments in the best way possible.

For example, you are approached by a firm producing and selling bottled water, and asked to create a strategy for their ...
... reputation management in India. The very first step you would need to take is to analyse the kind of reputation the firm already has. Then you need to identify benchmarks and create suitable goals. Once this is done, you can finally start on stakeholder segmentation. First, you could identify the most obvious groups such as consumers, production systems, employees – both from the corporate offices and manufacturing units, stock-holders and other investors and executive management. You can already see how dividing the stakeholders into groups gives you a much better idea of the different people and systems that could be affected by every action taken by the firm.

Then, depending on the complexity of the firm’s structure, you may need to further segment the stakeholders. For the sake of the example, let us stick to the obvious segments. Once you have identified your various stakeholder groups, you can start to pinpoint the different ways they could affect the firm’s reputation. For example, findings about unethical practices of the production system could have a detrimental impact on the image of the firm and bring production to a halt. In 2014, Coca-Cola was forced to close down their bottling factory in Varanasi after it was found that they were responsible for depleting groundwater levels and polluting water through effluents. [2] While this is extreme, not just people and activists in India, but the world took notice of the plant’s actions leading to a negative impression of the entire brand and company. A good reputation management firm will ensure that such issues are addressed long before they snowball into a reason for public outcry.

After identifying the different stakeholder segments and the ways that they can affect the firm you also need to see how different actions by the firm would affect the stakeholders. Once you do this, you will be able to create a completely customised and effective reputation management strategy and show your worth as a reputation management company that works on insights and analyses.

Akansh Malik is a reputation management consultant with more than six years of experience in providing Reputation Management services to prolific clients across the board. An avid blogger who is passionate about public relations, he loves to write about Reputation Management Company