Making corporate reputation work
Those who have been successful in the local market also realise that they need to adapt to changing market conditions in managing reputation. "The way companies globally are doing this is changing.
The head of communications (in which corporate reputation falls) was never a C-suite function. That person usually reported to the head of marketing and never sat in on boardroom decisions. Now there is a chief communications officer that manages and controls reputation from a top-level perspective," says Guy Kilfoil, general manager of group communications and public affairs at BMW South Africa. "While this has not permeated throughout South African organisations, it is starting to happen."
Brand growth through good corporate reputation
Such is the seriousness with which Vodacom views its corporate reputation that it conducts an annual reputation survey to get a good understanding of what its shareholders think of the company.
"It is important to get honest feedback about our impact on society, what our employees think of us and how our involvement in the community is perceived. We can strengthen what we are doing well and improve that which we are not," says Maya Makanjee, chief officer for corporate affairs at Vodacom.
Another organisation that equates success to reputation is MultiChoice. The entertainment operator believes that its success depends on a good corporate reputation.
"We focus on building this reputation through understanding the expectations of our various stakeholders and responding appropriately to their needs. It is about building long-term partnerships with all our stakeholders, especially our customers," says Collins Khumalo, chief executive of MultiChoice South Africa.
Being pro-active makes the difference
One element of this understanding is being pro-active. If companies only ever react to issues that impact reputation, their stakeholders will start losing trust in the brand.
BMW South Africa knows how important this trust is. At times, automotive manufacturers are plagued by vehicle recalls. Yet despite this, BMW still has a good reputation while other manufacturers might suffer. Kilfoil says that a lot depends on how manufacturers handle the recall that dictates their reputation.
"From a BMW perspective, we approach it from the other side of the customer care coin. Instead of keeping quiet and fixing the problem, we try to be preventative and address the issue immediately. We have learnt lessons the hard way and apply those to our approach to corporate reputation management," he says.
It all comes down to integrity and doing the right thing even when nobody is watching you. The integrity of the brand is ultimately built into the fabric of the business, says Kilfoil.
Ensuring the success of the triple bottom-line is critical for any organisation. Vodacom's Makanjee says it becomes essential to look at how an organisation is performing in the communities in which it operates, society in general and the environment.
"We implement in all these areas. For example, we have one of the largest solar arrays in Africa that provides significant energy savings. "One of the questions we ask ourselves is how we can use technology to make a difference in our products and services. From a customer perspective, we also routinely measure customer satisfaction," she says.
Khumalo agrees that keeping a finger on the pulse of the market through research, monitoring and analysis is important.
MultiChoice does this by monitoring and tracking coverage in all forms of media, including social media and conducting customer research and including a number of customers and other key stakeholders in on-going field trials for products and services.
Khumalo says: "Of course, our employees are key to our success. Therefore, annual engagement surveys and internal communication audits ensure we stay in touch with what our employees are thinking. All of these assist us in enriching our engagement with stakeholders and in managing our corporate reputation."
Reputational impact does matter
A good corporate reputation will result in positive perceptions about a company's brand and will drive loyalty of customers, says Khumalo.
"We strongly believe that our reputation is inextricably linked to our brand, which impacts on the awareness of and trust in our brand. Most importantly, it impacts on customer loyalty. We are very proud of our 25-year history as a truly South African company that delivers quality entertainment to our customers.
"Many of our customers have been with us since we first started. We hope that through our ongoing drive to add value to our customers, we are creating many more loyal customers who will be with us for some time," he says. Robyn Chalmers, head of media and communications at South African Breweries (SAB), agrees.
"Reputation is entirely about perception. And the biggest influence by far on that perception is the personal experience that someone has with the company or its employees. A good reputation is critically important to a business because it helps the company to, among other things, gain access to markets, attract the best staff, engage positively with customers and suppliers, and secure the support of investors."
Remember the basics while you evolve
Although technology is constantly evolving and impacting on how companies do certain things, the sentiment is that the basis of reputation has not changed.
"Doing business ethically and for the benefit of your customers while making a lasting impact to the communities in which you operate forms the basis of reputation. However, the level of our engagement with our stakeholders has increased significantly due to the pervasive availability of information through platforms such as Twitter and Facebook," says Khumalo.
"This means that our reputation can be hugely impacted in a very short space of time. That is why it is even more important to act with integrity and good faith at all times. You are only as good as your last interaction with your customers and other stakeholders."
Social media remains a common thread (or threat) for companies
SAB's Chalmers says: "The biggest impact is in the realm of social media where the reputation of a company can be negatively affected in a few hours. This means that detailed reactive measures such as monitoring and alerts need to be in place.
"But it is far more important that you are proactive in this space and try and build a base of supporters who know and understand your business. Such a community is your strongest advocate and your biggest defence against potential reputation risks."
In fact, understanding how social media impacts reputation is becoming an increasingly important aspect of media measurement and analysis.
"Knowing how to respond in a timely fashion in the correct medium is something that can make or break a brand, especially when looking of the immediacy of digital and broadcast media," says Jaco Pienaar, chief knowledge officer of media analysis and research company PEAR.
"Service delivery and crisis management issues become increasingly prevalent in management of reputational risk."
He cites the example of a recent incident in the automotive industry in which a celebrity received shoddy service from a leading brand's dealership. He then started a negative brand hashtag on Twitter which started picking up with his followers.
"The brand did not respond quickly enough, which clearly showed a gap in understanding the medium and potential damage. There was a similar case with a major gym brand with regards to a racism incident.
"When the response came, the issue had already gone viral. It becomes a difficult balancing act and understanding of the digital medium's impact and scope with regards to reputational analysis," says Pienaar.
Focusing on reputation growth
Beyond social media, companies are looking at real ways to make a difference to their clients.
"Ensuring that we have a competitive proposition for our customers in terms of products and services and investing in a reliable and quality network are some of these elements.
"We also make sure that the customer experience across all touch points in retail, point-of-sale, call centres and service are interlinked. We are always learning and understanding what customers want and where their challenges are and how we can address it from our side," says Makanjee. The customer experience is an especially important one.
"Our focus is to change the way that people experience television. It is about providing world-class entertainment to be accessible to a wide range of customers wherever they are. Since the beginning of pay television in South Africa, we have been offering pioneering and innovative services to our customers," says Khumalo. "We are committed to continue this journey to surround our customers with a world of entertainment."
And it is just such a journey that many customers are only too willing to go on when the brand they engage with is one they trust.