7 Ways to Quantify Reputation
Q: How does Reputation Institute quantify an intangible concept like corporate reputation?
A: Accurately. With a core team of incredibly smart data scientists and PhDs (read the white paper), a time and pressure-tested methodology, machine learning and artificial intelligence, but also, with a healthy dose of common sense.
At Reputation Institute, we define reputation as the emotional connection that stakeholders (consumers, investors, employees) have with a given company.
The top-level formula is simple: if stakeholders have a strong emotional connection with a company, they will buy from, invest in, and want to work for that company – all good things for business.
This is how an intangible concept like reputation directly drives business results.
A Guide to Quantifying Reputation
To further quantify and categorize where this stakeholder support is coming from, we analyze the why behind reputation – motivations and perceptions that lead to stakeholder actions. We break down these cognitive considerations into the 7 dimensions of reputation.
By monitoring and measuring these dimensions of reputation, we can:
• understand what areas of your business work great
• be aware of what areas present reputational risk
• predict actions your stakeholders will take
• know what will push the needle to drive enhanced business success
If reputation is defined as an emotional connection, the 7 dimensions of reputation are the rational (or cognitive) considerations that spark an emotional response that leads to action: Think. Feel. Do.
Figure 1: RepTrak® model highlighting the 7 dimensions of reputation
7 Dimensions of Reputation
The following represent the 7 dimensions of reputation. When measured, these quantify reputation in a way that identifies company strengths, weaknesses, and immediate opportunities.
1. Products and Services
Quality products and services can profoundly shape a company’s reputation. This is a highly-visible area with which stakeholders arguably interact the most. If a company’s products and services fail to meet stakeholder expectations, reputation will be low, as will revenue.
Where is your company heading? How does it evolve? Forward-thinking and creatively inspired companies are more highly regarded.
Workplace culture has never been a more integral part of hiring and retaining talent. With unemployment at an 18-year low of 3.8% attracting the best people for the job is tough. Compensation packages, benefits, work/life balance, on-boarding and continued training are must-haves.
Governance measures your company’s ethical behavior, transparency, and fairness. Companies must be strong in this area if they want to consistently earn a license-to-operate by stakeholders, particularly regulators and policy-makers.
A company that scores high in Citizenship take a stand in aiming make the world a better place, most frequently through environmental and social efforts.
Leadership primarily points to the effectiveness of how a company is managed. Is its vision and mission clear? Is there accountability for when things don’t go quite right? Companies with CEOs who align with the company’s purpose outperform those who are less visible.
Although, perhaps surprisingly less important than some of the other dimensions of late (see Figure 2), numbers matter and performance and profitability are undoubtedly key indicators of reputation success.
When RI partners with clients, we use RepTrak® to identify which dimension is the most important to any given market, industry, or company in driving reputation and ultimately business results.
We study each dimension and its unique contribution to a company’s reputation.
While it is important to deliver on all 7 dimensions, this analysis provides companies with a clear strategy of key areas of focus to improve on their corporate reputation.
Here’s a snapshot showing dimensions of reputation weights globally in 2018. It is an interesting trend to note that Products/Services, Governance, and Citizenship are more valuable to stakeholders than Performance. This doesn’t mean that Performance is not important (see Figures 3 and 4), but this is a good way to benchmark your company’s reputation scores globally.
Figure 2: Global Dimension Weights – Products/Services, Governance & Citizenship as Key Drivers for 2018, Accountable for over 50% of Corporate Reputation
To take an even closer look, here are recent reputation dimension scores from two consistently highly reputable companies, Rolex and Google.
Rolex, the #1 most reputable company in the world in 2018 with high scores in Leadership, Performance, and Products/Services pushing the company’s total score to strong.
Figure 3: Global Dimension Scores for Rolex
Google, 2018’s 3rd most reputable company worldwide, (and led by Sundar Pichai, the world’s most reputable CEO) has excellent scores in Performance and Innovation.
Figure 4: Global Dimension Scores for Google
Know how your company stacks up on the 7 dimensions of reputation? Where are you strong and where are you weak? We have the data – let’s chat.