By Weber Shandwick
Global survey on trustworthy brands
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"The Company behind the Brand: In Reputation We Trust" illustrates the challenging consumer landscape facing today’s marketing and communications executives. The research identifies six key insights revealing a world where consumers no longer just buy products based on their own merits but also shop by company reputation.
“Consumers are using their dollars as a vote of confidence in companies they trust,” said Weber Shandwick’s Chairman, Asia Pacific, Tim Sutton. “As our research confirms, corporate and brand reputations are now nearly indivisible. The company standing behind the brand assures consumers that they can trust the quality, ethics and safety of the brands they are buying.”
The importance of a company’s reputation matters more than ever and when unified with the reputation of its product brands creates one powerful “enterprise” brand. As Weber Shandwick’s Executive Vice President of Public Affairs, Asia Pacific, Alistair Nicholas said, “A strong corporate reputation is essential to unlocking the full value of the enterprise and strengthening its brands, products and services as a result.”
Weber Shandwick’s research reveals six new realities on the interdependence of corporate and brand reputation:
1. Corporate brand is as important as the product brand(s). The leading reasons the vast majority of executives (87 per cent) believe that a strong corporate brand carries as much weight as strong product brands is their recognition that product brands benefit from the overall reputation of the company (65 per cent) and that people care about the companies behind the brands they buy (55 per cent). Executives in China and Brazil are even more likely to agree in the equal prominence of corporate and product brands (96 per cent and 93 per cent, respectively).
2. Corporate reputation provides product quality assurance. Products are the beneficiaries of strong corporate reputations. Over two-thirds of consumers report avoiding products made by companies they do not like and checking labels to see who the parent company is.
- 70 per cent avoid buying a product if they don't like the company behind the product
- 67 per cent are increasingly checking product labels to see what company is behind the product
- 61 per cent get annoyed when they can’t tell what company is behind a product
- 56 per cent do research to learn about the companies that make what they buy
- 56 per cent hesitate to buy products if they can’t tell who makes them
Consumers are exerting greater control over what brands they buy. In fact, when asked on an open-ended basis, consumers often used the word “assurance” to describe the value of the company behind the brand. To many, a highly-regarded corporate reputation engenders good feelings about a company’s products and importantly, provides assurance that the brands will be of high quality, ethically sourced and made responsibly. As one consumer said, “It is the company you are financially supporting when you buy its product. We have too many choices to buy a product from a company we don't like.”
3. Any disconnect between corporate and product reputation triggers sharp consumer reaction. Over one-half of consumers (54 per cent) report being surprised to find out that a product or service they liked was made by a company they did not like. When asked what they do in response, surprised consumers said they most often stop purchasing the product (40 per cent) or search online to dig deeper into what other products are made by the company (34 per cent). Surprise about a product’s lineage does not usually work to the company’s benefit – surprised consumers are twice as likely to stop buying the product as they are to continue buying it.
4. Products drive discussion, with reputation close behind. Wrong-doing overshadows right-doing. Consumers were asked what they talk about when they discuss companies. At the top of the list is products — nearly seven in 10 consumers (69 per cent) say they frequently or regularly discuss how they feel about a product they bought. Also included among their top five talking points are customer service, how employees are treated, company scandals or wrong-doing, and their feelings about the company as a whole (its reputation). Consumers report that they are more likely to discuss corporate scandals and wrong-doing (43 per cent) than corporate good deeds (37 per cent), environmental protections (31 per cent) and community services (29 per cent).
What topics do consumers frequently or regularly discuss with others?
69 per cent - How you feel about a product you have purchased
55 per cent -The quality of specific companies’ customer service
45 per cent - How specific companies treat their employees
43 per cent - News about a scandal or wrong-doing at specific companies
40 per cent - How you feel about a company as a whole / its reputation
37 per cent -- News about good deeds a specific company does
33 per cent - The financial performance of specific companies
32 per cent -- How specific companies are using social media
31 per cent - What specific companies are doing to protect the environment
30 per cent - Specific companies’ websites
29 per cent - What specific companies are doing to help those in their communities
28 per cent - Specific corporate leaders, such as CEOs or other executives
5. Consumers shape reputation instantly. What sources of influence move consumers’ perceptions of companies? Not surprisingly, consumers say that word of mouth is the leading influence (88 per cent) when it comes to impacting opinions of companies. Also influential are online reviews (83 per cent) and online search results (81 per cent). Brazilian consumers rate more traditional sources about companies — news sources, awards and advertising — as significantly more important than consumers in the other three markets.
6. Corporate reputation contributes to company market value. Most admired status carries more weight than financial earnings. Executives estimate that, on average, 60 per cent of their firms’ market value is attributable to its reputation. This high value explains why companies have ramped up their reputation-building activities, with the vast majority of executives (86 per cent) reporting that their companies increased their efforts to build reputation over the past few years.
For consumers and executives alike, the reputation of a company is perceived as more important than positive financial earnings. More than half of consumers say they are more confident in buying products from a company with a most admired standing than one with a positive share price forecast. Nearly six in 10 executives say they would rather see their companies in the news for a most admired standing than a positive share price forecast. The findings imply that both consumers and executives now recognise that reputation is long-lasting and enduring while financial performance can be cyclical and short-term.