One of the leading drivers of corporate reputation among consumers is how good or healthy a company’s products/services are for them, and how happy they make them feel, according to a new survey released today by global communications and engagement firm Weber Shandwick.
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,” according to Andy Polansky, CEO, Weber Shandwick.
“Such narratives today are most relevant when they relate directly to the well being of individual consumers 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,” added Polansky.
According to Tyler Kim, Managing Director and Head of Corporate, Asia Pacific and Head of Crisis Communications and Issues Management, Weber Shandwick Asia Pacific, “In Asia Pacific today, the importance of corporate reputation continues to be of incredible value on the consumer front. It is important for our clients to understand the shift in consumer habits based on reputation and ensure their strategies are aligned to ensuring that this is of the highest priority.”
The Weber Shandwick report, ‘The Company behind the Brand II: In Goodness We Trust’, was drawn up 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.
With 47 per cent 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, Weber Shandwick 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).
Millennial consumers (those born between 1981 and 1997) respond in larger numbers to both “good for me” and “good for all” issues, but like the total sample, they tip the scale in favor of “good for me.”
Even executives recognise that providing and communicating “good for me” is an emerging hallmark of a strong company reputation. Senior executives at companies with highly esteemed reputations are much more likely than those at less reputable organisations to say their companies promote how healthy or good their products and/or services are (70 per cent vs. 55 per cent, respectively).
While there is a difference between companies on the basis of reputation when it comes to goodness, there is no significant difference between companies that market to consumers directly (B2Cs) and those that sell to other companies (B2Bs) – 64 per cent vs. 61 per cent, respectively.
Company behaviour matters
Consumers are closely watching companies’ actions. They form opinions about companies through not just what customers say about them (88 per cent), but also based on how companies react in times of crisis (85 per cent).The finding that company responsiveness is so important is a critical shift in reputation-building that should be addressed by all companies, large or small.
With more than one-third of global consumers (36 per cent) saying that they have discussions with others or share information about corporate scandals or wrongdoings, how a company responds to an issue or crisis today clearly impacts its integrity, credibility and trustworthiness. In fact, responsiveness to issues and crises is more important in driving perceptions of a company than what the media says (76 per cent), what employees say (76 per cent), and what the company says about itself – whether on its website (68 per cent), via its leaders (61 per cent), or advertising (61 per cent).
“Proactive reputation risk management has never been more critical than it is today. Preparedness is a must, with a plan that ensures agility in mitigating and addressing issues and crises,” as per Micho Spring, Weber Shandwick’s Global Corporate Practice Chair. “Weber Shandwick’s newest study on corporate reputation shows that the drivers of reputation are tilting, and that those companies that recognise and respond to this new hierarchy will win consumers’ hearts and minds.”
The challenge of globalising reputation
The majority of executives in the study (69 per cent) found it challenging to communicate their own company’s reputation across different countries, languages, and cultures. Executives who find it least challenging to communicate their own company’s reputation across the globe are most likely to work for companies that focus equally on parent and product reputation, it concluded. This shows that, especially for global companies, parent and product brand reputations are interdependent.
Reputation begins at home
The reputation of the parent company is often the make-or-break factor in purchase decisions. Nearly four in 10 consumers (38 per cent) say that the reputation of a parent company has altered their preference for which products and/or services they buy.
On the executive front, nearly nine in 10 global executives (86 per cent) report that a strong corporate, or parent, brand is just as important as – or even more important than – strong product brands. A full 83 per cent believe that product brands need to be transparent about their lineage, and 73 per cent believe that consumers care about parent companies. These beliefs are common to B2C executives and B2B executives alike. Executives recognise that consumers today are not just purchasing products or services for their functionality, but are also shopping by the reputation of the company.
Implications for companies
‘The Company behind the Brand II: In Goodness We Trust’ shows a world in the midst of a consumer revolution. Consumers are empowered by their influence on companies and know how to operationalise their empowerment through their words and deeds. Today's successful communicators and marketers must be aware that the corporate imperative based on this dynamic is two-fold:
At the product level, what products and services need to deliver is shifting from functional utility and basic quality to fulfillment of customer well-being – whether in the form of health, safety, or simply being “good for you”. 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.
Companies that do not yet have their fingers on the pulse of these changing dynamics and are not appropriately tapping into consumer priorities, and addressing risk issues need to rapidly catch up and seize these opportunities in order to stay competitive and outpace their peers.
“The research has identified the importance for companies to integrate overall well-being and ‘good-for-me’ into their marketing and communications. Increasingly, consumers are asking themselves ‘What’s in this for me?’” said Weber Shandwick’s Chief Reputation Strategist Leslie Gaines-Ross. Companies that care about their corporate reputation are working overtime to answer that very question, he added.