Some costs are easy to track in an Excel spreadsheet. Others aren’t. For example, a campaign that didn’t work out. A project that went over budget. Or a customer who stopped buying. All of these can be measured.
It is harder to gauge the cost of a reputation that has gradually eroded. When a company loses a customer, it often looks to the most immediate reason: price, competition, service, or timing. However, the decision isn’t always that simple. In fact, there are cases where trust was already lacking before the decision was made. And that is much harder to identify.
We all start from a lower point than we realize
It’s best to start by accepting an uncomfortable truth: the starting point today isn’t neutrality—it’s mistrust.
The 2026 Edelman Trust Barometer surveyed 34,000 people in 28 countries. The study describes what it calls the shift from a crisis of dissatisfaction to a crisis of isolation. Seventy percent of people are unwilling to trust others or are hesitant to do so. Seven out of ten. And only 32 percent believe that the next generation will have a better life than they do.
This isn’t data about companies. It’s data about the environment in which companies operate. Now, when seven out of ten people are initially hesitant, those who have done nothing to build trust aren’t starting from scratch. They’re starting below zero.
There’s more. Businesses are the institutions people trust the most. Even so, the 2024 edition of the study placed that trust slightly below 60 percent. That is the threshold above which trust is considered high. In other words, the highest-ranked institution is, technically speaking, still not considered trustworthy.
Our reputation precedes us
When a company goes into a meeting with a potential client, it doesn’t necessarily start from scratch. Someone has already heard of it. Someone has looked up its name. And someone has visited its website or checked out its LinkedIn page. They may also have come across a news article or asked a colleague if they know that company. In other words, the meeting often begins a few days before it actually takes place.
The same goes for a job candidate. Before accepting an interview, they may seek out opinions about the company. They may also talk to someone who works there. They may try to get a sense of the work environment and what the leaders are like. Or, quite simply, they may see if what the organization says about itself matches reality. It is an assessment that almost always takes place without the company realizing it is being evaluated.
When You Have to Explain Too Much
A good reputation doesn’t mean a company never has problems. Every company does. The difference often lies in the level of trust that exists when those problems arise. When a company is known for following through, responding, and taking responsibility, it starts from a different position when it makes a mistake. There is context. There is a track record. And there are people who have already had positive experiences.
On the contrary, when a reputation is fragile, every problem seems to confirm a preexisting notion.
There is a finding from the Trust Barometer that describes this mechanism with almost unsettling precision. Among people who feel a strong sense of injustice, companies are perceived as being 81 points less ethical. It is not that these people have had a worse experience. They simply interpret the same experience differently. Thus, the prior frame changes how the facts are interpreted.
That’s why a bad reputation can be costly even without an actual bill for it.
We need to explain more. Answer more questions. Negotiate more. Be more persuasive.
A business proposal may require additional meetings. A hiring process may take longer. A partner may ask for more assurances. And a client may hesitate before renewing a contract.
These aren’t necessarily communication problems. But communication may have contributed to how the company is perceived.
How much does this actually cost?
It’s worth translating the argument into simple arithmetic, because that’s where it ceases to be philosophy.
Imagine, for example, a business process at a company with a solid reputation. It closes in three meetings over the course of six weeks. Now, at a company that raises doubts, the same process takes five meetings and eleven weeks. Furthermore, it involves one additional member of management. And it ends with a request for a discount that otherwise would not have been made.
However, none of these hours are recorded as a reputational cost. Instead, they show up as business time, a longer sales cycle, and lost profit margins. Therefore, multiplied by a year’s worth of proposals, it adds up to a large number. And it remains hidden in line items that no one associates with communication.
The problem with thinking only about reputation when there’s a crisis
It’s relatively easy to remember a reputation when something goes wrong.
Bad news. A social media post that goes viral. A customer comment. Or an internal issue that becomes public. That is when questions like “What should we say?” or “How should we respond?” arise. These are legitimate questions. However, they come too late.
Reputation isn’t fixed with a press release. Much less with a carefully crafted post after a crisis has already begun.
On the contrary, it is built over months and years through many seemingly small things. For example, the way a company talks about its work and the quality of the information it provides. Also, the way its experts participate in the debate, what customers say, and its relationship with journalists. And, above all, the gap between what it promises and what it delivers.
When a crisis hits, how you react matters
The speed at which information circulates has made crises faster and more public. The problem is rarely the initial mistake. It is the way the organization reacts.
Companies that take responsibility, communicate transparently, and show they can correct mistakes recover faster. Those that deny, hide, or delay explanations almost always worsen the impact. Reputation does not depend on the absence of errors, but on how each organization reacts when they happen. Therefore, crisis preparation makes the difference.
Reputation is also a matter of people
There is another aspect that deserves attention: the employees. In fact, it is difficult to separate the company’s external reputation from the experience of those who work there. Sooner or later, a significant discrepancy between what is said and reality becomes apparent.
The data also helps us understand the prevailing sentiment within the internal environment. In 2025, the Trust Barometer reported that 61 percent of people felt moderate or high levels of dissatisfaction. In addition, four in ten would approve of at least one form of hostile activism. Among those aged 18 to 34, that figure rose to 53 percent.
Furthermore, today anyone can talk about an organization. An employee, a former employee, a job applicant, or a customer. That doesn’t mean that all opinions carry the same weight. Nor does it mean that a single piece of criticism should define a company’s image. It simply means that the line between official communication and what people say is no longer so clear.
Companies no longer have sole control over their reputation. They can influence it, they can work to build it, and they can respond when necessary. However, controlling it is another matter entirely.
The good part: confidence is on the rise
There is one statistic from 2026 that often goes unnoticed. However, it is, in practice, the most optimistic figure in the entire study. Think about the people who trust lifestyle content creators. Sixty-two percent say this would lead them to consider trusting companies they do not currently trust.
In other words: mistrust isn’t a final verdict. It’s a state of mind. It can be transferred, shared, and rebuilt. Those who show up consistently—with identifiable people and useful content—manage to make a difference. Those who only show up when they need to don’t.
The return that doesn’t show up in the metrics
Perhaps this is the most thankless part of reputation management. It’s possible to measure reach, visits, mentions, leads, or engagement. It’s not so simple, however, to measure the decision of someone who chose a company because, in some way, they already trusted it. We won’t always know how many business deals were facilitated by a good reputation. We do know, however, that the absence of a good reputation can create obstacles—and those obstacles come at a cost.
It takes longer to close deals. It’s harder to hire. There is also more resistance during negotiations and more pressure on sales teams. Finally, there is more work when a problem arises.
Ultimately, a good reputation doesn’t guarantee that a company will win every opportunity. But it can prevent some from being lost before they even begin.
That is why viewing reputation solely as a matter of communication is too narrow. It is a matter of management.
Because building trust takes time, but losing it can happen in a single day—and regaining it usually takes much more effort.
EDC publishes the Portuguese edition of the Edelman Trust Barometer annually.
If you want to understand where your company’s reputation stands today and what’s holding it back, talk to us.
