Summary of this study conducted by Weber Shandwick and KRC Research is provided by the IPR Street Team, a group of student writers who help IPR bring the latest research that matters to the practice. To view the full report, visit here.
As we look to the brands and organizations that we have grown up with and grown to love, the public relations field has begun to notice a change in the public’s behavior. This change has become increasingly noticeable in the past few years and it is the fact that people no longer just care about the goods and services an organization provides. Rather, they care about what an organization stands for and works towards within their given industry. While business models and prestige are important, this report explains just how essential corporate reputation has become when determining the success of an organization.
Weber Shandwick and KRC Research conducted an online survey of 2,227 executives in 22 global markets for this study. Researchers ensured that there were 100 executive respondents in each market. Markets in Mexico, China, the United States, Canada, Spain, and many other countries were included. Executives who took the survey were in mid- to high- level positions at companies with at least $500 million in revenue in a variety of different industries.
One of the most important findings is that global executives attribute 63% of their company’s market value to their company’s overall reputation. However, there is a large and important segment of executives that attribute at least 76% of their market value to the concept of reputation. The latter group of executives represents organizations that are utilizing their company reputations in the most effective way possible and are ensuring maximum financial returns because of that reputation.
Overall findings from this study identified five different understandings about reputation and what drives it in international markets today. These include:
- Reputation is omnidriven. Reputation is impacted from all sides and is dependent on many different factors. Overall, everything matters to reputation today. The report found that there are 23 drivers of corporate reputation. These drivers include quality of products or services, corporate culture, industry leadership, and respect for customer, to name a few.
- Reputation is influenced by the communication of values. Executives stated during the survey that a company’s ability to communicate and deliver upon its mission, values and vision is one of the most important drivers of reputation. This is particularly important within public relations and communications, as we see the impact it can have on a company’s success.
- Board members of participating companies said reputation is important. Because the impact of reputation can be seen clearly on a company’s financial return and business model, it is absolutely on the radar of a company’s board. In fact, 9 out of 10 executives say reputation is important to their own respective boards.
- Reputation provides tangible benefits. Companies with strong and credible reputations do see many benefits, including some that might not be expected. These include the attraction of high-quality talent, customer or client loyalty, higher stock prices and new market opportunities.
- Reputation has a sizable impact on market value. Reputation’s market value does fluctuate based on market and industry. However, global executives do attribute 63% of their company’s market value to reputation. Executives in Mexico and Brazil said reputation makes the greatest contribution to value.
These findings are increasingly important when considering the interconnectedness of markets across the globe. People in many different generations and target audiences not only acknowledge reputation, but also hold it in high regard when considering what company to give their business to. This is essential in public relations due to the power of communications and reputation management within this realm.
Findings like these show the power a company’s reputation has, both financially and in the communications realm. As we see a shift among markets and industries in regard to reputation, the need for effective and strategic communications across many unique fronts will emerge. Because of this, it is incredibly important for public relations professionals to evolve with the consistently changing business environment that is now a part of our everyday lives.
Tricia McCleary is a member of the IPR Street Team. She is currently a senior at the University of Florida majoring in public relations, with a minor in Public Leadership.