Consumers Look Beyond Industry To Size Up Company Reputation

When it comes to corporate reputations, the ones who have been doing things right are continuing to do so. As for the others, improvement needs to be made.

According to Harris Interactive's ninth annual corporate reputation survey, corporate America's reputation has declined, and the companies that had the worst marks in 2006 dropped again in 2007. But the companies at the top of the list increased their standing.

"While the overall image is down, the American public has grown smart enough to discern those that are proactive about their reputations and give them credit for it," Robert Fronk, senior consultant of reputation strategy at Harris Interactive, tells Marketing Daily. "You're seeing the public being smarter with the information they're getting."

Of the top 30 companies on the Reputation Quotient survey, 19 of them (63%) improved their scores from 2006, while only 11 (37%) saw their scores decline. By contrast, of the bottom 30 companies, less than half (47% or 14 companies) improved their scores. The remaining 16 had declining scores. Those at the top of the list are taking a "proactive approach" toward managing their reputations, which is contributing to their increases. According to the survey, 56% of American consumers said companies should communicate good deeds through advertising and press releases, while 38% said they should limit those promotions to secondary places such as annual reports and Web sites. Only 6% said they should not publicize good works at all.



For its Reputation Quotient survey, Harris asked more than 20,000 people about how companies rated in six categories: emotional appeal, products and services, social responsibility, vision and leadership, workplace environment and financial performance.

Google topped this year's list--scoring first or second in categories such as financial performance, social responsibility, vision/leadership and workplace environment. Other companies making the top 10 were: Johnson & Johnson, Intel, General Mills, Kraft Foods, Berkshire-Hathaway, 3M Company, The Coca-Cola Company, Honda Motor Co. and last year's list topper, Microsoft.

Overall, the reputation of corporate America is dropping, with 71% of consumers saying its reputation is either "not good" or "terrible" (compared with 69% in 2006). Fifty-one percent of Americans said corporate reputation had declined in the past year, while 38% said it remained the same. Only 11% said it had improved.

Despite that outlook, five companies (Google, Johnson & Johnson, Intel, General Mills and Kraft) had reputation quotient scores that were considered "excellent," (a reputation quotient score higher than 80), the highest number since 2001. Similarly, only one company, Halliburton, had a reputation quotient score lower than 50. In 2002, five companies had scores lower than 50.

Several industries' reputations declined last year, led by the airline industry, for which 74% of Americans gave it negative marks (down 5% from last year). Other industries that saw declines included consumer products (down 4%), financial services and insurance (down 4%), pharmaceutical (down 2%) and retail (down 2%).

It's notable, however, that some companies had strong reputation scores despite the view of their industries. Kraft, Coca-Cola and General Mills, for example, make the top 10, although they are part of the consumer products industry, he says. That--along with the increase in companies scoring quotient scores higher than 80--shows that consumers are more discerning about individual companies within sectors of business.

"In the past, there had been a tendency to throw the baby out with the bathwater," Fronk says. "[Now], consumers are really trying hard to identify those companies that are behaving differently."

And behaving differently can have an impact. According to the survey, companies with the highest reputation scores were also the ones most likely to be recommended by consumers for products and/or investment. "Companies that pay attention to enhancing their reputation see bottom-line results," Fronk says.

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