How’s Your Reputation?

Consumers have confidence in their breakfast cereal and their undergarments, apparently. The 2015 US Consumer RepTrak list of the most reputable companie in the US is out, and among consumer product firms, Kellogg's leads the way, followed by Lego and Fruit of the Loom.


At No. 8, Clorox is the first company in the household and personal products industry to make the list but it's in good company. Other familiar firms include: Unilever (No. 20), LVMH (No. 27), Johnson & Johnson (No. 28), Procter & Gamble (No. 29), Revlon (No. 43), Colgate-Palmolive (No. 45), SC Johnson (No. 46) and L'Oréal (No. 48). The list is complied by Reputation Institute.


What drives a company's reputation? Pretty much what you'd think: high quality products and services; innovative products or the way it conducts business; ethical behavior; visible leadership that manages effectively and good financial results. Moreover, a solid reputation can lead to financial gains. According to the Institute, since the Great Recession that began in 2008, those companies with a strong reputation have performed significantly better (almost 2X the return) than the overall market; When a crisis hits, 54% would give reputable companies the benefit of the doubt in a crisis compared to just 20% for lower reputation companies, according to the Institute.


Furthermore, companies with better reputations are invited to provide input to policy makers when new regulations are designed (Qualitative research from RI policy maker and regulator studies). Buyers with better reputations are approached more often, are more likely to get the deal done and at a better price, according to the results of interviews that RI conducted with CFOs. Finally, good company reputation is a key driver for employee pride and engagement. A strong reputation is a leading indicator for employees willingness to deliver on the company strategy, according to RI findings from employee reputation and alignment studies.