Reputation and brand went head-to-head — who won?
“For me, reputation is just part of the brand,” said the brand head of the world’s largest steel producer at the end of his speech in Milan.
A major seminar on reputation and branding had brought together leading academics, consultants, and business leaders from around the world to discuss the topic. Debates on the relationship between reputation and branding took place on the main stage, in breakout sessions, and over drinks, lasting well into the early hours of the morning. In the end, the only thing that was clear was that the distinction was not clear.
This battle took place five years ago, and I still find myself caught up in the same squabble. To this day, far too many people are trying to separate corporate reputation from the brand—or vice versa.
"Why shouldn't they?" you might ask, and that's all well and good. The reason is simple: separating the two can harm your business.
We’ll start by looking at the company and the product separately.
So, let’s take a closer look at how brand and reputation interact. We’ll start by examining the corporation and the product separately.
On the one hand, the public forms an impression of a company as a workplace, of how responsibly it operates, and of how transparent it is in its dealings. Audiences also consider the strength of the organization’s financial performance and the quality of its management. At T-Media, we view these aspects of perception as the corporate ethos.
On the other hand, customers have certain perceptions of the company’s products—such as their price and quality—as well as the organization’s innovativeness. These qualities are linked to the benefits the product offers customers, and this is what we mean by “brand.”
In recent years, we have gathered a vast amount of data through our cutting-edge research on reputation and trust, and in the process, we have gained a wealth of insights on the subject. Recently, given the volume of data we have collected, we saw an opportunity to examine how corporate values and brand image influence consumers’ willingness to purchase or recommend a product.
To cut to the chase, our findings indicate that corporate ethos accounts for 71% of purchasing decisions, whereas brand accounts for only 29%. In other words, corporate ethos is a much stronger driver of consumers’ willingness to buy than the product itself.
Take a guess: which of the two has a greater impact on consumer behavior? Corporate ethos or brand?
To cut to the chase, our findings indicate that corporate ethos accounts for 71% of purchasing decisions, whereas brand accounts for only 29%. In other words, corporate ethos is a much stronger driver of consumers’ willingness to buy than the product itself.
We have been studying this phenomenon since 2013, and during that time, the importance of corporate ethos has only grown.
At this point, one might be tempted to conclude that reputation is far more important to business than a brand. Yes, there is some truth to that, but it would be dangerous to draw that conclusion. Because, in reality, corporate ethos and brand alone are not enough to understand the formula for success. There are two other significant factors in the bigger picture that we need to take into account.
So stay tuned. I’ll be discussing these two aspects in my next post, coming soon.
“For me, reputation is just part of the brand,” concluded the chief brand officer of the world’s largest steel producer in his speech in Milan.
Leading academics, consultants, and business executives in the field were invited to the roundtable discussions at the reputation and branding seminar. The topic was debated on the main stage, in small groups, and even over cocktails in the evenings. One thing became clear: there is no consensus on the matter.
It’s been five years since the Milan brand war, but I still find myself in the same predicament. Too many companies stubbornly build their brands in isolation from the company’s reputation. The same thing happens the other way around.
Why shouldn't you do that? Because backstabbing can be devastating to a business.
First, you need to be able to distinguish between the company and the product.
Let’s take a closer look at how reputation and brand are formed. First, we need to distinguish between the company and the product. The public has perceptions of the company as a workplace, regarding its corporate responsibility, transparency, financial success, or leadership. At T-Media, we refer to these company-centric perceptions as the company’s ethos.
On the other hand, customers have perceptions of a company’s products: their price, quality, or, for example, their innovativeness. These factors relate to the benefits the customer receives. In this context, we are talking about the product brand.
At this point, a bold move might be to cut through the red tape and separate the reputation from the brand.
An analysis using Reputation&Trust reveals that a company’s ethos accounts for 71 PERCENT of the purchasing decision, while the product brand accounts for 29 PERCENT. A company’s ethos therefore has a significantly greater impact on purchasing intent than the product itself.
However, since we have a vast amount of data and expertise from Reputation&Trust, we couldn’t resist taking a closer look. We examined the link between a company’s ethos and its product brand and consumers’ willingness to buy or recommend its products. Can you guess which one has a greater impact on purchasing decisions?
An analysis using Reputation&Trust reveals that a company’s ethos accounts for 71 percent of the purchasing decision, while the product brand accounts for 29 percent. A company’s ethos therefore has a significantly greater influence on purchasing decisions than the product itself.
We have been studying this trend since 2013. During this time, the importance of corporate ethics has only grown.
Eetos is reshaping perceptions of its products.
We have been studying this trend since 2013. During this time, the importance of corporate ethics has only grown.
It would be easy to draw another conclusion here: that reputation is significantly more important to business than the product brand. While this is, in principle, an important insight, it is a dangerous conclusion to draw. The fact is, these two factors alone are not enough for success. Alongside reputation and brand, there are two other factors at play, the significance of which I will explore in my next post.
