FAQ: Why Reputation Management Matters for Chief Marketing Officers
We recently conducted a study in partnership with CMO Club, a leading network of Chief Marketing Officers and leaders from the world's top companies. The study highlighted the increasing need for a reputation management system, especially in the office of the CMO. Reputation isn't often the first thing that comes to mind when thinking about marketing, but our study concludes that reputation management is increasingly crucial for CMOs. This FAQ explains why.
What is a CMO?
Also known as a Chief Marketing Officer, the CMO is a corporate level executive who is responsible for strategically creating marketing content and communicating about it in a way that promotes brand recognition. The CMO's ultimate goal is to achieve competitive advantage in the market for their organization. All major businesses have a CMO, or someone similar, who plays an integral role in the company's growth strategy.
Why must CMOs focus on reputation management?
The days of marketing campaigns simply based on price, product, and service are over. This approach is now seen as one-dimensional. Stakeholders (investors, customers, employees) want to know about all parts of the enterprise—corporate responsibility, leadership practices, and company values, to name a few.
These drivers of reputation are important to communicate because stakeholders act based on a brand's perceived reputation. When CMOs were asked how a strong corporate reputation had a business impact, they pointed to top talent acquisition and retention, achieving a competitive advantage in their market, and effective crisis management and post-crisis recovery.
"If your reputation is good, you will capture more share of wallet and share of market; if not, then the reverse is true."—Phillip Wang, SVP, Brand Integrated Marketing at Wells Fargo
What are some key components of reputation management for CMOs to consider first?
In order to understand whether you, as a CMO, or as a company are managing your reputation effectively, you must look to these pillars: a systematic evaluation of reputation, corporate reputation strategy, integrated company purpose, and leadership alignment.
To measure reputation, a company must adopt a way of evaluating reputation with specific metrics and KPIs to reflect how it is performing across different drivers of reputation. Ri's RepTrak methodology is able to provide businesses with a reputation score as well as an extensive, all-encompassing framework to accurately measure and track reputation performance.
What are some typical reputation challenges that CMOs face?
More than half of CMOs surveyed said they were not fully ready to manage reputation. This is due to a lack of a structured process for implementing reputation management into business planning, internal challenges with cross-functional or cross-team collaboration, lack of buy-in from the CEO or other C-level executives, and lack of understanding of the business case for reputation management.
What are CMOs currently doing to address reputation challenges?
In their own words:
"Wells Fargo's CMO is part of a "stakeholder relations group" that brings together several perspectives from different business functions to provide insight and direction through the lens of reputation."—Phillip Wang, SVP, Brand Integrated Marketing at Wells Fargo
"DuPont is engaging in the reputation conversation by connecting business returns directly to brand reputation."—Jeanine Hurry, Global Digital Programs Leader at DuPont
"At HP, reputation is not a single person's responsibility. Various business functions are involved and reputation and corporate brand are ingrained in the company's values."—Karen Kahn, Chief Communications Officer at HP
Which key reputation macro-trends should CMOs be aware of?
There will always be forces beyond any single company, whether it be industry-wide or globally, that impact corporate reputation. The top 5 macro-trends marketers should be aware of are:
- The need for corporations to serve a higher purpose
- A rise in CEO activism
- The growing popularity of market influencers
- Cyber attacks and major data privacy issues
- The fake news epidemic
Find out more about reputation macro-trends and how they impact your company from our 2019 macro-trends report.
How can CMOs start effectively measuring and managing reputation?
Begin by exploring strategies you can use to ramp up your team's reputation management program. You must have clearly defined KPIs to illustrate the business impact. Ask questions like:
- What is our brand promise?
- Does our company deliver on that promise?
- What are the systematic steps we can take to convince our stakeholders to believe in our brand?
This will help influence your plan.
A corporate reputation strategy cannot be executed by one team in the business. It requires buy-in and collaboration from all business functions. A robust corporate reputation brings different benefits to different teams, so it's important to have a variety of functions invested in reputation management. For marketing, a strong reputation can bring an increase in sales. For HR, it can bring in top tier talent. For the CEO, it can bring in more business opportunities and improve approval ratings.
Lastly, you can't manage what you don't measure. Reputation management requires a strategy to know where your company stands and where it wants to go. You need a tool, like RepTrak, to accurately gauge what your stakeholders think about your company and what they want moving forward. Ultimately, using reputation measurement as a key marketing strategy will align your company's brand to what your stakeholders want. This will increase support for your company and positively impact your bottom line.