A key question for company CEOs, boards and executives around the world is: what drives company reputation? And a new global report answers that question.
According to Weber Shandwick’s report The State of Corporate Reputation in 2020: Everything Matters Now, company reputation today is ‘omnidriven’, meaning that a company’s reputation no longer relies on a few select factors. But that today, everything matters.
And companies need to know everything that will influence and shape their reputations because that’s what enables them to establish, build and protect it.
Among the global executives surveyed in North America, Europe, The Middle East and Africa, Latin America and Asia Pacific, respondents say that 63% of their company’s market value comes from its reputation. And, of the companies that have experienced a crisis that impacted their reputation, 76% of them say the crisis was preventable. So, this level of both importance, and high risk, means companies need to be vigilant about what’s driving their reputation.
So what actually drives corporate reputation?
The top 5 factors contributing to corporate reputation are:
- Quality of products or services
- Quality of employees
- Quality of customer service
- Safety of products or services
- Respect for customer or employee privacy
The quality of the good or services, the people providing them, and the customer service people receive are critical to corporate reputation. While not surprising, it does underline how important it is that companies are seen to be prioritizing these factors. Making quality highly visible is also key.
Next up in order of contribution to company reputation are:
- Product or service innovation
- Industry leadership
- Financial performance
- Value for the cost or price of products and services
- Ethics and values
- Technological advancement
- Corporate culture
- Corporate purpose
- Quality of CEO or chair
- Training and support for employees
- Marketing and communications
- Quality of senior leadership other than CEO or chair
- Diversity and inclusion of the workplace
- Community relations
- Environmental responsibility
- Global presence
- Philanthropy or charity support
There’s no doubt that reputation is a company’s biggest corporate asset and one of the most competitive factors.
What else contributes to corporate reputation?
Marketing and communication also influence company reputation. Over half of those surveyed cite the following contributing factors:
- How a company responds to and addresses any crises, issues or problems.
- Ability to communicate and deliver on its mission, vision and values.
- Communications with the public.
- Communications with employees.
- Award wins or “best of” lists a company ranks on.
- Social media communications and interactions.
- Participation of company leaders at business forums, conferences or industry events.
- Leaders’ presence on the company website and social media.
And executives say that these are the benefits enjoyed by companies with strong reputations:
- Customer or client loyalty
- Competitive advantage
- Better relationships with suppliers and partners
- Attracting high-quality talent
- Employee retention
- New market opportunities
- Higher stock price
- Crisis resilience and risk minimization
- Greater support from policymakers and regulators
- Ability to charge premium prices
- More favorable media coverage
- Less shareholder activism
What is the strength of company reputation today?
At least three-quarters of executives in all the markets surveyed report that their company’s reputation is ‘very’ or ‘somewhat strong’. In Spain, China and India, 98% of executives say the reputation of their company is ‘very’ or ‘somewhat strong’.
The report also finds that executives in telecommunications, IT, technology are most likely to say their company reputation is ‘very’ or ‘somewhat strong’ (92%), followed by consumer goods (91%), energy and natural resources (90%). Executives in government, the public sector, social services and retail are the least likely to say their company reputation is strong (83%).
How do the ‘reputation elite’ do better?
Then, there is a group that the report calls the ‘76 Percenters’, those whose reputation yields the biggest dividend. They actively focus on reputation management, which pays off. The ‘76 Percenters’ score higher than the average global executive on every one of the 23 reputation drivers, and they lead by at least 10 percentage points on nearly half. The top differentiators are a focus on industry leadership, ethics and values, corporate culture, training and support for employees and community relations.
83% of the 76 Percenters say their senior leadership actively measures or monitors the company’s reputation vs 71% of those outside the 76 Percenters. And those with the best reputations also attribute a greater percentage of their company’s reputation to the visibility of their senior leadership – 80% in fact (vs 58%).
Weber Shandwick produced the State of Corporate Reputation in 2020: Everything Matters Now report with KRC Research after examining companies in 22 global markets across industries. The 2,227 respondents included mid-to high-level executives at companies with at least $500 million in revenue in developed countries and $250 million in emerging markets.
An experienced digital PR, marketing and social media marketing strategist, Claire leads PR strategy and delivery at Igniyte across multiple countries and sectors.
With 16 years’ experience in marketing, communications and PR, she seamlessly directs all elements of B2B and B2C online PR to gain high-ranking positive coverage for our clients in regional, national, international and specialist online media – and she helps ensure that any risks are managed and mitigated.