the economics of reputation
DESCRIPTION
A presentation on the Economics of Reputation by Oliver Rowe, YouGov Director of Reputational Research.TRANSCRIPT
• 114 members of the PRCA’s database:
• 55 in-house professional, 52 agency side, 4 freelance, 3 other
• 52% male, 48% female
• Senior respondents: average age 44; average of 16 years in the industry
Head of de-partment/team;
45%
Director; 35%
Other; 20%
In-House (55)
Partner/owner; 61%
Director; 22%
Other; 17%
Agency (52)
How much do you believe your/your clients’ Board of Directors thinks reputation is linked to the overall financial performance of your/their organisation?
Base: All respondents (114)
Very strong33%
Reasonably strong43%
Reasonably weak 17%
Veryweak
7%
Net: Strong link76%
Net: Weak/No link24%
“In three years reputation has moved from vanity - pretty much just seeing ourselves in the papers - to one where reputation issues account for one third of our strategy and business plan.”
In-house, Head of Department, transport sector
Base: All respondents (114)
“I agree that an enhanced reputation builds trust in your business/product. This leads to more prominence in the market place, increased sales and more influence.” In-house, Head of Department, 20+ years of experience
“If reputation is everything you say, everything you do and everything others say about you, I'd say it affects every aspect of your business.” Partner of multi-client agency
(open response)
Which three of the following 16 do you think are most directly linked to an improvement in corporate reputation?
Top 3 shown
Greater likelihood of receiving benefit of the doubt from stakeholders if reputational
damage incurred
More positive media coverage
Ability to recruit and retain the best staff
34%
41%
61%
Base: All respondents (114)
Which three of the following do you think are most directly linked to an improvement in corporate reputation?
Base: All respondents (114)
Don’t know
Greater celebrity endorsement
More effective/better priced acquisitions
Negotiation of more favourable terms with suppliers
Ability to raise capital or borrow money at better rates
Improved financial ratios such as return of capital employed, earnings per share
Ability to operate more easily outside the domestic market
Higher pricing of products
Higher share price (if a listed business)
Higher quality commercial partnerships
Higher sales levels
Higher profitability
Greater influence on Government
More effective marketing/sales activity
Greater likelihood of receiving benefit of the doubt from stakeholders if reputational damage incurred
More positive media coverage
Ability to recruit and retain the best staff
0%
0%
0%
1%
4%
4%
4%
9%
13%
15%
19%
24%
24%
24%
34%
41%
61%
Doing business
External affairs
Financial
Base: All respondents (114)
Which three of the following do you think are most directly linked to an improvement in corporate reputation?
Higher sales levels
Higher profitability
Greater influence on Government
More effective marketing/sales activity
Greater likelihood of receiving benefit of the doubt from stakeholders if reputational damage incurred
More positive media coverage
Ability to recruit and retain the best staff
25%
29%
15%
22%
39%
37%
66%
13%
18%
33%
25%
29%
45%
56%
In-houseAgency
Doing businessExternal affairs
Financial
Which of the following, if any, do you generally think of as direct benefits to a business that enjoys an enhanced reputation?
Which three of the following do you think are most directly linked to an improvement in corporate reputation?
Base: All respondents (114)
Greater celebrity endorsement
More effective/better priced acquisitions
Negotiation of more favourable terms with suppliers
Ability to raise capital or borrow money at better rates
Improved financial ratios such as return of capital employed, earnings per share
Ability to operate more easily outside the domestic market
Higher pricing of products
Higher share price (if a listed business)
Higher quality commercial partnerships
Higher sales levels
Higher profitability
Greater influence on Government
More effective marketing/sales activity
Greater likelihood of receiving benefit of the doubt from stakeholders if reputational damage incurred
More positive media coverage
Ability to recruit and retain the best staff
0%
0%
1%
4%
4%
4%
9%
13%
15%
19%
24%
24%
24%
34%
41%
61%
29%
22%
37%
33%
22%
26%
44%
50%
65%
64%
51%
65%
75%
75%
87%
92%
AnyTop 3
Doing business
External affairs
Financial
Which of the following, if any, do you generally think of as direct benefits to a business that enjoys an enhanced reputation?
Base: All respondents (114)
Greater celebrity endorsement
More effective/better priced acquisitions
Negotiation of more favourable terms with suppliers
Ability to raise capital or borrow money at better rates
Improved financial ratios such as return of capital employed, earnings per share
Ability to operate more easily outside the domestic market
Higher pricing of products
Higher share price (if a listed business)
Higher quality commercial partnerships
Higher sales levels
Higher profitability
Greater influence on Government
More effective marketing/sales activity
Greater likelihood of receiving benefit of the doubt from stakeholders if reputational damage incurred
More positive media coverage
Ability to recruit and retain the best staff
31%
32%
34%
41%
29%
36%
56%
66%
73%
73%
59%
61%
76%
81%
83%
93%
27%
11%
40%
25%
15%
16%
31%
33%
56%
55%
42%
69%
75%
67%
91%
92%
In-houseAgency
Doing business
External affairs
Financial
q12. Which of the following, if any, do you generally think of as direct damage to a business that suffers from a poor reputation?
Inability to raise capital or borrow money at better rates
Lower share price (if a listed business)
Poorer quality commercial partnerships
Lower profitability
Less influence on Government
Less effective marketing/sales activity
Greater likelihood to not receive benefit of the doubt from stakeholders if incur reputational damage
Lower sales levels
More negative media coverage
Inability to recruit and retain the best staff
29%
38%
43%
45%
55%
61%
61%
63%
76%
81%
Base: All respondents (114)
Against which of these, if any, is the performance of your Communications team measured?
Base: All respondents (114)
Higher quality commercial partnerships
Greater likelihood of receiving benefit of the doubt from stakeholders if reputational damage incurred
Ability to recruit and retain the best staff
Higher sales levels
Greater influence on Government
More effective marketing/sales activity
More positive media coverage
15%
20%
31%
34%
25%
56%
80%
18%
27%
24%
20%
45%
53%
87%
In-houseAgency
Doing business
External affairs
Financial
All others below 10%
How much do you think each of these groups believes day-to-day management of your/their corporate reputation affects the organisation’s bottom line?
General staff
Senior managers
Board
CMO
CFO
CEO
14%
31%
41%
56%
25%
68%
47%
47%
39%
23%
36%
24%
Not at all DK
Base: All respondents (114)
Senior management care less about journalist criticism than they used to
Employees comms more important than external comms
We/my clients are relatively weak on social media compared to competitors
Crisis communications PR plan tested in last 12 months
CEO/ leader is big supporter of PR
3%
4%
9%
25%
49%
29%
21%
33%
15%
38%
37%
51%
39%
19%
10%
26%
20%
16%
35%
2%
5%
4%
3%
6%
2%
Strongly agree Slightly agree Slightly disagree Strongly disagree DK
q15 To what extent do you agree or disagree with each of the following statements?
Base: All respondents (114)
YouGov research for the BDO/QCA Sentiment Index, July 2014:
• Of 119 listed small & mid-cap business, 44% have experienced internet allegations or rumours
• 71% were on bulletin boards or discussion forums, 49% on blogs and 41% on social media
• Effects of the allegations or rumours:
• 79% of those who have not yet experienced online allegations or rumours worry it will impact their share price at some point
Positive impact Negative impact
Share price 7% 28%
Employee morale 6% 32%
Investor confidence 3% 37%
• Industry believes there is now a strong connection in senior management’s mind between reputation and financial performance, but still a bit of a struggle with the CFO
• Enhanced sales is the most spontaneously mentioned bottom line benefit of an enhanced reputation but ability to recruit and retain the best staff is the most chosen general business benefit
• In-house cite less direct benefits of an enhanced reputation than agency professionals
• Few businesses assess PR’s performance with key financial metrics, though ‘more effective marketing and sales activity’ cited by half and higher sales by a quarter, but positive media coverage is by far the leading measure
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