Succeeding in the Reputation Economy · The RepTrak® model explains Reputation 2 The RepTrak®...

Succeeding in the Reputation Economy

Spencer Fox and Dr Dominik Heil

The RepTrak® model explains Reputation

2

The RepTrak® Model Reputation Institute’s generic model for reputation is structured around four core themes and seven reputation dimensions. Together, these elements explain a company’s reputation. 1 - Reputation RepTrak® Pulse is the core of a company’s reputation and shows how strong the emotional bond is between the company and the public. 2 - Dimensions There are seven reputation dimensions. The individual dimensions mean different things to people and are perceived differently in terms of weighted importance. Analyses identify areas that are most important for strengthening a company’s reputation. Drivers show how the company gains value for money in its communication.

1

2

RepTrak® - Rational vs. Emotional

3

What is the relationship between RepTrak® Pulse and the 7

reputation dimensions?

RepTrak® Pulse measures the overall reputation based on

people's immediate emotional perception of the company. In

contrast, the 7 reputation dimensions examine people’s rational

perception of corporate reputation based on specific and detailed

statements.

RepTrak® Pulse score is not necessarily always equal to the

average of the 7 reputation dimensions. People’s emotional

perception may be influenced by an overall positive attitude to

the company, which is not necessarily rewarded by a proper

evaluation of the respective company's products, innovation,

workplace, governance, citizenship, leadership or performance.

Emotional

Rational

explanation of the emotional

Why should we care about reputation?

4

Direct experience

What a company communicates

What others say

Touch Points Reputation Behavior Business Results

Reputation Risk

A promise about to implode...

... A promise waiting to be

told...

A promise fulfilled

negative positive

po

siti

ve

neg

ativ

e

Internal Reality

Exte

rnal

Pe

rce

pti

on

Change is required to alter ’reality’ and minimize reputational risk

Communication is required to capitalize on good reality and overcome poor perceptions

5

Reputational Risk Assessment

Risk Manager

Risk

Description

Reputation Research

Stakeholder Reputation

Drivers

(RepTrak™ Attribute driver weights)

3rd Party Influence

(Probability of negative coverage

on each RepTrak™ Attribute)

Risk Evaluation

3rd Party (Media) Risk

Per

cept

ion

Ris

k

Likelihood

Impo

rtan

ce

to S

take

hold

er

Stakeholder Group: General Public

Industry Reputations 2014

Avera

ge/

Modera

te

Str

ong/

Robust

Consumer Products

Retail - General

Beverage

Conglomerate

Retail - Food

Food - Manufacturing

Electrical & Electronics

Industrial Products

Pharmaceuticals

Automotive

Airlines & Aerospace

Transport & Logistics

Information & Media

Services

Financial - Diversified

Construction & Engineering

Energy

Financial - Insurance

Chemicals

Telecommunications

Raw Materials

Financial - Bankn= 46.111

Poor/

Bottom

Tie

r

Weak/

Vuln

era

ble

Excelle

nt/

Top T

ier

72,8

72,1

71,5

71,0

70,6

70,3

70,0

70,0

69,8

69,4

69,4

69,1

69,0

68,8

68,1

68,0

67,8

67,4

67,2

67,2

66,5

63,0

0 20 40 60 80 100

RepTrak® Pulse - Industry ranking 2014



2012 2013 2014 2012 2013 2014

1 Consumer Products 76,1 74,6 72,8 13 Information & Media 68,0 70,0 69,0

2 Retail - General 70,3 71,1 72,1 14 Services 65,0 68,5 68,8

3 Beverage 71,6 69,4 71,5 15 Financial - Diversified 69,2 70,4 68,1

4 Conglomerate 70,7 68,6 71,0 16 Construction & Engineering 65,5 68,0 68,0

5 Retail - Food 70,4 68,3 70,6 17 Energy 64,5 69,4 67,8

6 Food - Manufacturing 71,6 69,7 70,3 18 Financial - Insurance 65,9 67,8 67,4

7 Electrical & Electronics 70,1 75,5 70,0 19 Chemicals 70,1 67,2

8 Industrial Products 68,2 71,9 70,0 20 Telecommunications 62,8 68,5 67,2

9 Pharmaceuticals 69,2 70,8 69,8 21 Raw Materials 66,3 69,1 66,5

10 Automotive 69,5 67,9 69,4 22 Financial - Bank 60,1 61,2 63,0

11 Airlines & Aerospace 67,1 69,4 69,4

12 Transport & Logistics 63,9 67,6 69,1

n= 127.564

Rank CompanyGlobal Mean

2014

Rank Company RepTrak® Pulse RepTrak® Pulse

64,2

RepTrak® Pulse - Industry development 2012 - 2014



RepTrak® Pulse - Industry development 2012 - 2014

9

2012 2013 2014 2012 2013 2014

1 Consumer Products 76,1 74,6 72,8 13 Information & Media 68,0 70,0 69,0

2 Retail - General 70,3 71,1 72,1 14 Services 65,0 68,5 68,8

3 Beverage 71,6 69,4 71,5 15 Financial - Diversified 69,2 70,4 68,1

4 Conglomerate 70,7 68,6 71,0 16 Construction & Engineering 65,5 68,0 68,0

5 Retail - Food 70,4 68,3 70,6 17 Energy 64,5 69,4 67,8

6 Food - Manufacturing 71,6 69,7 70,3 18 Financial - Insurance 65,9 67,8 67,4

7 Electrical & Electronics 70,1 75,5 70,0 19 Chemicals 70,1 67,2

8 Industrial Products 68,2 71,9 70,0 20 Telecommunications 62,8 68,5 67,2

9 Pharmaceuticals 69,2 70,8 69,8 21 Raw Materials 66,3 69,1 66,5

10 Automotive 69,5 67,9 69,4 22 Financial - Bank 60,1 61,2 63,0

11 Transport & Logistics 63,9 67,6 69,1

12 Airlines & Aerospace 67,1 69,4 69,0

Rank Company RepTrak® Pulse RepTrak® Pulse

n= 127.460

Rank Company



2012 2013 20141 Consumer Products

2 Retail - General

3 Beverage

4 Conglomerate

5 Retail - Food

6 Food - Manufacturing

7 Electrical & Electronics

8 Industrial Products

9 Pharmaceuticals

10 Automotive

11 Airlines & Aerospace

12 Transport & Logistics

13 Information & Media

14 Services

15 Financial - Diversified

16 Construction & Engineering

17 Energy

18 Financial - Insurance

19 Chemicals

20 Telecommunications

21 Raw Materials

22 Financial - Bank

Development Rank Industry

RepTrak® Pulse - Industry ranking development 2012 - 2014



2010 2011 2012 2013 2014

n= 7.888

RepTrak® PulseDevelopment (2010 - 2014)

Financial - Bank

58,4

64,160,1 61,2

63,0

50,0

60,0

70,0

80,0

90,0

RepTrak® Pulse Development - Financial - Bank 2014



RepTrak® Pulse Development - Financial - Diversified 2014

12

2010 2011 2012 2013 2014

n= 6.477

RepTrak® PulseDevelopment (2010 - 2014)


64,867,6 69,2 70,4

68,1

50,0

60,0

70,0

80,0

90,0



Adj. R²= 0,710

n= 600

Financial - Bank

2014

13,5%

11,4%

13,8%

19,4%

12,5%

12,0%

17,4%

2

1

3

Financial - Bank reputation drivers 2012 - 2014

2010 2011 2012 2013 2014

Products/Services 16,2% 17,1% 16,8% 15,4% 17,4%

Innovation 12,0% 12,3% 13,4% 10,4% 12,0%

Workplace 13,1% 12,8% 12,8% 13,1% 12,5%

Governance 17,1% 15,3% 16,9% 17,5% 19,4%

Citizenship 14,5% 12,9% 14,8% 15,2% 13,8%

Leadership 14,2% 14,9% 13,0% 14,4% 11,4%

Performance 12,9% 14,7% 12,3% 14,0% 13,5%

n= 600 n= 1.500 n= 1.483 n= 694 n= 600

Adj. R²= 0,776 Adj. R²= 0,712 Adj. R²= 0,774 Adj. R²= 0,751 Adj. R²= 0,710

0%

5%

10%

15%

20%

25%



Financial - Diversified reputation drivers 2012 - 2014

14

Adj. R²= 0,614

n= 2.200


2014

14,3%

13,5%

14,9%

14,3%

14,3%

12,8%

16,1%

1

2

3

2010 2011 2012 2013 2014

Products/Services 18,2% 18,1% 16,1%

Innovation 12,5% 12,5% 12,8%

Workplace 15,9% 13,5% 14,3%

Governance 13,4% 13,6% 14,3%

Citizenship 14,1% 13,8% 14,9%

Leadership 13,0% 15,1% 13,5%

Performance 12,9% 13,5% 14,3%

n= 919 n= 675 n= 2.200

Adj. R²= 0,735 Adj. R²= 0,723 Adj. R²= 0,614

0%

5%

10%

15%

20%

25%



Adj. R²= 0,710

n= 600

Financial - Bank

2014

13,5%

11,4%

13,8%

19,4%

12,5%

12,0%

17,4%

2

1

3

Financial - Bank vs country reputation drivers

Adj. R²= 0,630

UK

2014

n= 35.277

13,1%

13,1%

14,9%

15,4%

14,0%

13,4%

16,1%

1

2

3



Financial - Bank

n= 111

n= 111

66,2

69,6

66,0

62,1

64,3

65,3

63,3

68,5

Sector Reputation overview



Consumer Products Consumer Products

Beverage Pharmaceuticals

Retail - General Electrical & Electronics

Automotive Airlines & Aerospace

Electrical & Electronics Beverage

Food - Manufacturing Telecommunications

Retail - Food Conglomerate

Conglomerate Information & Media

Pharmaceuticals Retail - General

Information & Media Industrial Products

Products Innovation

Financial - Bank at 22 (Score - 64,6) Financial - Bank at 22 (Score - 59,5)

74,9

73,3

72,7

71,9

71,7

71,3

71,3

71,3

71,0

70,5

0 50 100

73,1

70,8

69,4

69,2

69,0

69,0

68,9

68,3

68,2

68,1

0 50 100

Top industries among the ‘product’ dimensions - 2014

Financial Diversified at 16 (score 68.7) Banking at 22 (score 64.6)




Conglomerate Electrical & Electronics Conglomerate

Electrical & Electronics Conglomerate Electrical & Electronics

Consumer Products Pharmaceuticals Industrial Products

Industrial Products Industrial Products Information & Media

Pharmaceuticals Retail - General Food - Manufacturing

Retail - General Consumer Products Consumer Products

Information & Media Retail - Food Pharmaceuticals

Automotive Beverage Retail - General

Beverage Information & Media Retail - Food

Energy Transport & Logistics Telecommunications

Workplace Governance Citizenship

Financial - Bank at 21 (Score - 62,7) Financial - Bank at 22 (Score - 60,6) Financial - Bank at 22 (Score - 60,4)

70,3

68,8

67,9

67,3

67,1

67,1

67,1

67,1

67,1

66,9

0 50 100

69,8

69,2

68,2

68,0

67,5

67,4

67,3

67,1

66,8

66,7

0 50 100

69,1

68,0

66,4

66,1

66,1

66,0

65,9

65,5

65,4

65,3

0 50 100

Top industries among the ‘corporate responsibility’ dimensions - 2014






Consumer Products Consumer Products

Electrical & Electronics Beverage

Pharmaceuticals Pharmaceuticals

Conglomerate Electrical & Electronics

Beverage Airlines & Aerospace

Airlines & Aerospace Conglomerate

Retail - General Retail - General

Transport & Logistics Automotive

Financial - Diversified Raw Materials

Raw Materials Retail - Food

Leadership Performance

Financial - Bank at 22 (Score - 61,5) Financial - Bank at 22 (Score - 63,9)

70,9

70,2

70,1

69,7

69,5

69,1

68,4

68,1

68,0

68,0

0 50 100

73,0

72,3

71,9

70,6

70,5

70,5

70,2

70,2

70,1

70,0

0 50 100

Top industries among the leadership and performance dimensions - 2014




Conglomerate

Electrical & Electronics

Industrial Products

Consumer Products

Pharmaceuticals

Retail - General

Information & Media

Beverage

Retail - Food

Services

CSR Index

Financial - Bank at 22 (Score - 61,2)

69,5

68,9

67,2

67,1

67,1

66,7

66,7

66,4

66,2

66,0

0 50 100

Top industries in CSR - 2014




RepTrak® Pulse - Top reputable companies within Financial – Bank and Financial - Diversified

Avera

ge/

Modera

te

Str

ong/

Robust

Skipton Building Society

Coventry Building Society

Leeds Building Society

Yorkshire Building Society

Standard Chartered plc

Chelsea Building Society

HSBC Holdings plc

Bank of England

Provident Financial

Natwest

Poor/

Bottom

Tie

r

Weak/

Vuln

era

ble

Excelle

nt/

Top T

ier

72,0

70,3

68,5

66,5

66,2

66,0

65,8

63,3

63,0

62,8

0 20 40 60 80 100



2012 2013 2014

1 Skipton Building Society 64,5 71,1 72,0

2 Coventry Building Society 69,1 72,3 70,3

3 Leeds Building Society 61,3 67,2 68,5

4 Yorkshire Building Society 66,9 69,7 66,5

5 Standard Chartered plc 66,3 61,9 66,26 Chelsea Building Society 65,0 69,1 66,0

7 HSBC Holdings plc 61,3 60,6 65,8

8 Bank of England 62,0 61,9 63,3

9 Provident Financial 63,0

10 Natwest 62,8

11 The Co-op Bank 68,8 61,0

12 Lloyds Banking Group plc 56,6 50,7 60,3

13 Santander UK plc 55,1 53,3 59,5

14 Barclays 61,4 50,6 51,0

15 Royal Bank of Scotland plc 35,3 37,4 48,6

n= 5.013

Rank Company RepTrak® Pulse

RepTrak® Pulse - Company development within Financial - Bank 2012 - 2014



RepTrak® Pulse - Company development within Financial - Diversified 2012 - 2014

23

2012 2013 2014

1 Just Retirement 74,9

2 Investec plc 73,4 69,8 74,4

3 ICAP plc 69,5 76,6 72,2

4 Legal & General Group plc 66,6 68,5 72,0

5 Paypoint 71,5

6 Old Mutual plc 69,1 67,5 70,57 Hargreaves Lansdown 70,0

8 LV= 68,7 69,5

9 Close brothers 76,5 69,2

10 Caledonia Investments 68,9

11 Derwent London 68,8

12 Man Group PLC 67,6 68,2

13 3i Infrastructure 68,2

14 Nationwide Building Society 68,5 74,6 67,5

15 Schroders plc 72,2 72,4 66,6

16 Blackrock World Mining Trust 66,5

17 Aberdeen Asset Management 66,4

18 Daejan Holdings 65,7

19 Standard Life plc 70,7 64,1 65,1

20 Ashmore Group plc 69,6 65,0

21 Paragon Group of Companies 64,5

22 London Stock Exchange 63,0 62,8 63,7

23 3i Group 66,5 75,9 63,6

24 Countrywide 61,2

Rank Company RepTrak® Pulse

n= 4.484



Dimension Weight ScoreProducts 17,4% 64,6

Innovation 12,0% 59,5

Workplace 12,5% 62,7

Governance 19,4% 60,6

Citizenship 13,8% 60,4

Leadership 11,4% 61,5

Performance 13,5% 63,9

Rep

Tra

k®

Dim

en

sio

n I

mp

ort

an

ce

Fin

ancia

l -

Bank

n= 1.614

Financial - Bank

RepTrak® Dimension Score

8%

10%

12%

14%

16%

18%

20%

22%

56,0 58,0 60,0 62,0 64,0 66,0 68,0

LESS IMPORTANT

IMPROVE PERCEPTION MAINTAIN PERCEPTION

OPPORTUNITY

Reputation dimension performance vs importance - Financial - Bank 2014

Strong/

Robust

Average/

Moderate

Standard

Chartered

plc

HSBC

Holdings plc

Provident

Financial

Lloyds

Banking

Group plc

Barclays Royal Bank of

Scotland plc

2014 n = 111 n = 105 n = 108 n = 104 n = 105 n = 109

2013 n = 98 n = 178 n = 185 n = 184 n = 104

2012 n = 82 n = 103 n = 103 n = 102 n = 102

Excellent/

Top Tier

Weak/

Vulnerable

Poor/

Bottom Tier

66,3

61

,3

56

,6 61

,4

35

,3

61,9

60

,6

50

,7

50

,6

37

,4

66,2

65

,8

63

,0

60

,3

51

,0

48

,6

0

10

20

30

40

50

60

70

80

90

100

20

12

20

12

20

12

20

12

20

12

20

12

20

13

20

13

20

13

20

13

20

13

20

13

20

14

2014

2014

2014

2014

2014

0

10

20

30

40

50

60

70

80

90

100

Standard Chartered plc vs benchmarks - 2012 - 2014

n= 111

Standard Chartered plc

69,6

66,0

62,1

64,3

65,3

63,3

68,5

Reputation dimensions of the UK’s largest banks

n= 105

Barclays

57,7

52,8

53,2

46,1

54,7

53,7

56,4

n= 105

HSBC Holdings plc

71,4

65,2

59,9

63,5

62,5

64,4

68,0

n= 104

Lloyds Banking Group plc

61,8

58,0

59,1

54,5

62,2

59,0

64,3

n= 109

Royal Bank of Scotland plc

45,6

45,5

46,2

42,6

54,4

47,8

50,0

Standard Chartered plc 11,5% 8,0%

Provident Financial 14,8% 7,8%

Lloyds Banking Group plc 21,0% 7,3%

HSBC Holdings plc 8,7% 9,2%

Barclays 31,6% 11,4%

Royal Bank of Scotland plc 37,1% 2,8%

Buy

[sorted by positive]

Q: If I had the opportunity, I would buy the products/services of "Company"

51,3%

48,6%

45,5%

58,8%

38,0%

45,4%

29,3%

28,7%

26,2%

23,4%

19,0%

14,7%

Negative (1-2) Neutral (3-5) Positive (6-7) Not Sure

Supportive behavior distribution





Barclays 30,7% 6,5%


Recommend company to others


Q: I would recommend "Company" to others

44,6%

51,5%

49,4%

58,3%

41,7%

35,7%

27,2%

26,8%

26,4%

24,8%

21,1%

20,0%







Barclays 29,6% 8,5%


Trust them to do the right thing


Q: If "Company" was faced with a product or service problem, I would trust them to do the right thing

54,3%

46,8%

57,3%

47,0%

39,1%

48,4%

29,5%

29,4%

28,1%

28,0%

22,9%

17,7%








Barclays 35,4% 13,3%

Work for


Q: If I had the opportunity, I would work for "Company"

42,6%

49,7%

49,1%

34,9%

38,2%

30,5%

31,9%

28,9%

28,9%

28,0%

27,3%

20,9%


Supportive behavior distribution - Standard Chartered plc vs benchmarks

Reputation Risk

Conclusions

1. There are some positive trends emerging showing that the informed public are beginning to restore their trust in financial industries.

2. Perceptions of ethical business behaviour are key reputation drivers and it is here that the overall industry underperforms.

3. This has implications for the sector as reputation is linked to support – “until I believe you behave ethically, I will be critical and unsupportive”

4. This has the potential to undermine the investments being made in marketing products.

Key Analysis & Modeling Techniques

32

RepTrak® Pulse Score All RepTrak® analyses begin with a single reputation score (the RepTrak® Pulse) that is decomposed into a set of underlying dimensions and attributes. The process of decomposition involves application of various forms of multivariate analyses designed to address interdependence and multicollinearity in data obtained from cognitive research. At the core, the RepTrak® Pulse measures reputation consisting of three questions about the emotional appeal of the company and a rating of the “Overall Reputation” of the company. Structural Equation Modelling indicates that these four variables are a reliable indicator of the reputation construct. • [Company] is a company I have a good feeling about • [Company] is a company that I trust • [Company] is a company that I admire and respect • [Company] has a good overall reputation

Attributes were measured on 7-point scales, where 1 = Strongly Disagree and 7 = Strongly Agree. Results are re-scaled to 100-point scale for easier interpretation.

Key Analysis & Modeling Techniques

33

Normative Scale Using an extensive database containing results from thousands of studies throughout the world since 1998, Reputation Institute has developed a Normative Scale (in everyday language “The Traffic Light”) that indicates whenever a particular score is high or low when benchmarked against previous studies of a similar character.

Excellent/Top tier 80+

Strong/Robust 70-79

Average/Moderate 60-69

Weak/Vulnerable 40-59

Poor/Low est tier <40

Driver Analysis The relative contribution of individual dimensions to the RepTrak® Pulse is calculated from a factor adjusted regression modeling procedure. Individual dimension weights range from 0-1, and total to 100%. To determine drivers of reputation, the weights are developed with a Factor Adjusted Linear Regression:

Factor analysis is used to determine the unique contribution of each attribute to the variance of the RepTrak® Pulse. Equamax rotation is used to assign the factors to the dimensions. It creates an orthogonal structure of uncorrelated variables that allows the regression to be performed without interference from multicollinearity. It is used to maximize interpretation of the final set of regression coefficients. Linear Regression is run using the Raw Pulse Construct as the dependent variable and the factor scores as the independent variables. Only attributes that were found to be significantly correlated with the reputation (p<0.05) have driver weights assigned.

RepTrak® Scores - Standardized and Comparable

34

Market research shows that people are inclined to rate companies more or less favorably in different countries, or when they are asked questions directly or online. When asked in a personal interview, for example, it’s known that people tend to give a company higher ratings than when they are asked by phone, or when they are asked to answer questions about the company online. This is a well-established source of ‘systematic bias’. Another source of systematic bias comes from national culture - in some countries, people are universally more positive in their responses than in other countries. In statistical terms, it means that the entire distribution of scores in a ‘positive’ country is artificially ‘shifted’ in a positive direction for all companies, good or bad. The distribution of scores in that country may also be more ‘spread out’ than in another because people have more information and are able to make more subtle differences between companies. To overcome this systematic bias, Reputation Institute’s policy is to adjust all RepTrak® scores by standardizing them against the aggregate distribution of all scores obtained from the Reputation Institute’s Annual Global RepTrak® Pulse. Standardization has the effect of lowering scores in countries that tend to over-rate companies, and has the effect of raising scores for companies in countries that tend to rate companies more negatively.

Succeeding in the Reputation Economy · The RepTrak® model explains Reputation 2 The RepTrak®...

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