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Talking ’Bout Your Reputation

What drives business reputations – both good and bad – is complicated, fascinating, important stuff

May 1, 2015

by Tim Querengesser

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When talking about business reputation, it helps to first examine the career trajectories of celebrities Lindsay Lohan and Robert Downey Jr. Lohan, you will recall, was a child star – freckled, beautiful, mature – who drove box-office success for many years, only to tumble into drugs and scandal as she grew into adolescence; her career has yet to recover. Downey Jr., on the other hand, went from a B-level actor to a cocaine addict. He appeared in court, scandalized, only to become Hollywood’s most marketable beau in his 40s. One actor’s reputation was weak, the other’s strong; one actor’s actions drove their reputation down, the other’s up.

The lessons of Lohan and Downey Jr. are applicable for companies. Reputation is about strength and awareness drivers, and about who knows you and what they think when they hear your name. “Reputation is the enormous bubble into which your brand capital, your financial capital, you reputational capital, go,” says Ian Large, vice-president of the Alberta division of Leger Marketing, the national research firm.

Large should know. Each year, Leger polls both consumers and businesspeople about businesses and their reputations. And each year, Large says, the same truisms emerge nationally and within Alberta’s reputation data. “Reputations ebb and flow, though they move slowly,” he says. “The value of a strong reputation is that you’re able to withstand some blows. The best example is Maple Leaf Foods. They had a strong reputation, took a huge blow, responded absolutely perfectly and now their reputation has recovered.” A strong reputation “creates a built in resilience.”

What drives a company’s reputation forward, then? And are those drivers the same for consumers as they are for businesspeople? The answer, Large says, comes down to whether people are aware of your company and if they think favourably of it. On the Leger scale, if 100 people know about your company and all of them think favourably, you score a perfect 100. Conversely, if 100 people know of your company and all think it’s a joke, you score minus 100. This helps explain how some companies, such as Mark’s, have such high scores on Leger’s survey (see “Different Strokes”), while other well-known companies in Alberta, such as Rogers, score in the negatives. “I think Rogers is particularly disliked in Alberta,” Large says, chuckling. “That it’s the only one [in the negative] is worrisome.”

The drivers on the consumer side of the equation are the same as those on the business side, Large says. Honesty, transparency, high-quality product or service offerings, providing value for money and offering good customer service all drive reputation forward. “Those are table stakes,” Large says.

But what Large finds interesting is the difference between consumer reputation drivers and those for businesses viewing other businesses. “Innovation for consumers doesn’t really make much of a ­difference,” he says, “whereas for businesses, that’s an important driver.” His example is Suncor and other oil and gas companies. They are constantly innovating, he says, and this sees them build reputation among other businesses. But that innovation is either hard to understand or immaterial to how the companies interact with consumers, and that is reflected in their lower scores in consumer reputation. Businesses value innovation, while consumers are quite practical and reward value for money.

That even holds true, Large says, as society undergoes large attitudinal changes. The survey’s results, he says, show that concern for the environment is an ­important driver. “It’s not as significant as we might think, but that’s going to climb the tree of importance,” Large says. “Similarly, if a company cares for societal well-being, [its reputation score increases]. But, particularly on the consumer side, those two drivers are still eclipsed by the much more practical, day-to-day transaction stuff.”

Why should companies care about reputation? Dollars and cents, Large says. “If I’m a consumer or business choosing products or services, I’ll more often than not choose the one I’m aware of or I have a good impression of.” It’s as simple as that.

 

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