A scientific article explains why and how building a robust firm reputation before a crisis occurs is useful.
According to scientific research, creating a robust firm reputation before a crisis strikes will help prevent consumer perceptions of price unfairness when price changes. A price change is an inevitable negative occurrence during a crisis that affects both the consumer and the firm.
The consumer, therefore, uses a firm's reputation as a sign of competence. If a firm has a good reputation, it reduces consumer perceptions of price unfairness. Hence, it is essential to lessen future consumer perceptions of price unfairness in times of crisis. In order to do so, firms need to build a strong reputation right now. Here are a few post-crisis techniques and reputation-strengthening activities that firms can implement at this time in order to lessen consumer perceptions of price unfairness after rising prices in future times of economic turmoil.
Create loyal customer bases
Promote the spread of positive word-of-mouth
Create consumer trust by: (I) Cultivating close, personal connections with customers; (II) employing loyalty-rewarding programs; and; (III) building a strong positive brand image.
Innovate
To conclude, we recommend that small firms implement these reputation-strengthening activities right now with the intention of lessening the impact of an economic crisis.
Reference:
Ferguson, J.L., 2014. Implementing price increases in turbulent economies: Pricing approaches for reducing perceptions of price unfairness. Journal of Business Research,67(1), pp.2732-2737.