The Most Important Drivers of Corporate Reputation, Ranked

March 13, 2017

This article is included in these additional categories:

Brand Loyalty & Purchase Habits | Brand Metrics | Brand-Related | CSR & Environmental

The difference between a good and bad reputation can have a huge impact on consumers’ purchase and recommendation likelihood, according to the latest annual Global RepTrak® 100 report [download page] from the Reputation Institute. So what does it take to create and sustain an excellent reputation?

The report identified 23 reputation factors, ranking them on an index basis, where 100 is average. Just 7 factors over-indexed – with these factors explaining 40% of reputation, per the analysts.

Each of the top 4 factors was product-related:

  • Offers high quality products and services (index: 160);
  • Good value for money (132);
  • Meets customer needs (128); and
  • Stands behind products (126).

It’s notable that by far the biggest factor in corporate reputations is the perception of quality. Recent research has shown that product quality is the key determinant of brand loyalty, and CMOs indeed continue to believe that superior quality is the single biggest priority for their customers. Similar research on reputations has likewise found that products and services have the tightest connection with reputation.

Meanwhile, the next-biggest factors for corporate reputation pertain to corporate social responsibility (CSR), according to the Reputation Institute’s report. Specifically, a company is expected to:

  • Have a positive influence on society (124);
  • Behave ethically (110); and
  • Be fair in the way it does business (108).

Ethical business practices – along with high-quality products – are considered among the top building blocks for consumers’ trust in businesses and the most important core values for brands to embody. Studies also show that CSR has an impact on consumers’ purchase decisions.

Interestingly, while research suggests that treating employees well is the top driver of brand trust, the Reputation Institute finds less importance placed on these factors.

In fact, three of the 5 lowest-indexing reputation factors pertain to the workplace:

  • Demonstrates concern for health of employees (82);
  • Rewards its employees fairly (81); and
  • Equal opportunities (76).

The two others pertain to financial results, with consumers not caring too much if a company’s financial results are better than expected (77) or if it is a profitable company (82).

The World’s Most Reputable Companies

This year, Rolex emerges as the world’s most reputable company, with a RepTrak® Pulse score of 80.38. It’s followed by LEGO Group (the world’s “most powerful” brand), The Walt Disney Company, Canon and Google.

The results differed by region, with Google coming out on top in Latin America and second to Rolex in North America.

Google fared particularly well in measures of innovation, performance, citizenship, leadership, and workplace, while Rolex was the top-rated in the all-important products/services driver.

Of the 100 companies measured, the one with the worst reputation was Volkswagen. It was the most disappointing to its customers last year, and likely has not yet fully recovered from its emissions scandal.

About the Data: The Reputation Institute describes its methodology in part as follows:

“The Global RepTrak® 100 is a study that Reputation Institute conducts annually to measure the reputation of the world’s 100 most highly-regarded and familiar global companies in 15 countries. Included firms must meet the following qualifications:

  • 1) Have a significant economic presence in the 15 largest economies;
  • 2) Have an above average reputation in its home country; and
  • 3) Have global familiarity over 40%.

It is the largest Global reputation study, with ~170,000 ratings collected in Q1 2017.

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