It’s a complicated world for corporate America as consumer perceptions grow increasingly negative. With the erosion of trust in corporate leadership, consumers have higher expectations and are demanding more information and transparency from companies with which they plan to spend their hard-earned dollars.
Through its 13 years, the Harris Poll Reputation Quotient (RQ) study has shown that the reputations of traditional manufacturers have fared well, though their overall visibility as an industry has declined; it also has indicated a rising affinity for technology companies.
Customer inclination towards strong leadership and technological innovation may be the catalyst, and it is within this environment that Apple reigns supreme.
This year regional brick-and-mortar retailers are more prominent, and many once-leading American companies are noticeably absent from the 2012 Harris Poll RQ study, which asks the general public to measure the reputations of the 60 most visible companies in the country.
Apple displaces Google
This year’s most reputable brand, Apple, benefits greatly from its hybrid status as a technology/consumer product/retail company, and earns the highest RQ score to secure the top spot in the ranking. We wonder if Apple will retain this exalted position following revelations that the labor conditions in China where it makes its iPad and other devices are abysmal.
It displaces Google — last year’s most reputable corporation, which now ranks second with an excellent score of 82.82. The Coca-Cola Company, ranked 15th in 2011, has surged into third place, despite any meaningful change in its reputation rating.
Amazon.com moves up from eighth to fourth place and perennial reputation elite, Kraft Foods, ranked fifth. We think Amazon, with its exemplary customer service and innovative approach to selling via its own devices, such as the Kindle and Kindle Fire, could do even better if it would forego such alienating moves as offering people money to check out products in a retail store but buy them on Amazon.
Companies associated with multiple industries emerging
“We are seeing the emergence of a group of companies that garner reputation equity by being positively associated with multiple industries,” said Robert Fronk, executive vice president and Global Corporate Reputation Practice Lead for Harris Interactive.
“Companies like Apple, Google, and Amazon.com combine innovation and leadership across multiple business areas, giving them true competitive advantage.”
In terms of year-over-year change, only Toyota, General Motors, BP, and Apple enjoy significant improvement in their RQ scores while one quarter of companies saw drastic declines. Among those with the most significant declines, five were financial institutions, including the 2010 top scorer, Berkshire Hathaway.
RQ measures six dimensions that comprise reputation and influence consumer behavior. Apple has the greatest score overall. In fact, despite today’s challenging environment, Apple records the highest score in the RQ’s history, and is top-ranked in four of the six key dimensions of reputation:
- Social Responsibility – Whole Foods
- Emotional Appeal – Amazon.com
- Financial Performance – Apple
- Products & Services – Apple
- Vision & Leadership – Apple
- Workplace Environment – Apple
Interestingly, Amazon.com, which has no storefront and very limited human interaction, scores highest in the Emotional Appeal dimension – this is the core strength of its reputation. In terms of supportive behavior, customers report considerable confidence in Amazon.com and several other companies:
- In the future, Americans would “definitely” purchase products & services from Amazon.com (71%), Kraft Foods (70%), and the Coca-Cola Company (64%).
- Americans would “definitely” recommend to others products & services from Amazon.com (64%) and Kraft Foods (57%).
- In the future Americans would “definitely” invest in stock from Amazon.com (34%), Microsoft (23%), and the Coca-Cola Company (23%).
- Americans would “definitely” recommend to others to invest in stock from Amazon.com (46%), the Coca-Cola Company (25%), and Microsoft (24%)
Scores of 80 and Higher are Rare This Year
An RQ score of 80 or above signifies a company with an “excellent reputation.” Since first measured in 2000, Apple has shown steady improvement, earning an elite score of 85.62 this year, the highest RQ score ever achieved by any company in the 13 years of the RQ study.
Reflecting the negative mood of consumers, this year only eight companies earn such scores. This is a 50% decrease from 2011, when 16 companies earned this privileged status.
“It’s quite striking to see such a drop in the number of companies scoring 80 or above,” said Fronk. “Corporations are facing significant headwinds as they try to win and preserve consumer trust.”
Reputation Rehabilitation Happens
Two automotive companies, each managing through unique reputation rehabilitation processes for different reasons, saw the greatest increases in their RQ scores this year.
General Motors’ reputation has been steadily moving upward for four consecutive years. Over the course of that time, the RQ study has seen its reputation rise 13 points and its ranking move up 14 places. This year General Motors improves in all six RQ dimensions, and advances in the rankings due to dramatically higher perceptions in the Emotional Appeal and Vision & Leadership dimensions.
After a series of quality and safety issues resulted in a ten-point drop last year, Toyota rebounds five points, driven by gains in Product & Service, Vision & Leadership, and Emotional Appeal dimensions.
In the pharmaceutical space, Johnson & Johnson, plagued by recall and quality issues, manages to maintain a score over 80, though it fell from second highest ranked company in 2011 to seventh in 2012. For the first time in RQ history, Johnson & Johnson did not rank in first or second place.
Reputation Retrospective – Retail and Manufacturing Swap Places
Meanwhile, the sudden appearance of brick-and mortar retailers like Best Buy, Costco, JCPenney, Kohl’s, Walgreens, and Macy’s on the most visible companies roster contrasts sharply with the absence of iconic U.S.-based manufacturers, like IBM and Intel Corporation.
A look back at the RQ most visible list from ten years ago also shows the dramatic change in the American corporate landscape. At that time, nine industrial manufacturers (excluding automotive) and six retailers made the list. This year’s list contains two companies in the industrial manufacturing space and is dominated by 14 retail brands, nearly one-quarter of the total list.
In charting the ten-year trajectory of individual companies, Apple and Hewlett Packard emerge as starkly different examples of how reputation management and behavior can impact perception.
Apple’s current dominance is built on strong investments in its brand, predominantly through its products and services. This one-dimensional approach to building reputation has ultimately yielded high associations with all six reputational dimensions and ranks it first in Financial Performance, Products & Services, Vision & Leadership, and Workplace Environment.
Conversely, Hewlett Packard, which once out-ranked Apple, has headed in the reverse direction. Hewlett Packard’s slowly eroding reputation has been injured by negative perceptions on Ethics and Vision & Leadership dimensions, and its brand is beginning to feel the damage.
Moreover, a dozen companies visible in 2011 did not appear this year at all, including 3M, Intel Corporation, SC Johnson, Unilever, Facebook, Pfizer, State Farm Insurance, The Allstate Corporation, Shell, Monsato, American Airlines, and Delta Airlines.
At Risk Companies Skew to the Financial Industry
Over the lifespan of the RQ study, twelve companies have received scores below 50, and the vast majority of these, like Enron, MCI (formerly WorldCom), Adelphia, and Global Crossing, are now defunct. The 2012 RQ survey shows the reputations of Bank of America, Goldman Sachs and AIG in an equally challenging place.
The general public believes that Bank of America has been more concerned with operational and financial recovery than with customers and rates the bank low in levels of trust, ethics, and customer service. In order to rebuild their reputation, Bank of America will need to engage beyond this functional rebound.
Editorial “we” comments by Allan Maurer, TechJournal Editor. Allan at TechJournalsouth dot com.