Presentation is loading. Please wait.

Presentation is loading. Please wait.

REPUTATION AND ITS IMPACT ON THE BOTTOM LINE

Similar presentations


Presentation on theme: "REPUTATION AND ITS IMPACT ON THE BOTTOM LINE"— Presentation transcript:

1 REPUTATION AND ITS IMPACT ON THE BOTTOM LINE
Michael G. Cherenson, APR Vice President The Cherenson Group Livingston, NJ, USA September, 2005

2 Goals and Objectives Provide an American perspective on reputation
Define reputation. Consider reputation’s impact on the bottom line. Identify who is responsible for “reputation.” Discuss ways to build a good reputation.

3 What is Reputation?

4 REPUTATION: A Dictionary Definition
The general estimation in which a person is held by the public. The state or situation of being held in high esteem.

5 REPUTATION: Corporate Reputation
A cognitive representation of a company's ability to meet the expectations of its stakeholders. Rational and emotional attachments. The net image a company develops with all of its stakeholders.

6 Brand reputation MARKETING Advertising Public Relations

7 According to Hill & Knowlton’s Annual Global Survey of Senior Executive Opinions on Corporate Reputation and Management: 66% of executives believe that “brand and marketing message” is either essential or important to the company’s reputation. Customers are increasingly placing the same emphasis on “brand recognition” and “corporate reputation” when evaluating a purchase decision.

8 Reputation BRAND Brand = Height (Awareness) x Width (Functional Appeal) Reputation = Depth (Expectation and credibility)

9 BRAND REPUTATION Brand is personality
Brand is what a company wants you to think and feel when you hear its name Brand is communication Brand is something you build Brand is a promise Reputation is character Reputation is what you really do think and feel when you hear the company’s name Reputation is behavior Reputation is something you earn Reputation is keeping the promise Source: Paul Holmes, The Holmes Report

10 Do What You Say You Will Do
DWYSYWD Do What You Say You Will Do

11

12 Is Reputation Important?

13 UNITED STATES FEDERAL RESERVE
As much as 47% of American companies' net worth is tied up in intangible assets like brand equity and reputation. ERNST & YOUNG 35% of a company’s value is attributed to various non-financial intangibles.

14

15 CHERENSON STUDY: REPUTATION V. SALARY
Consumers were surveyed by professionally trained data collectors using a CATI (Computer Assisted Telephone Interviewing) System. Respondent selection was randomized. A total of 2,400 adults (18+) were interviewed (800/poll). Each survey has a margin of error of +/- 3.5% at the 95% confidence interval. That is to say, 95% of the time, results will be within +/- 3.5% of the "true values" where "true values" refer to the results obtained if it were possible to interview every adult in the state.

16 QUESTION Which company would you rather work for, if all else were equal and your job would be the same in each… 1) Company A would pay you a salary that meets your needs. They have an excellent reputation overall. 2) Company B would pay you a higher salary, but their reputation overall is poor.

17 SOURCE:

18 REPUTATION & JOB PERFORMANCE
Is There a Link Between “Reputation” and Job Performance? 98% of HR professionals and 91% of employees say yes.

19 CHERENSON STUDY: REPUTATION V. PRICE

20 QUESTION Which company would you rather purchase a product or service from, if the quality of the product or service was equal… 1) Company A, = excellent reputation + slightly higher prices than average. 2) Company B = poor reputation + slightly lower prices than average.

21 SOURCE:

22 REPUTATION & STOCK PRICE
Highly Credible Companies have a 12% higher price/earnings ration than those with lower profiles (YANKELOVICH/FORTUNE)

23 POWER OF TRUST: REPUTATION = “CAN I TRUST YOU?”

24 “Trust is like the air we breathe
“Trust is like the air we breathe. When it’s present, nobody really notices. But when it’s absent, everybody notices.” -- Warren Buffett Reputation & Trust

25 CHERENSON STUDY: TRUST
AGREE OR DISAGREE: Trust is the most important consideration I make, even more than political viewpoint, when I consider who to vote for, and more important than price and quality when I consider who I do business with, or who I invest with.” SOURCE:

26 We Agree 85% agreed, with 66% saying they strongly agreed and 19 percent saying they somewhat agreed; only 10 % said they disagreed with the statement. SOURCE:

27 Trust is Key, But People Don’t Trust!
NGO’s are the most trusted around the world. (Edelman) 80% only believe info if it comes from multiples sources. (Edelman) 75% of Americans have limited confidence in large business (ABC News) 73% say most large US Corporations are NOT Trustworthy. (Roper) 83% believe investment bankers have conflicts-of-interest (US Trust)

28 Trust is Key, But People Don’t Trust!
79% question reliability of financial statements (US Trust) 67% do not trust corporate managements (US Trust) 65% do not trust auditors (US Trust) 62% of consumer say that CEOs are not doing enough to build or restore confidence in American business (Golin/Harris)

29 + A Simple Equation… Reputations is More Valuable
Lack of Trust Information Overload “Tabloidization” Pressure on CEOs Savvy Consumers Empowered Employees International instability Minority Influence Reputations is More Valuable & Fragile Than Ever Before +

30 How do you build A good reputation?

31 REPUTATION MANAGEMENT
Identify organization’s value proposition; prioritize key stakeholders in terms of value and risk, and then… Manage the organization to match the value proposition with that of key stakeholders with consistency and continuity over time. (Schreiber)

32 PUBLIC RELATIONS AND REPUTATION MANAGEMENT
PRSA Definition: "Public relations helps an organization and its publics adapt mutually to each other." Grunigs’ Two-Way Symmetrical Model of Public Relations: Applying research and dialogue to bring about changes in ideas, attitudes and behaviors of both the organization and its publics – i.e., building/maintaining reciprocal relationships.

33 HOW TO BUILD CREDIBILITY? COMMUNICATE.

34 Public Relations At first, it was:
“Here’s the message, go deliver it.” Then it became: “What should the message be?” Today, more and more, it’s: “What should we do? — Harold Burson New York Times August 9, 1929

35 Who is Responsible for “Reputation”
90% of CEOs said communications is “very important” or “important” for managing reputation (Burson-Marsteller) 55% of marketing managers say the PR department is responsible for “Reputation” (PR Week)

36 Who is Responsible for “Reputation”
46% of corporate communalization professionals say the PR department is responsible for Reputation (PR Week) 65% of CEOs worldwide believe it is their personal responsibility to manage their companies reputation. (ORC INTERNATIONAL)

37 REPUTATION – FROM THE TOP DOWN
"It's clear that CEOs believe communications and reputation are a shared responsibility. The CEO may be the primary individual, but there needs to be some resonance deeper inside the organization." -- Chris Komisarjevsky, president & CEO, Worldwide, Emeritus, Burson-Marsteller worldwide “… public relations occupies an enhanced position of importance for today's CEOs. They are using PR not only to deflect corporate problems but to drive business." . -- Julia Hood, editor-in-chief PRWeek Magazine

38 How PR Can Evolve Into Chief Reputation Officer
Issues management.– be the antenna, identify and manage issues that threaten the organization Think like a business person – identify links between PR and the organization’s agenda Results – develop clearly defined objectives and measure results. Show a link between PR and business outcome.

39 How PR Can Evolve Into Chief Reputation Officer
Network internally – be a resource to the entire organization Think organization-wide -- practice PR as if the entire organization is depending on it Ask tough questions and don’t be afraid to say NO – be an advocate for the employee, the shareholder and the public.

40 The 18 Immutable Laws of Corporate Reputation (Alsop)
ESTABLISHING A GOOD REPUTATION Maximize your most powerful asset – Your Reputation Know your reputation Understand that you have many publics Live your values and ethics Be a model citizen Convey a compelling corporate vision Create emotional appeal Cherenson: Think Long-Term & Anticipate Communicate continually MAXIMIZE – REPUTATION IS AN ASSET -- Fed Ex UNDERSTAND THAT YOU HAVE MANY PUBLICS – ARTHUR PAGE – “You operate at the permission of the public) LIVE YOUR VALUES AND ETHICS -- J&J, TYLENOL (CREDO – “Our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. INTERESTING STORY ABOUT VALUES -- The hospitals in the University of Michigan Health System have been encouraging doctors since 2002 to apologize for mistakes. The system's annual attorney fees have since dropped from $3 million to $1 million, and malpractice lawsuits and notices of intent to sue have fallen from 262 filed in 2001 to about 130 per year BE A MODEL CITIZEN – (PAUL REVERE)

41 The 18 Immutable Laws of Corporate Reputation (Alsop)
KEEPING A GOOD REPUTATION Recognize your shortcomings Stay vigilant Make your employees your reputation champions Control the Internet before it controls you Speak with one voice Beware of “reputation rub-off” Cherenson: It’s about connecting with people Rich Communication Channels – with lots of interaction -- are key. Leadership is essential CONTROL THE INTERNET Shares of Apple Computer dropped almost 5 percent on June 3 on speculation that the company might be experiencing a slowdown in sales of iPods. The New York Times sourced a report on the independent Web site, AppleInsider.com, as one of the reasons for the decline.

42 The 18 Immutable Laws of Corporate Reputation (Alsop)
REPAIRING A DAMAGED REPUTATION Manage crisis with finesse Fix it right the first time Never underestimate the public’s cynicism Being defensive is offensive If all else fails, change your name It takes 4 years for a company to rebuild a blemished reputation. -- BURSON MARSTELLER/ROPER

43 -- Jim Collins, author of
"On average... it takes seven years to get to the point where a company shifts from good to great.“ -- Jim Collins, author of Good to Great: Why Some Companies Make the Leap... and Others Don' t

44 Q&A

45 Michael G. Cherenson, APR Vice President The Cherenson Group 3 Regent Street Livingston, NJ 07039, USA


Download ppt "REPUTATION AND ITS IMPACT ON THE BOTTOM LINE"

Similar presentations


Ads by Google