Deliver great service: that’s what Amazon founder Jeff Bezos told Businessweek in 2004 would be the key to his company’s success. “You earn reputation by trying to do hard things well,” he said. “People notice that over time.”
And Bezos’s strategy paid off; Amazon earned the highest overall ranking on the 2014 Harris Poll Reputation Quotient (RQ) study, which surveys 18,000 Americans to measure the reputations of the 60 most visible companies in the country.
“A company’s reputation is created through committed behaviors,” says Robert Fronk, senior vice president of Nielsen Reputation Management and Public Affairs. “It’s not something you do once," he explains.
Six in ten consumers decide not to do business with a company based on something they learned about its conduct, the study found. The companies that rank highest—including Amazon, Coca-Cola, and Whole Foods—offer transparency, honest communication, and a proactive and focused approach. Fronk says reputation is formed by six dimensions that influence consumer behavior:
The feeling a company elicits is considered its emotional appeal, and topping the poll in this category is Amazon.
“Amazon has nearly 100% of respondents giving it the highest possible rating,” says Fronk. “They are perceived as a company willing to engage emotionally with consumers. They’re trusted and admired, and their leadership is respected.”
Fronk says companies that earn a high rating for emotional appeal stand behind products and services, and do the right thing when faced with a customer complaint or crisis. They don’t always think of profit first, and they resolve challenges that ultimately benefit stakeholders in the long run.
While most consumers probably don’t know a company’s quarterly earnings off the top of their heads, Fronk says they gather information about its financial performance through observations. How well does it perform against its competition? Does it demonstrate prospects for growth? Did it have a record of profitability? And is it a low-risk investment? Coca-Cola ranked highest in the RQ in this category.
“Coke takes several actions that give it the perception of strong financial performance,” says Fronk. “It invests money in its communities and has strong product development—things that lead people to believe they’re maintaining strong profitability.”
Fronk says Coca-Cola relays this information to the public through good storytelling: “They’ve moved away from the traditional corporate communications model and now operate like media company, sharing news about Coca-Cola as well as contextual news on categories related to Coke’s business,” he says.
A company’s products and services contribute to its reputation. High scores are earned when a company stands behind what it sells, offers high quality, gives good value and is innovative. Amazon received the top scores in this category by offering a comprehensive product mix at the best prices.
“I like to say that companies that score high in this category delight customers,” says Fronk. “Innovation doesn’t have to be whiz bang. It can also be from something like reliability.”
Companies that demonstrate community responsibility, support causes and are environmentally responsible score high in the social responsibility dimension. Whole Foods Market has been at the top of the list for a long time, says Fronk. The company regularly launches environmental initiatives, such as joining the Marine Stewardship Council to promote sustainable fishing practices, eliminating plastic bags, offsetting energy costs through renewable efforts such as wind power credits, and removing toxins from its shelves, such as BPA-containing products.
More companies are putting a greater focus on social responsibility and how it relates to their purpose, says Fronk: “The 18-39 age group has higher expectations,” he says. “It’s not just giving money; social responsibility needs to be in the DNA of your business. Actions speak more than words or money.”
Having a clear vision for the future, recognizing and taking advantage of market opportunities, and demonstrating strong leadership are the attributes that affect this dimension.
“The culture of leadership is a qualitative dimension,” says Fronk. “Leadership isn’t just C-suite; its perception comes from anyone in a company that is empowered to make the right decision on the spot. It’s a company that does the right thing even if it harms bottom line.”
Coca-Cola scored high on this dimension due to its product innovation and vision, says Fronk. Amazon also had high scores. “Jeff Bezos makes it clear that he’s not managing the business to meet investors’ quarter-by-quarter expectations,” says Fronk. “There’s a broader mission.”
Finally, a company’s reputation is impacted by its perceived workplace environment, which is often driven by word of mouth and is based on employee attitudes and treatment, and if a company looks like a great place to work.
Amazon scored highest in this dimension; its new campus has energy-efficient buildings, food vendors who offer sustainable and local ingredients, and a bring-your-dog-to-work policy.
“Much has been written about how employees are brand ambassadors,” says Fronk. “Satisfied employees provide great customer service, which drives trust in a company.”
[Image: Flickr user Omer Wazir]