In April 2010, the Reputation Institute, a private consulting firm, released its annual “Reputation Pulse,” which measures the corporate reputation of U.S. companies. Ranking is based on consumers’ perceptions of four indicators—trust, esteem, admiration and good feeling—about a company, while also gauging perceptions across seven rational dimensions of reputation.

For the second consecutive year, Johnson & Johnson was named as the most reputable company in the U.S. Rounding out the top 10, in descending order, were Kraft Foods, Kellogg, The Walt Disney Company, PepsiCo, Sara Lee, Google, Microsoft, UPS and Dean Foods. AIG, the financial services company, finished 150th out of the 150 companies included in the survey.

According to the Reputation Pulse findings corporate reputation has an increased impact on business results—a company’s reputation score has a positive and direct link to consumer attitudes and behaviors. More than ever before, a company with a strong reputation gains not just the intangible goodwill of consumers, but directly reaps lucrative bottom-line results. In comparing the Top 10 to the Bottom 10 measured companies, the general public is:
• 300% more likely to verbally support or give the benefit of the doubt;
• 200% more likely to consider products; and
• 350% more likely to purchase products of highly regarded companies.

To illustrate the direct correlation between how well a company manages its reputation and how likely consumers are to recommend or reject the company let’s take a look at the #1 ranked, Johnson & Johnson, and last place finisher, AIG.

Recently Johnson & Johnson was in the news because of a recall for children’s Tylenol and other drugs. Within a very short period of time, the story fell off the radar screen of most media. This was partially due to the fact that the company immediately announced the actions it would take to remedy the problem. But, just as importantly, the company has an excellent corporate reputation and was given the benefit of the doubt by consumers.

Compare that with last place AIG, which is still struggling to regain consumer trust. The company’s stock declined 4.5 percent in 2009 after dropping 97 percent in 2008, the year of its bailout by the government to prevent losses at bank trading partners.

Anthony Johndrow, partner and managing director, Reputation Institute North America, offers this insight gleaned from the survey, “This year’s results illustrate a direct correlation between how well a company manages its reputation and how likely consumers are to recommend or reject the company. A good reputation is not just a nice-to-have; it’s a bottom-line business imperative.”

A positive corporate reputation and image is an invaluable company asset—one that needs to be nurtured and invested in. Think about your organization’s reputation. What does it stand for? Are you committed to the principles of the core characteristics of the company and its products or services? Will you “walk the talk?” Are you investing in its reputation as part of your long-term strategy?

What do you think? I believe a corporate reputation has always been an important issue, but in the recent past it has become an even hotter one. I am very interested to hear your thoughts.

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