Today, Bob Thompson commented on Maz Iqbal’s February 3rd blog, where Maz expounded on his personal reaction to Apple’s acceptance of terrible working conditions for workers who assemble their high-tech consumer electronic products, so they could avail the enterprise of the lowest possible manufacturing costs. Bob said: “Companies need to understand that the complete package of value that we’re buying is not just the product, not just the experience and not just the price. It also includes our feeling about the way the company conducts itself in the market.”
Bob’s statement represents a consumer point of view that is so strong today that organizations cannot afford to misread or avoid its implications. Colleagues at leading PR firm Weber Shandwick (www.webershandwick.com) recently released a report – The Company Behind the Brand: In Reputation We Trust – where, based on image and reputation, the potential for behavioral impact was studied among 1,375 adult consumers in the U.S., U.K, China and Brazil. It also included 575 executives in companies with revenue of $500 million or more. Study fieldwork was in October and November, 2011.
The results of the study were indeed eye-opening. From the insights, Weber Shandwick identified six new realities of corporate reputation, each serving as a reminder that reputation and image matter – a great deal.
1. Corporate brand is as important as the product brand(s)
2. Corporate reputation provides product quality assurance
3. Any disconnect between corporate and product reputation triggers sharp consumer reaction
4. Products drive discussion, with reputation close behind
5. Consumers shape reputation instantly
6. Corporate reputation contributes to company market value
About two-thirds of consumers said they avoid buying a product if they don’t like the company behind the product, and an equal proportion increasingly check product labels to see what company is behind the product they are buying. These results were even stronger in China and Brazil.
And, what influences consumer perception about companies? 88% of respondents said “what people say”. This is higher than online reviews (85%), online search results (81%), company web sites (74%) and social networks (49%). Everyone understands that the influence of social networks is rapidly growing, and the Weber Shandwick report concludes: “Once companies figure out how to use social media to demonstrate their receptivity and customer focus, social media will be the consumer’s best friend.”
Finally, regarding the impact of corporate reputation on company market value, executives in the study estimated that 60% of their firms’ market value is attributable to its reputation. This high value is reflected in the fact that 86% of the executives reported that their companies have increased efforts to build company reputation over the past few years.
This past Summer, I submitted an article to CustomerThink which addressed the impact of corporate reputation and image on customer advocacy behavior. As noted at the time, it is highly significant. For those who would like to check it out, here is the link to the article: http://www.customerthink.com/article/corporate_reputation_and_advocacy_linkage