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The ICCO recently published its World PR Report 2020, detailing the views of public relations companies for the forthcoming year. It’s a weighty document, well researched and authoritative. To give a sense of the scale, it draws on responses from 3,000 agency heads operating in the ICCO’s 41 member associations. As chairman, strategic and executive head of my company, this is the sort of thing I have to find time to read.
For me, the stand-out finding was that reputation, the core mission of my business, is consistently ranked by corporate leaders as their most valuable asset. More than that, it is expected to be a key area of growth over the next five years. The appetite for reputation management and advice seems limitless, stemming from two impulses:
1. Proactive: seeking to project a positive image of a person, brand or enterprise.
2. Reactive: fearing a sudden crisis or media disaster which will rock the company boat severely.
We deal with both of these issues, but I’m very glad to say the overwhelming majority of our business is in positive, proactive, constructive reputation management. Clients come to us because they have an idea of what they want to be, how they want to be perceived and what influence they want to have. It’s a satisfying challenge.
So, why is reputation so important? Why does it assume an importance as great as the bottom line, in a world in which we imagine corporations as amoral, grasping, faintly sinister entities, out solely to enrich their leadership and shareholders? What do the feelings of others, many of them not even customers, matter to them? There are two parts to this: one simple — that reputation matters to the bottom line — and the other more textured — that a brand’s image is linked to its underlying purpose. I’ll try to explore them both, based on my experience as an entrepreneur and a PR professional.
Elizabeth Arden coined the phrase, “Repetition makes reputation, and reputation makes customers,” and I believe she was completely right. When consumers make a conscious (or unconscious) choice between brands, for example, they are affected by a whole nexus of influences which can be broadly summarized as “reputation.” Someone buying a car may choose a manufacturer with a record of reliability. A perfume buyer might opt for a brand with an image redolent of luxury and elegance. A person looking to purchase electronic devices may make a decision based on an image of stylish design and efficient functionality.
We can all think of examples: Apple has traded on the looks and youth appeal of its goods for decades; Chanel has a hard-wired reputation as the epitome of Gallic chic, and Audi’s ubiquitous “Vorsprung durch Technik” slogan has served the Ingolstadt automaker’s marketing well for nearly 40 years. Bluntly, reputation is a major contributor to sales and, therefore, profit. According to the World Economic Forum, a quarter of a company’s market value can be directly related to its reputation, and 87% of executives think that reputational challenges are more important than other strategic risks. That’s not something you can ignore.
The importance of reputation is growing, too. Online reviews are now a key part of a brand’s business model. Nearly 40% of consumers have come to distrust traditional advertising — think about that for a moment, and consider how much is still spent in corporate marketing departments — but a majority will take online peer reviews in good faith as somehow infinitely more reliable and authentic, more “real.”
Moreover, customers are increasingly seeking social awareness in the brands they purchase or the companies from which they obtain services. Millennials are strongly characterized in this way. For example, many (especially younger) consumers are highly conscious of sustainability and ecological concerns. The use of palm oil in confectionary is now a toxic association, as Nestlé discovered when Greenpeace parodied an ad for Kit Kats. BP is now promoting a low-carbon future to offset the optics of its trade in fossil fuels, and more recently the scale of the problem of nonrecycled plastics has dominated the news agenda. To attract the lucrative younger demographic and groom them as lasting customers, brands must present a green face to the world.
This represents a wider issue of simply “bad publicity” or “good publicity.” The ICCO’s report reveals that the dynamism in corporate strategy is now coming from purpose. What is a company for? What are its values? The plain answer of profit is no longer enough; indeed, it starts to look rather outdated. Uber, for example, has had a huge effect on the urban landscape in the last 10 years, genuinely revolutionizing the way in which we travel, but it is a loss-making enterprise, and when it launched its IPO earlier this year, it admitted that it may never be profitable.
Purpose seems to be the defining characteristic of the future of business. The CEO of JPMorgan, Jamie Dimon, in his annual letter to shareholders this April, talked not about the cold figures of the bottom line, but of the bank taking “advocacy to the next level” and devoting its energies to causes like education, immigration and tax reform. The Ford Motor Company, inspired by Henry’s vision back in the early 1900s, has cast itself as a leading force in changing how the world moves, ploughing money into autonomous driving technology and the development of digital tools. Purpose first, bolstered by reputation; then profit.
So I return to where I began. The management of reputation and its contribution to the success of businesses is now the key factor being discussed in boardrooms and C-suites. That’s good news for the industry, but it presents us with some challenges, too: we need to be proactive, creative, alert to trends in public opinion, and mindful of squaring the circle of virtue and profit. It’s not easy, but then, few satisfying things ever are. It’s multilayered and intricately woven, requires deep and original thought, and asks a dozen questions for every one that it answers — and I can’t wait.
