Which Scenarios Do Consumers Believe Are Most Damaging to Corporate Reputations?

TheHarrisPoll-Most-Damaging-Scenarios-Corporate-Reputations-Feb2016More than one-third (37%) of US adults have decided not to do business with a company because of something they learned about how the company conducts itself, and that figure rises to 57% among “opinion elites” who are more informed, engaged and involved in current issues and who exert influence on the general public. That’s according to the latest annual Harris Poll RQ, which outlines the most damaging scenarios in consumers’ minds.

The most damaging scenarios, per respondents, are:

  • Lying or misrepresenting the facts about a product or service (80% very/extremely damaging);
  • Intentional wrongdoing or illegal actions by company leaders (corporate malfeasance; 80%); and
  • A security or data breach that exposes personal information (74%).

It’s interesting to see that dishonesty is as damaging as intentionally breaking the law. Numerous studies (such as this one and this one) have shown that for consumers, honesty is one of the most important attributes for a brand to display and embody.

By comparison, the Harris Poll respondents are more forgiving of employee-related scenarios – whether it’s employee conduct that reflects poorly on the company, or a strike or work stoppage.

Among the various industries tracked, the technology sector maintains the best reputation among respondents, as it has for several years now. Retail edged ahead of consumer products for the second rank (last year’s #2, travel and tourism, was omitted from these results), while government and tobacco continue to be at the bottom of the list with very few positive mentions. Those findings are generally in line with other research from Gallup on industry ratings.

The Harris Poll report notes that the pharmaceutical industry’s reputation has declined for the second consecutive year, while the financial services industry’s reputation has improved again (in line with this report from Pew) and the automotive sector’s reputation has rebounded.

Overall, among the 100 most visible companies to the general public, Amazon.com returns to the top with the best reputation this year, supplanting last year’s leader Wegmans Food Markets. A recent study from YouGov indicates that Amazon enjoys the best word-of-mouth in the US. Meanwhile, Apple rose 7 spots to the #2 ranking in this year’s Harris Poll study, and actually leads all brands among the “opinion elite.” Both Apple and Amazon benefit from their customers’ strong emotional engagement, according to a new Brand Keys study.

Beyond Amazon.com and Apple, Google, USAA and the Walt Disney Company round out the top 5 this year.

The rankings are determined using six reputation dimensions. The brand leaders of each dimension are as follows:

  • Emotional appeal: Amazon.com;
  • Products & services: Amazon.com;
  • Vision & leadership: Apple;
  • Financial performance: Apple;
  • Workplace environment: Google; and
  • Social responsibility: Publix Super Markets.

On the topic of social responsibility, the study finds that the general public is evenly split on the motives for corporate social responsibility, with 42% believing these efforts are motivated by PR and image and an equal 42% feeling that they are motivated by a desire to do what’s right.

Meanwhile, the most-improved brands in terms of reputation this year are AIG, Koch Industries, Goldman Sachs, Facebook and Sears. Most of those brands remain in the “poor” category of reputation, however. As for the most prominent declines, the Volkswagen Group shows the largest decline by a huge margin, plummeting from a reputation quotient score of 75.21 (“very good”) to just 54.75 (“very poor”). In fact, Volkswagen Group was the only company to fall into the “very poor” bucket this year.

The report demonstrates, however, that active reputation management can turn these fortunes around, showing how companies such as BP, Target, Toyota and GM have recovered in past years after significant declines in reputation.

About the Data: Harris describes its methodology as follows:

“The 2016 Harris Poll Reputation Quotient was conducted online in English, among more than 23,000 U.S. respondents from November 13 – December 24, 2015, with preliminary nominating waves of research conducted among 4,078 respondents from September 8 -10 and October 6 – 8, 2015. The Annual RQ study begins with a Nomination Phase, which is used to identify the companies with the most “visible” reputations. All respondents are asked, unaided, to name companies that stand out as having the best and worst reputations. Online nominations are summed to create a total number of nominations for each company. The final list of the 100 most visible companies in the U.S. is measured in the RQ Ratings Phase. In the ratings phase, respondents are randomly assigned to rate two of the companies with which they are “very” or “somewhat” familiar. After the first company rating is completed, the respondent is given the option to rate the second company. Companies are rated on their reputation on 20 different attributes that comprise the Reputation Quotient instrument. The attributes are grouped into six different reputation dimensions: Emotional Appeal, Financial Performance, Products and Services, Social Responsibility, Vision and Leadership, and Workplace Environment.

Respondents for this survey were selected from among those who have agreed to participate in Harris Poll and sample partner surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in an online panel, no estimates of theoretical sampling error can be calculated.”