Posts Tagged ‘company behind the brand’
Johnson & Johnson has launched a new corporate brand campaign. As I’ve mentioned here before and based on our research, corporate reputations are becoming increasingly important in this see-thru world. Weber Shandwick’s research, The Company behind the Brand: In Reputation We Trust, found that 87% of executives think that the corporate brand is as important as the product brand. And 70% of consumers will turn away from a brand if they do not like the company behind the brand. Our research also found that 86% of executives were increasing their efforts to build reputation. Therefore, it makes perfect sense for J&J to rethink what their overall reputation stands for and reconnect with consumers, health professionals and other key stakeholders as trust in companies declines and it is harder to stand out than ever before.
Michael Sneed, the head of global corporate affairs told Forbes, “The reputation of J&J is very important to us. We take it very seriously. We have a lot of data that we look at, both externally and internally. I wouldn’t say there was any one thing that precipitated [the campaign], and we certainly don’t do these things just for rankings. Reputation is something that’s born out of actions. The reputation is a reflection of people’s perspective on the actions that we do take.”
The new campaign is based on “for all you love, Johnson & Johnson.” Again, the company choose to focus on who they are, what they stand for and why consumers should invest in them both emotionally and selectively when there is an abundance of choice today. Sneed mentions that they want to participate in the great social media conversation that is happening today. A new campaign such as this makes it easier to say who they are when people’s attention spans are fleeting. Interestingly, the tag line is only about 35 characters so it should travel well in the twitterverse as well.
An article in the New York Times on purpose-marketing echos my firm belief that the company behind the brand matters more than ever. In fact, Stuart Elliott says it himself: “Purpose marketing is becoming popular on Madison Avenue because of the growing number of shoppers who say that what a company stands for makes a difference in what they do and do not buy.” These socially conscious buyers are avid researchers and they know whether the companies behind the products they are considering treat their employees well, have high quality products and are well-led. The article is about Panera’s new advertising campaign that is based on the company’s core values — “Live consciously. Eat deliciously.” Has a nice ring to it.
Take a quick look at our research on the company behind the brand for hard evidence that corporate and product reputations are blending. Perhaps I should coin a new phrase called reputation-marketing to join the marketing folks who now call reputation-building campaigns with a conscience purpose-marketing. Just about a year ago, I wrote a proposal for some new business and dubbed it reputation with a purpose. Has a nice ring to it too!
A new study was just released called the Champion Brand Index from APCO, another PR Firm. It caught my interest because it ties corporate reputation to sales which we all know to be true. The survey was conducted among 10,000 consumers around the world. If you follow my work, you know that we also examined the link between corporate and brand reputation in our Company behind the Brand research. The Champion Brand Index found similar strong ties between the two and I am happy to report them here in defense of the indivisibility today between the corporate and brand reputation:
- 40% of respondents say they decided not to buy a company’s products or service because they did not agree with the company’s practices, policies or activities
- 77% of respondents believe that corporations have a greater impact on their lives today than 10 years ago
- Nearly half say that global companies have a bigger impact on their lives than the government
- 67% say that it is as important to know how a company operates as it is to know what it sells
Good stats for continuing to make the case that corporate and product brand reputation are increasingly one and the same today with the vast penetration of the Internet and globalization shrinking the world. The fact that over three-quarters of consumers notice how corporations have become tabletalk in our lives is a good one to save.
Every week I think nothing new is happening in the world of reputation. And I am always wrong. There are always CEOs coming and going, companies that get into trouble and lose reputation points and new things to learn. That’s the best part. Here’s a few:
1. Booz Allen released their fabulous CEO Succession report. I read it every year and welcome the insights. This year they focused on new CEOs, a topic dear to my heart and book. This year they found that 14.2% of CEOs of the world’s 2500 largest public companies changed over. This is a sizeable increase from last year when the turnover rate was 11.6%. This increase makes sense because as boards battled the recession, it was not the opportune time to change chief executive reins. Better to batten down the hatches when times are tough. Strikingly, Bozo found that outsider CEOs are making a comeback. In 2011, 22% of all new CEOs were outsiders compared to 14% in 2007. That’s definitely surprising to me since the trend has been in favor of insiders for a while now. The possibility is that companies need fresh new ideas and outsiders with global experience as they now look to grow. You should check out the report because there always is a lot of fascinating information on the world of CEO transitions. For example, outsider CEOs are more likely to lose their jobs, the number of CEOs being appointed chairman has declined and nearly 90% of new CEOs have not been a CEO before. That last fact is astounding and perhaps why we get asked about our services on CEO First 100 Days as often as we do. In another post, I will provide Booz’s insights on advice on CEO’s first year in office.
2. Reputation Institute released its worldwide reputation findings on the Most Reputable Companies. Their headline reads, “Reputation Is Impacted More By What You Stand For Than What You Sell.” In their research, they found that “People’s willingness to buy, recommend, work for and invest in a company is driven 60 percent by their perceptions of the company and only 40 percent by their perceptions of their products.” That’s an important finding and mirrors Weber Shandwick’s results on the importance of the company behind the brand. We are on the same wavelength, clearly. They also found that only 11% of the top 100 companies have better reputations abroad than at home. “It’s because reputation isn’t something that’s easy to export,” says Nicolas Georges Trad, Executive Partner at Reputation Institute. Love that quote.
3. I also attended Spencer Stuart’s CMO Summit this week on innovation. It was illuminating in how innovation gets baked into companies from the head marketing honcho. Whereas one company CMO panelist was analytical in her approach, another was more artistic and qualitative. Goes to show that culture drives execution. From the panel, I learned about another usage of HIPPO which is always a bonus to me – it is a reference to the Highest Paid Person’s Opinion. Everyone in business knows what that means.
The New York Times had a very interesting article yesterday for a variety of reasons. But one reason that hit the spot was about how consumers make decisions and how the author went about choosing the right baby formula for his infant. After he and his wife researched every possible formula on the market and found that they were all basically the same, he came to this conclusion:
“Despite knowing this, I still insist on paying twice as much for Enfamil, which its maker claims is “scientifically designed.” (Aren’t they all?) I splurge because Mead Johnson is a 107-year-old company that has been promoting a single baby-formula brand for more than 50 years. I figure that it’s less likely to squander its name by skirting the rules or engaging in shoddy manufacturing than a company with less to lose. This peace of mind costs me about $7 per day.”
This is emblematic of our research on how the company behind the brand matters more than ever. The author was reassured in his purchase of Enfamil because he learned that the company behind it, Mead Johnson, had been around long enough that they were not going to risk their century-old reputation by messing around with the manufacturing and production of its baby formula. The parent company made a significant difference in a confirming to the writer that this was the better buy, even at a premium. And not only did this infant get to taste Enfamil but the writer blasted his choice around the world. There you go for serendipity public relations.
After reading this gem which was fairly upfront in the article, I kept reading. The Enfamil example led into the article’s main message which is that information overload is plaguing us all and making it increasingly hard to find what we are looking for unless we want to devote days to researching. ”Too much information, it turns out, is a lot like no information.” Therefore to deal with this information smog, people need guides orsherpas to guide their way through the data chaos. According to the author, “economists have a name for these cues that companies employ to convey their hidden strength: signaling.”
Reputation-building uses the strategy of signaling. Good reputations serve as a shorthand to identify whom you want to buy from. A company that is a best place to work for or most sustainable or trains its leaders best helps to narrow the choices between products. Do I want to buy my infant formula from a company that treats its people right? You bet. The thinking goes like this: if they treat their employees well,you can make the leap that they turn out safe products. In our research on parent brands, we had an open-ended question on why the parent company mattered when buying a product brand. Over and over, consumers mentioned that knowing the parent brand helped them sort out which products to buy. For example, one consumer said: “The integrity of a company will ultimately show in its products.”
The article also made me think about anniversary celebrations. Many companies make a big deal about how long they have been in busines — 50, 100 or 200 years. It turns out that it is good to do so in order to remind consumers and other stakeholders that there’s alot of reputational equity behind those promises.
Years ago at my former job, the research we did caught fire due to one simple finding. In fact, I used to think of myself as the 50 percent woman. Our research on CEO reputation revealed that 50 percent of a company’s reputation was attributable to the CEO. For some reason, this one simple factoid traveled around the world like wild fire. People just found it incredibly memorable. Part of the reason that the “50%” was so radioactive was because CEOs had became better known (Jeff Bezos, Steve Jobs, John Chambers, Jack Welch, Bill Gates, Carly Fiorina) and no one had really asked the question. Reputation as a body of knowledge was still nascent (not like it is now) but it was just about to tip. And tip it did.
In our new survey on the corporate brand, we asked the question again. It’s been about 10 years since that earlier study. And despite all the ups and downs in the stock market, CEO compensation issues, scandals, Occupy Wall Street, celebrity CEOs, the Internet, etc etc, the executives in our study reported that 49% of a company’s reputation is due to the CEO’s reputation.
As interesting, when we asked consumers — the general public — 66% say that their perceptions of top leadership also affect their opinions of company reputations a great deal to a moderate degree. Only 7% say that there is no link between the two. So CEO reputations arenot going over their heads whatsoever.
Thus as much as it might be politically incorrect to admit that the reputation of the CEO plays a significant role in how companies are viewed, it does. Of course, product quality matters most but leadership from the top, how they behave and what they communicate is not to be ignored. A large 59% of consumers cite leadership communications as influencing company perceptions. It no longer pays to be silent.
Another exciting day (despite the clouds and threatening rain here in NY). Weber Shandwick’s research was covered in today’s WSJ. B8. In the print edition. Can’t send you a link (although here is one if you can get in) to the online version since you have to subscribe! But you can get all the relevant info here from the press release and the executive summary.
Back at the beginning of the year, we released a terrific study (I really feel an affinity for this one) about the growing indivisibility of reputation and product brand. We had so much great data that we figured we would release at intervals. So here we are with the second installment of the global research, The Company behind the Brand: In Reputation We Trust – CEO Spotlight which explores the importance of executive leadership and communications to helping reverse the tides of waning trust in companies and solidify reputation. Here are some big learnings from the survey with KRC Research among 1,950 consumers and executives in two developed (U.S. and U.K.) and two developing markets (China and Brazil) :
- A full two-thirds (66 percent) of consumers say that their perceptions of CEOs affect their opinions of company reputations. Executives, like consumers, don’t overlook the importance of a leader’s reputation – they attribute nearly one-half (49 percent) of a company’s overall reputation to the CEO’s reputation. Say goodbye to the days when purchases were made solely on product attributes. Today’s consumer is savvy, well-informed and privy to a wide array of purchase options. Decisions are now increasingly based on additional factors (yes siree) such as the company behind the brand, what the company stands for and now….even the standing of its senior leaders.
- Nearly three in 10 consumers (28 percent) report that they regularly or frequently talk about company leaders with others. When consumers are asked what influences their perception of companies, approximately six in 10 (59 percent) say they are influenced by what top leaders communicate. Things have radically changed when you can say that consumers — the public square — are reacting to what leaders say. Corporate leadership communications are important across the globe, but to an even greater extent in emerging markets. Nearly two-thirds of Chinese consumers (64 percent) and nearly three-quarters of Brazilian consumers (72 percent) rely on executive communications when learning more about a company. For those companies growing in emerging markets, this is important.
- Respect for corporate leaders – CEOs and other corporate leaders – has taken an especially large hit in developed markets – 72 percent of U.S. and 71 percent of U.K. consumers have lost respect in the past few years. Not such a surprise to me because the past few years have been hard on everyone. A bit different in developing markets however: Chinese consumers are evenly split on their changing opinions of corporate leadership (35 percent lost respect vs. 38 percent who increased respect). Brazilian consumers are more likely to have increased their respect for top executives than decreased their respect (33 percent vs. 21 percent, respectively).
Here’s the last word that holds a lot of punch in my book….a large 60 percent of a company’s market value is attributed to its reputation. Sixty percent. That’s no small change. Get those execs on the communications trail sooner than later.
P&G is announcing its new corporate campaign that is a “global serenade to mothers.” It is covered in an article today. The reason this is big news to me (and I am not an Olympian’s mother) is that it is part of the P&G initiative to focus on the corporate brand behind the products they sell. Our research on The Company behind the Brand: In Reputation We Trust is all about the increasing interdependence between corporate and product brand reputation. As the global CMO says, “P&G is in the business of helping moms.” Or he could have said that P&G is in the business of building its corporate brand reputation. The new campaign is focused on the moms of athletes, particularly Olympians. Right on. As we learned in our recent survey, 87% of executives report that the corporate brand is as important as the product brand. And consumers also agree — 70% of consumers in markets around the world say that they avoid buying products if they do not like the company behind the brand. We are releasing some more information shortly from the study on the link between CEO and reputation as well as the impact of leadership communications so check here soon.
Reputation Institute came out this week with their RepTrak Pulse survey for the US. It measures the reputation of 150 largest US public companies among consumers. In addition to the usual who’s up and who’s down, RI reveals some interesting stats that confirm our research results on Companies Behind the Brand. I was delighted. As RI says in its press release, “Since 2009, U.S. companies have been competing in a new Reputation Economy, where WHO THEY ARE matters even more than WHAT THEY PRODUCE, according to general public sentiment. Framing this in the context of critical consumer behaviors, including purchase consideration, loyalty and recommendation–company or “enterprise” perceptions explain 60% of these behaviors, with product perceptions only accounting for 40%.” This is a big shift which we agree with.
In addition, RI asked Chief Reputation Officers (CEO, CMO and CCO) several questions and learned that 51% name the CEO as the person with the responsibility to set reputation strategy.
CEOs get the importance of corporate responsibility. At the recent Board of Boards CEO Conference in New York where heavyweight CEOs from around the world meet annually, the discussion on doing well by doing good was front and center. In an article on that meeting in Barron’s, the attending author said,
“How the times have changed. Whether investors like it or not, this era’s consumers do care deeply that the products they purchase are both cheap and do no harm to the environment, or, better yet, positively contribute to the state of the world. A full 59% of the queried CEOs felt consumers were “demanding greater levels of transparency regarding their companies’ community engagement initiatives;” 69% claimed such efforts on their part were “rewarded by consumers.”
Because consumers care, investors should care. Fact is, when a company’s cool and progressive spirit—it’s intangible goodwill— is undermined by the firm’s community-damaging business practices, investors often wind up paying the price.”
I was glad that CEOs noted that consumers care because that is what we found in our recent The Company Behind the Brand: In Reputation We Trust. Consumers are no longer passive about the companies that make the products they buy. They care and do not like being surprised if they find that the product they adore is made by a company they detest.
At the meeting, CEOs were asked whether their company’s community and social engagement was “rewarded” by its shareholders and I agree with the author that the response was positive. More than one-half (56%) believe shareholders reward firms for their corporate citizenship. And yes, we all know that it comes down to having the right metrics. It is awfully hard to pin down.
What is most interesting to me over the next 12 months is seeing how Apple’s reputation fares as the Foxconn issue of employee mistreatment stays in the news. I believe that companies get just so many chances to soar above the damaging reputational news and then it reaches the tipping point where it surely matters. I often refer to the BP Effect. BP had three chances to make their reputation right — the Texas City refinery episode, the Alaskan pipeline debacle and then the Gulf of Mexico oil spill. The third one did them in.