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By STEPHEN LLOYD
Reputation matters. If managed well, it is a valuable asset
and represents a significant proportion of a firm's market value.
It is a source of stock market equity. It is a source of
stakeholder loyalty and makes an organisation more resilient to
sudden and unexpected downturns.
There is evidence of a growing consumer focus on what a
company stands for rather than just its brands and its branding.
In
Japan
, marketers have, for many years, understood the value to brand
development of getting consumers to like the company.
So, what is reputation? Simply stated, it is the overall
esteem in which an organisation is held. It is an assessment, made
over time, of its ability to provide valued outcomes to
stakeholders.
If it is so simple, why are so many organisations getting
it so wrong? Why are they learning, too late, of its vital
importance?
I think it is because of some basic misunderstandings:
* That reputation is
the concern only of big companies - Fonterra, Air New Zealand,
BNZ, The Warehouse and Telecom. It is not. It is vital to any
organisation: to start-ups, SMEs, NGOs, government departments,
universities, political parties, cause-related organisations.
* That reputation is
relevant to a limited area of communications activity. In practice, however, it has been seen to be essential to the
development and implementation of effective communications
strategies. In its successful pitch for the British Rail account,
JWT London identified two key functions for advertising: to increase
revenue and to improve reputation.
They overlap. Clearly there is no value in increasing
people's respect for an organisation unless that respect helps the
organisation to become more successful, more self-sufficient,
delivering greater satisfaction.
* That branding is a
sine qua non that pre-empts the need for reputation communications.
Alas, branding is not enough. When Air New
Zealand
was preparing for a
major share offering, it took more than the projection of brand
properties to strengthen its reputation in the eyes of potential
investors.
It took an understanding of its renewed spirit of
determination and of its international successes and achievements to
create a TV and print advertising campaign that built legitimacy for
the airline in the eyes of targeted stakeholders.
Staff and
New Zealand
travellers were not overlooked as stakeholder targets.
Reputation, therefore, is as relevant to advertising strategy as it
is to PR and to other elements in the communications mix.
* That reputation is
synonymous with image, identity and branding. It is not. These
components are quite distinct from, yet contribute to the
development of a strong reputation.
* That reputation
communications are vague, untargeted and cannot be monitored.
This is clearly not the case, provided communications are
stakeholder focused.
Consumers, lapsed users, investors, suppliers,
distributors, licensees, the Government, may all be stakeholders.
Each stakeholder segment has distinct needs and expectations.
Communications, therefore, must be strategically targeted and co-ordinated.
* That reputation is
of interest only to CEOs. They certainly need to be involved.
They are vital to reputation management and development.
An organisation's reputation is closely correlated to its
CEO's reputation and vice versa. Yet if reputation is about the
recognition of what a company stands for - its culture and its
achievements - it needs to be more than a top-down exercise.
While a sense of urgency is important in reputation
assessment, management and communication, it does not come as a
quick fix. Organisations should be thinking today about the
reputational space they want to occupy in tomorrow's marketplace.
*
Stephen Lloyd
is a member of the Marketing and
Advertising Group at
Auckland
University
of Technology where he directs an
organisational reputation programme.
.
This article can be viewed online at:
http://www.nzherald.co.nz/index.cfm?ObjectID=3573045
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