The Value of Reputation

A few days ago, I published the chart you see in this post on Twitter to highlight how one of my favorite brands, Nutella, has the best global reputation across the board. The Reputation Institute, which was introduced to me by my friend Richard Binhammer over a year ago, pulls together seven dimensions to compute a brand's reputation.

They are:

• product/service
• innovation
• workplace
• governance
• citizenship
• leadership
• performance

How many of you are actively working on communicating with the people and communities that contribute to influencing your brand's reputation across these seven dimensions? Customers, employees, partners, investors, and so on.

You know that reputation has an impact on the perceived value of your company and brand.

Yet so many companies do a poor job at providing a diverse image across these dimensions, especially on a proactive basis. Underestimating the fact that a strong platform of support is not just necessary, it is a vital part of the brand's present and future performance.

Therein lies the difference between risk management, a discipline of good and proactive practices that help you identify, assess, implement, and measure activities that allow the organization to be proactive and strategic about risk, and crisis management, its reactive cousin.

Why this is important

Many companies tend to react to crisis and very rarely work on a thought out plan to minimize risks. Is it any wonder that the PR profession is so active around crisis communications today?  Danah Boyd's Web 2.0 Expo flow of information talk provides a set of data points on how to go about it today [hat tip Neil Perkin].

Information sites used to be a destination, accessing information a process, producing content a task - things are now in constant flow. How has flow transformed the production of and attention to information? Wearing the public relations and communications hat, and thinking about the dimensions of company and brand reputation, here's why this is an important consideration.

To be relevant today requires understanding context, popularity, and reputation.

Making content work in a networked era is going to be about living in the streams, consuming and producing alongside "customers." Consuming to understand, producing to be relevant.

Content creators are not going to get to dictate the cultural norms just because they can make their content available; they are still accountable to those who are trafficking content.

We need technological innovations. For example, tools that allow people to more easily contextualize relevant content regardless of where they are and what they are doing and tools that allow people to slice and dice content so as to not reach information overload.

This is not simply about aggregating or curating content to create personalized destination sites.

How are you engaging content mediators and information networkers across the dimensions that form your brand's reputation? Remember that reputation and recommendation are tightly correlated.

What it may look like

Here are some initial ideas for each of the seven dimensions, taking into consideration that monitoring and listening is part of the consuming activity, as well as the producing. The beauty of flow - and its inherent scariness - is that it is ongoing, at times rapid, and ever changing.

Consider:

• product/service [classified as key driver at 17.5%] - product development and customer service teams need to get integrated in the flow to understand uses and issues. Are your products and services high quality?

• governance [classified as key driver at 15.1%] - board of directors, management, employees, suppliers, customers, banks and other lenders, regulators, the environment and the community at large all reach a common understanding.

• citizenship [classified as key driver at 14.7%] - also known as corporate social responsibility is where management and business strategists need to connect with the responsibility for the impact of the company's activities on the environment, consumers, employees, communities, stakeholders, etc.

• innovation - product development, marketing, and business strategy are synchronized in real time to capture feedback loops.

• workplace - business strategists, human resources personnel, managers especially embedded in the collaboration networks. Are you treating employees well? With a simple link or comment thread, the world will know instantly.

• leadership - executive and management behavior not shielded from but exposed to the flow and vice versa. Good leadership increases trust, confidence, support, and investment from key stakeholders. Emotional investment, especially at a time when companies are losing trust so rapidly, creates economic value. Are you practicing transparent and ethical business?

• performance - investors are also employees, customers, and partners. Their experience and understanding impacts the company's performance today more than ever. Is the company's vision articulated clearly? Is the company delivering on its financial expectations?

There is an ever stronger correlation between recommendation and reputation. According to the Institute's research, if you improve reputation by 5 points, support goes up by 6.75%. Ferrero, IKEA, and Johnson & Johnson have the best global reputation in the chart above. Which means:

1. customers trust what the company is promising
2. investors can count on financial predictions
3. employees know the company will honor its word
4. the world admires the company's leadership

This is where communications and social become operational, with communicators curating the conversation, connecting the dots, and working alongside teams while maintaining a direct line to company officers and executives.

Does this give you a few ideas on the changing role of public relations professionals? How are you organizing to be in the stream to help curate the conversation with stakeholders and fulfill the brand and company's reputation needs across its dimensions?

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Note on survey methodology: companies were rated by customers in their home country. The Global Reputation Pulse (your info required to download) is a measure of corporate reputation calculated by averaging perceptions of trust, esteem, admiration, and good feeling obtained from a representative sample of 100 local respondents who were familiar with the company. 

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Further reading on reputation:

Improve Your Company's Reputation Online

Conversational Index is Reputation-Driven

Reputation, the One Thing You Cannot Really Buy

© 2006-2009 Valeria Maltoni. All rights reserved.

Comments

[Ryan Waggoner]

Am I the only one who thinks that things like this are a little too navel-gazing to be of much value? I mean, seriously, the fact that they broke the key driver metric down to tenths of a percentage point? These are inherently fluid and qualitative comparisons already, as they compare brands in vastly different industries, with different cultures, different goals, serving different demographics. And it's all subjective. I guess I just feel like this kind of thing makes for good consultant reports, but little actionable intelligence. Am I wrong?

[Valeria Maltoni]

I would not call communicating effectively with stakeholders navel-gazing. But that's probably not what you meant. I grabbed the report because the categories are solid.

And I wanted to make a point. The role of public relations professional is thought of as just writing and sending out/pitching press releases. Organizations that don't understand the value of (first) doing the right thing with products, governance, etc. and then communicating it to their stakeholders as outlined stand to lose market value.

As we head into a period of increased efficiency - "learning to use less, reuse more, and find greater value in the things we have close at hand" [moreminimal.com] - our choices will be increasingly guided by reputation. Your comment is subjective. Does it mean it's not valuable?

[Ed Wheeler]

I think that data like this illustrates the trend towards all "customer facing" areas becoming part of the reputation process - not just PR/Marketing/Sales - moving to less centralized control of a company's image.

While the data may not be "objective" it makes areas of a company that don't traditionally need to think of these things (and are usually the ones that focus on "objective" data) start to make the change to thinking about the "subjective" image of how their department represents the company as a whole.

[gianandrea facchini]

I see a strong integration between the monitoring analysis we perform and this service.
And I agree with Ed point: it makes areas of a company that don't traditionally need to think of these things start to make the change to thinking about the "subjective" image of how their department represents the company as a whole.

[Valeria Maltoni]

@Ed - the whole organization is now responsible. It was before, mind you, just not to the degree to which it is obvious today. Now the organization can ask and see if those departments are coming through. Accountability is good for everyone.

@Gianandrea - it sounds like you might want to give them a call, then.