What is a company's reputation?

We all know such a word - a 'table'. But if I ask you to imagine a table, we will all see mentally different tables in front of us. Some are round, some are square, high or low, glass or oak, and hundreds more options. The same goes for the word reputation. Some have never heard of it; others have heard but never thought about it. And someone is sure that his company has a reputation and there is nothing to discuss here.

What is a company's reputation?
Let's try to explain with examples what reputation is and how exactly it affects the company. First, it is worth mentioning why reputation is not visible or incomprehensible to many people. Because it can be compared to a tree. If you planted a small sprout, you will not be able to see a tree in it until many years later.

So, let's move on to the examples. The reputation of a company is made up of several parameters that can be described in simple terms. This is the behavior of the company in front of customers, in front of partners, and in front of competitors. And the task of the company's management is to build these processes in the same order as described above. Relationships with customers, because without them there will be no business. And customer relationships start at the back of your company. You can’t just take employees and put them to answer calls or support chat.

The company's management must draw up an algorithm of actions and explain to employees that for customers they represent the whole company. And dozens of other things. Next, you will have to build relationships with partners, where, just like with clients, you must clearly describe your terms of cooperation and strictly observe them. And in the end, you will inevitably have to build relationships with competitors and set the “rules of the game”. Because your relationship with competitors will affect the reputation of the entire industry in which you operate.

I think that I have correctly stated the basic principles of reputation, but I am also sure that the reader is still not very clear on what exactly this reputation is. Let's continue with the tree example. You have grown a tree and everyone can see how big and beautiful it is. And then lumberjacks come, who decide which tree to cut down and which one to leave. Yes, this is the maximum example, but reputation is also important at a time when the company is going through hard times. And just then the health of your tree will be its reputation, and lumberjacks will pass by a slender and healthy tree and cut down the one that has begun to die.

That is why the reputation is not visible to everyone and not immediately. Reputation matters when it is needed. And it is also worth noting that the reputation of the entire industry will also affect the company, which in general consists of the same reputation of individual companies, but in interconnection with each other, that is, in your relations with competitors in your industry. If your company is alone in the market, then the industry has not yet been created. If there are already several units or dozens of them, then it's time for you to think about your relationship with each other. Because without it, you will inevitably end up creating a negative reputation for the entire industry and it will start working against you.

I want to explain how reputation works using the example of the cryptocurrency industry. Have crypto exchanges established customer relationships? There is nothing more true than personal experience, and my experience of contacting dozens of exchanges confirmed that no, they did not organize it. I would even say they left their clients alone with scammers of various types and types. Just recently, crypto exchange Huobi issued a press release to customers explaining how they are being scammed by phone scammers.

What exactly prevents all exchanges from making such a FAQ and doing periodic mailings? My appeal in social networks to the support chat of companies not only did not give a result, but scammers contacted me right there. There weren't hundreds of thousands, just one. What prevents crypto exchanges from hiring one employee who will monitor such attempts and notify customers? That is, without organizing relationships with customers and leaving them face-to-face with fraudsters, exchanges began to build relationships with partners and corporate clients.

But wait, my appeal to the Binance US institutional account led to the same result. They just started ignoring my appeals after one short video call, during which an employee of the company told me that Bitcoin is always one Bitcoin and the project I propose is a stablecoin. He no longer listened to explanations and was in a hurry. Further attempts at contact ended in complete silence, not a single employee responded to requests. This means that relations with business partners have not been built either. What then does the management of their companies do? I don't know, nobody answers inquiries.

But it was at the third stage of building relationships with competitors that another important thing should have been formed. Exchange business model. Their main business is the main process - the selection and listing of new projects. If someone with business experience takes a look at those projects that are published by the exchanges, at least I can personally vouch for those that have been published in the last six months, he will clutch his head in horror and the senselessness of all projects. But the exchanges do not have anyone who evaluates projects, they are busy with something else.

And indirect conclusions about relationships with competitors can be understood if you look at social networks and advertising of crypto exchanges. In short, all relationships are built on the principle of "you die today, and I will tomorrow." And it is from this attitude toward customers, partners, and competitors that the reputation of the entire industry is built.

And at some point, it will inevitably lead to the fact that based on it, conclusions will be drawn about the prospects for the existence of this industry as a whole. It is the bad reputation that has already turned away from cryptocurrencies their main customers - people. Instead of explaining to people exactly how a crypto exchange works and how to invest, the owners of the exchanges did not explain anything to their clients. Perhaps they didn't know? What about their investors? More questions without answers.

But you should always think about the future. Because it is in the future that your reputation will save you or vice versa. And you need to think about it right now, without waiting for the moment when your future will depend on your reputation. After all, sooner or later the tax hole into which the entire crypto industry has now turned will become visible. Of course, no one pays attention to my words today, but tomorrow these words will be spoken by hundreds of people and thousands, millions.

All state financial, statistical, and other institutions may see the situation already today but do not understand what exactly caused it. Perhaps they even change the reporting information, just like crypto exchanges do. But sooner or later it will happen. Not because I said so, but because there are a lot of financial control bodies, so many sectors of the economy are affected by the situation with crypto. But as large institutions, they need to check and double-check information before publishing it. But they will. Without even understanding the whole picture and not understanding the reasons, they will publish it.

And then there will be a lot of questions. Can a company mislead its customers? Have sufficient measures been taken to prevent defrauding customers? Has antitrust or competition law been violated? And finally, the most difficult, but inevitable question, since blockchain technology fixes all transactions forever, is it possible to align the tax legislation, especially for those companies that were not start-ups, but came to the crypto market from long-standing companies with billions of dollars in turnover? Do I need to explain to someone why they decided to change the usual model of financing through the banking system?

That is why it is necessary to think about reputation today. That is why it is necessary to introduce taxation of cryptocurrencies, as described in the ‘Reasons and Stages of introduction taxation of Cryptocurrencies’ article. This will give the entire industry and its companies a reputation for being responsible and future-oriented. This will allow the industry to begin to develop calmly and without the risk that tomorrow the tangle of contradictions and disagreements created by the blockchain will be unwound in the opposite direction.

And this will open new unimaginable prospects for the introduction of crypto into real human activity. In an activity that will become an integral part of our lives. Yes, this scenario implies much slower growth and thoughtful company building over a number of years. But this is how companies like Apple or Google, Tesla or JP Morgan Chase, and thousands of other companies have already improved their reputation many times over after a period of rapid growth.

May 29 / 2023

Text author: Ihar Kul

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