The Mail & Guardian‘s inaugural Top Companies Reputation Index (TCRI) from Plus 94 Research, published today, will come as good news for some companies and bad news for others — especially the more competitive among them.
Coca-Cola, for example, could be forgiven for a smidgen of pride in its first place as the most reputable company among both consumers and businesses, as well as the high scores it achieved from both those groups.
The SABC, on the other hand, may be less than pleased to know just how little people in business think of it, and the national government has some work to do among consumers. Certain banks and cellphone companies, meanwhile, will be wondering just what they need to do to fare better than their peers when trying to polish their reputations in future.
But the TCRI provides more than a simple ranking of companies by reputation. The detailed report presents a great deal of insight into just how South Africans view the 30 organisations that spend the most money on advertising in the local market; how various demographic groups differ in their opinions on the same company; and even some insight into the nature of the relationship between reputation and the bottom line. What it cannot provide is a true reflection of the actual integrity or ethical behaviour of a company.
As Plus 94 Research points out, reputation is based on perceptions, and perceptions are not formed on the basis of perfect knowledge. How exactly perceptions — and ultimately reputations — are, in fact, formed, remains a question of more than just passing interest to marketers and advertisers around the world. Understanding that would be very profitable, and the ability to fix what companies sometimes see as unfair or inappropriate marketplace views would make them very happy indeed.
The process is complex, how- ever, and even somewhat chaotic, influenced by things as diverse as the colour of a logo or a single particularly bad customer experience, and subject to quirks and fluctuations of all kinds. Yet, for all its vagaries, reputation is important; some argue the most important thing for any organisation, certainly for top advertising spenders, the companies most eager to reach consumers and entice them into parting with their money.
The TCRI consists of two parts: a measurement of the reputation of a selected group of companies among consumers; and a measurement of the reputation of those same companies among businesses, via their representatives. Each of the 29 companies plus the national government (included due to its advertising spending, although perceptions around it are driven by different factors to those that create perceptions of corporations) are given a score out of 100.
For all the complexity of reaching that final score, it is simple to interpret: 90 points and above is outstanding, anything above 80 is very good, 70 and up isn’t too bad, and the moment you drop below 50 there is real cause for concern. On that basis, South African consumers think pretty highly of local companies.
Even the national government, which placed dead last of the 30 targeted organisations, scored 73.84 points from consumers, and 19 out of the 30 organisations achieved scores above 80. Those representing businesses were far less kind, both generally and in specific cases. Two-thirds of companies scored less than 70 among business respondents, and the last-placed SABC came in well below 50 points.
Other differences between the two groups abound. While both rated Coca-Cola tops, only three other companies feature in the same position among both consumers and business. The general public placed the SABC at number 16, while businesses placed it at number 30, with not much less than half the final score.
Consumers considered Vodacom the second most reputable company, while businesses placed it eighth. Drill down to the specifics, by looking at reputation in certain categories rather than generally, and it gets even more interesting.
Consumers rate either Coca-Cola or Vodacom tops in everything from financial perfor- mance to their products, with only the local arm of SABMiller breaking the trend and getting the nod for its black economic empowerment. Business people also think Coca-Cola is pretty hot in most regards, but think Absa has the best workplace environment and corporate responsibility projects, and that the government (pretty universally dismissed in every other category) is doing the best job when it comes to empowerment.
Why such big differences between the groups, considering that business representatives are also ordinary consumers? It could simply be because the business respondents had dealt with different divisions of the companies in question, or that they were less influenced by advertising and more by, say, coverage of the financial woes of the SABC, for which they had little time virtually across the board.
Either way, Plus 94 Research points out that companies who want to put a shine on their reputations will have to consider different ways of reaching out to the business people they’d like to influence, and not bundle them in with consumers, inspite of the fact that they can be both. Results are based on specific questions about specific companies, though, with real thought behind the responses.
What would happen if you just walked up to somebody on the street, and popped the question: which companies do you think have good or bad reputations, no matter how big or small their advertising spend?
If the TCRI is a good measure, by way of a free association section of the survey done with each respondent, you are most likely to have Pick n Pay cited as a good egg, by a considerable margin, followed by MTN and Vodacom tied in second place, then Coca-Cola.
On the negative side, Shoprite Holdings will come up much more often than any other company, with Cell C a distant second and Edcon, Pep Stores and Eskom following in quick succession. You may also start a fight if you ask a couple of people at the same time.
According to the TCRI, for every per- son with a negative view on Shoprite Holdings you’ll also (on average) have slightly more than one person with a positive view on it; for Cell C the numbers should be just about even. While agreement starts to emerge when you get specific, that out-of- the-blue approach could make for a rather confusing result.