Robert Schooling

In my experience, senior executives can be skeptical of corporate reputation campaigns because they are often unlike any other initiative within the company. However, the tough questions asked by the C-suite can be used to the advantage of corporate communications practitioners, helping to frame their thinking about such campaigns and the possible outcomes.

Here are some common and very rational objections:

  • For those who come from marketing backgrounds, the budget associated with a corporate reputation campaign appears miniscule, a mere “drop in the ocean,” unlikely to have any measurable impact.
  • The financial markets value results, not spin.  Analysts aren’t likely to be persuaded by a campaign, they are persuaded by numbers.  How will this campaign improve our perception among financial audiences?
  • It is customer service, sound governance, product quality and innovation that determine reputation.  That’s where we should focus.  Everything else is “fluff.”

Because all of these assertions are true in their own way they can be difficult to overcome. The issue is really one of perspective and ensuring that you are framing your campaign in a way that answers these issues up-front.

Let’s take a look at each issue.

Insufficient budget to move the needle.  Marketing differs substantially in a number of respects.  The total audience is typically vastly larger than the audience for a reputation campaign.  Being highly specific around target audience may help executives understand that the cost-per-target numbers are more realistic.  There are also differences in the nature of the “ask” in a reputation campaign vs. a marketing campaign that vary by campaign.

The financial markets value results.  Absolutely true.  There are two potential answers to this objection.  First, financial audiences may not be primary targets.  Second, it is true that financial audiences value numbers, but they also value a “story.”  After all, analysts have to look into the future and make decisions about which company is best positioned for success in a given industry.  This determination will, at least in part, factor in their perceptions of a company’s goodwill among customers, policymakers, and other stakeholders.

Customer service, sound governance, product quality and innovation determine reputation.  Again, absolutely correct.  That’s why the organization spends 99.9% of its resources in these areas.  However, some very important audiences may not be customers or may have interests in your company that go beyond the purchasing experience.  Even consumers may be interested in factors that are not strictly “consumer” in nature, such as your environmental record or employee practices. How will they acquire that knowledge of your company in the absence of communications?

The goal of reputation campaigns is to inform/reinforce with those (e.g., policymakers) who may have little or no direct experience with your business, but still need a way to assess its reputation. Said another way: to assess whether or not they should trust the institution to deliver useful services and trusted information.  They are informed indirectly through your campaign about your value, motives, performance, etc.  

The Million-Dollar Question

I’m often asked if there is “proof” that reputation campaigns make a difference.  There is ample research – both from private sector and academic researchers to suggest that it does.  The challenge is defining the endpoint: “What ‘difference’ would you like it to make?”  Unlike a marketing campaign with a singular concrete endpoint (increase sales of product X), a reputation campaign has multiple outcomes. In many ways the end point of a reputation campaign is…reputation which influences a variety of more concrete outcomes.  What senior executives are often asking is a more philosophical question:  does reputation matter and can we really influence our reputation through communications?

Does Reputation Matter?

Research has consistently demonstrated that stakeholder audiences inform their actions based on reputation. Below are a few recent studies/surveys that demonstrate the importance of reputation.

54% of U.S. opinion elites have decided not to engage with/do business with a company because of something they learned about how it conducts itself.  37% of opinion elites said they proactively tried to influence their friends’ and family’s perceptions about a company based on what they’ve learned about the company. (Nielsen, 2014)

87% of executives surveyed rate reputation risk as more important or much more important than other strategic risks their companies are facing. In addition, 88% say their companies are explicitly focusing on managing reputation risk. 41% of executives who experienced a reputation risk event say loss of revenue was the biggest impact. 37% percent of the surveyed executives say regulatory investigations were a major consequence of a reputation risk event. (Deloitte, 2014)

Many industries—banking, telecom, transport, and energy, to name a few—face an increasing level of regulation that often puts 30 to 50 percent of EBITDA at stake. Companies that proactively engage with regulators are significantly more likely to achieve their preferred outcomes. (McKinsey, 2015)

Can we change reputation with communications?

It is true that our reputation is built on what we do.   However, since reputation is perception, our reputation will suffer if too few people know what we do or hold an opinion about us that is contrary to what we believe to be a true representation of our organization.

Reputation campaigns are simply a vehicle for informing important audiences about your motives, your intentions, and your contributions so that they can better understand your organization and make an informed choice about how to engage with you. Reputation can take many forms, but every organization should be concerned with ensuring that its most important stakeholders are well informed.

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