The businesses with the strongest reputations are not the most virtuous.
If we compare the 10 companies that are best known for their ethics worldwide against the 10 that have invested the most in education—a tangible proof of civic commitment—Microsoft is the only company that appears on both lists.
Are consumers just being fooled by grand-but-empty rhetoric, or do they merely react to the guise of a company’s reputation without any suspicion?
On the one hand, a brand’s reputation is critical to a company’s growth. The temptation to embellish a corporate image without taking any definite action is strong. On the other, wielding a reputation is a complex art that needs to be handled with care.
Over the course of this article, we will observe how consumers react to ethical discourse and lay out different levers that can be used to improve your reputation in the long term.
The Gap Between Rhetoric and Action
When it comes to business, marketing and concrete action are two sides of the same coin. Certain brands excel in the former. They pour their resources into marketing, but their reach is small and their niche; narrow. On the other end of the spectrum, companies skate by on trends, talking big about their social involvement without following through.
Watch out, though. Consumers react strongly to communication and are particularly vigilant when it comes to slogans lining up with actions. They are especially severe towards greenwashing, as we saw during the 2016 Volkswagen scandal; consumers do not hesitate to react to a business’s faux pas with vengeance. Bad publicity may have horrible consequences on the image, but it also demonstrates the emotional reactivity of the consumer more than it sheds light on the business that actually committed the transgression. In these cases, these blunders are a marketing issue, though consumers mistake them for the global company’s involvement in collective issues.
CSR Reputation Levers
The positive perception of a brand’s CSR (Corporate Social Responsibility) heightens its chances at attracting loyalty and trust from consumers. According to studies conducted by Reputation Institute, we can measure a company’s CSR reputation with the help of three indicators:
1 — The company’s culture in the workplace
This impacts recruitment and allows companies to focus on growing internally. Consumers are particularly attentive to the inner workings of a company, and it affects their decisions as buyers. Take the Swedish clothing brand H&M, for example: the retail giant saw its biggest drop in profits this year after numerous scandals. Maplecroft issued a report analyzing the impact human rights have on a company’s public perception and identified that unethical employment conditions are the biggest threat to a brand’s reputation.
How about you? How does your potential clientele perceive your workplace culture?
2 — Governance
When a company is well managed and has a positive relationship with its various stakeholders (investors, suppliers, partners, renown clients, etc.) consumers are motivated to trust the company in turn.
3 — Citizenship
The more a company creates social value by getting involved in civic engagement (such as charities, volunteer efforts, philanthropic campaigns, etc.), the greater its reputation will grow.
How about you? How does your potential clientele perceive your civic impact?
Many businesses consider responsible public involvement as an unnecessary expense. Often, the upfront costs are the primary reason why companies decide not to take action. Yet, positive rhetoric aligned with virtuous action ultimately heightens a company’s reputation.
The perception of a good CSR invokes positive emotion, which fosters positive decision-making and behaviours amongst consumers.
Today, whether the civic involvement is social, environmental, or humane—it is a commercial gold mine on every level. Discover the reasons why!