Reputational damage causes anger and mistrust among consumers and substantially devalues brands. The reputational mismanagement of the recent Ford Kuga crisis has undoubtedly undermined the brand’s value in the minds of consumers which will not be easy to overcome.
PricewaterhouseCoopers on the other hand, after 83 years of counting the Oscar votes, were quick to acknowledge accountability and apologise sincerely after Sunday night’s Oscars, for what Business Insider called “possibly the biggest screw-up in Oscars history”, when the award for Best Picture was mistakenly given to the wrong film. PwC immediately issued a statement expressing “deep regret” and said they were investigating how it could have happened.
Brand reputation is a strategic value driver and Weber Shandwick’s recently launched report, The Company behind the Brand II: In Goodness We Trust global thought leadership study, examines the intersection of brand and reputation from both the viewpoint of consumers and senior executives.
The study reveals that consumers are now focused on how a company behaves according to two different, but inter-dependent types of activities:
- A company’s responsiveness to issues or crises
- A Company’s ability to deliver well-being to customers’ lives and positive social impact, going beyond quality of its products and services and a greater emphasis on ‘good for me’.
The report looks at how consumers view, their influence on corporate reputation, what they expect from companies today, how they gather information about companies and what they think about the role of the corporate brand. From the executive viewpoint, it explains the benefits that strong corporate brands bestow upon their product brands, what executives see today as the drivers of company reputation and how well aligned they are with the latest consumer perspectives about company responsibility.
The report was conducted with KRC Research among consumers and senior executives in 21 global markets. It follows an earlier report, ‘The Company behind the Brand: In Reputation We Trust’, that identified the interdependence of corporate brand and product brand.
The report states that the degree to which products and services make individuals feel good or healthy surpasses their interest in specific corporate responsibility initiatives, sometimes by wide margins.
“Our study highlights a heightened demand for more personalised corporate narratives,” says Andy Polansky, Weber Shandwick CEO. “Such narratives today are most relevant when they relate directly to individual consumers’ well-being in addition to a company’s commitment to tackling broad societal issues. Communications, marketing and R&D need to be more integrated than ever to achieve this new reputation paradigm.”
The report states that the degree to which products and services make individuals feel good or healthy surpasses their interest in specific corporate responsibility initiatives, sometimes by wide margins.
With 47 per cent of consumers frequently discussing how healthy or good specific company products or services are, and 46 per cent increasingly buying from companies that make them feel good, the Weber Shandwick report concludes that the personal, individual benefits of a product are a prime consideration to drive purchasing decisions. This overshadows the impact that companies have on a number of social impact factors among consumers (see chart below).
Company executives now recognise that providing and communicating “good for me” is an emerging hallmark of a strong company reputation.
Implications for companies
The report states that consumers are empowered by their influence on companies and know how to demonstrate their empowerment through their words and actions. The implications for companies and marketers is two-fold.
Marketers should be aware of the rise of personal and purpose communications and the emerging trend that their companies’ reputations are now influenced by the wellness and peace of mind that their goods deliver.
At the corporate level, responsiveness is now a reputational mandate. As boards are hyper-focused on reputation risk, no corporate brand can afford to be without a crisis response plan or insights into predicting troubles ahead. On a more micro-level, brands need to respond to and engage with their stakeholders on a continual and agile basis.
Jill Hamilton, MD of Weber Shandwick Africa, says that more than nine in 10 South African executives (94%) report that a strong parent brand is just as important as — or even more important than — strong product brands. Executives recognise that consumers today are not just purchasing products or services for their functionality, but are also buying based on the reputation of the company that sells the product or service. “As one South African executive explained, ‘[Consumers] want to feel secure that the products they are using are backed up by a solid parent company’. So if there should be any issues experienced it should be addressed and solved rightly,” she says.
Hamilton adds that two trends that came out of the study are pertinent to the media industry:
1. How a company responds to any kind of issue or crisis it faces is critical. The study found that a vast majority of South African consumers, 91%, base their opinions about a company on how it reacts to problems. Responsiveness to issues is second only to what customers say about it (98%). “You could say the media industry is having its crisis moment now with the proliferation of fake news. Audiences are wondering what is real and what is not and judging the source of all information,” she says.
Media companies are in the position of assuring their readership or viewership base that they are delivering legitimate information and should be leveraging their reputation for credibility.
2. In this same vein of responsiveness, how companies react to consumers is an influential purchase decision factor. Consumers say they are increasingly buying from companies that listen to their customers’ opinions and make changes accordingly. “This is particularly true of South African consumers: 63% identify with this behaviour, a rate much higher than consumers in any other market in our study (the global average is 41%). This driver of reputation fits right in to the culture of the media business, as its content has historically been shaped by the consumer ‘voice’,” she says.
“No corporate brand can afford to be without a crisis response plan or not be fully tapped into audience insights and reactions,” she adds. “On both levels, brands need to respond to and engage with their stakeholders on a continual and agile basis as that is what is expected and demanded today.”
Read the full report here.
