{"id":4055,"date":"2020-04-05T11:02:06","date_gmt":"2020-04-05T11:02:06","guid":{"rendered":"http:\/\/www.groupcaliber.com\/?p=4055"},"modified":"2022-01-24T11:40:17","modified_gmt":"2022-01-24T11:40:17","slug":"coronavirus-vs-corporate-reputation-whats-the-connection","status":"publish","type":"post","link":"https:\/\/groupcaliber.banyodev.dk\/index.php\/2020\/04\/05\/coronavirus-vs-corporate-reputation-whats-the-connection\/","title":{"rendered":"Coronavirus vs. Corporate Reputation \u2013 what\u2019s the connection?"},"content":{"rendered":"

Early reputation data shows initial solidarity and ensuing disillusionment when it comes to public perceptions of big business. Who\u2019s most affected and what should companies do?<\/em><\/strong><\/p>\n

I\u2019ve been working as a brand strategist and reputation advisor for over 20 years. And for over 20 years I\u2019ve come across businesspeople who thought that corporate branding and reputation management are \u201cnice-to-have\u201d rather than \u201cbusiness-critical\u201d. Even more so during these unprecedented Corona Days, many executives feel that thinking about their company\u2019s reputation is a complete luxury in the face of urgent actions needed to ensure safety and business continuity. Is that so?<\/p>\n

The social media feeds of most businesspeople these days are full of articles and posts telling them that how they behave now will have a significant impact on the future of their business. From McKinsey claiming that companies will be defined<\/a> by their reaction to COVID-19, to Deloitte saying that leaders will be judged<\/a> on how they respond to the crisis; from Mark Cuban saying CEOs should prioritize<\/a> employees over shareholders, to Sustainable Brands celebrating companies<\/a> that put purpose before profit in these times.<\/p>\n

We at Caliber fully agree.<\/p>\n

But as data analysts we also couldn’t help but ask ourselves: what does the data tell us? What can our reputation metrics around the world already teach us about the impact of the crisis on people\u2019s perceptions?<\/p>\n

So we started analyzing. Having the benefit of surveying thousands of people every day about their perceptions of hundreds of companies around the world \u2013 we looked at the real-time data generated in the last few weeks and tried to identify what patterns emerge. And we found some very interesting patterns indeed.<\/p>\n

European solidarity?<\/span><\/strong><\/h2>\n

To start with, we wanted to assess the overall public sentiment towards companies in different countries. We looked at the average Trust & Like Score \u2013 our primary measurement of corporate reputation \u2013 given by the public in Northern Europe (UK, Germany, Denmark, Sweden, Norway and Finland) when assessing the largest companies in their respective markets in recent weeks.<\/p>\n

\"Reputation<\/a><\/p>\n

The first two months of 2020 \u2013 weeks 1 to 9 \u2013 show a fairly stable average level of perceptions with the usual limited ups and downs from week to week. But as of week 10 (the week commencing Mar. 2nd<\/sup>), when coronavirus cases in Europe started rising exponentially and governments started announcing preventive measurements, the average reputation of these 196 companies began rising consistently week after week. Is it a result of a general sense of public solidarity? A sympathy vote from people towards businesses that will be negatively affected? Or perhaps a positive assessment of these large companies\u2019 initial reaction to the crisis? Very likely it\u2019s a mix of all of the above. But interestingly, this trend reversed very clearly last week, with the first average score decline after 3 weeks of rises.<\/p>\n

So what changed? This could merely be a slight \u201ccorrection\u201d after the continuous increases. But one could also speculate that it\u2019s a result of the fact that in recent days the severity of the situation in Northern Europe has sunk in: more people are dying, companies are starting to fold and people start losing their jobs. There\u2019s now a sense that this crisis may last longer than originally expected, and people are starting to question the decisions made by governments and businesses to tackle the situation. This could very well be the reason behind the drop in overall scores after several \u201ceuphoric\u201d weeks of continuous rises \u2013 a general sense of disillusionment.<\/p>\n

Together we stand \u2013 or not<\/span><\/strong><\/h2>\n

When looking at other countries beyond Northern Europe, we see some clear differences.<\/p>\n

\"Reputation<\/a><\/p>\n

China, which has experienced this crisis earlier than others, tends to have higher reputation scores than in other countries in general \u2013 a phenomenon that can be seen in the average monthly perception scores there last year. But as of November, scores in China have been lower, possibly a result of the coronavirus crisis, which seems to have impacted people\u2019s perceptions of businesses there negatively. At the same time, perceptions have been improving since the start of 2020 in the US, Spain, Italy and the UK \u2013 with no apparent connection to COVID-19 which had only entered the collective consciousness in these countries in early March. Most tellingly though, the changes in March diverge across countries \u2013 with rises in the UK and Germany (2 of the countries that are said to be dealing relatively well with this crisis so far), and drops in the US, Italy and France \u2013 who are suffering more. The exception is Spain, with a rising March score despite the severe situation there these days.<\/p>\n

So what conclusions can be drawn? There are of course many factors at play, and it\u2019s hard to isolate the impact of the coronavirus vs. other triggers for reputational changes, especially considering that these figures are averages of hundreds of companies \u2013 but there does seem to be a general negative impact on perceptions, earlier in China and now in Europe and the US, after a short period of positivity. This reaffirms the tendency mentioned previously in Northern Europe, and may suggest that people are indeed observing companies and how they behave. And these early results indicate they may generally not be satisfied with what they\u2019re seeing.<\/p>\n

Where companies\u2019 reputations head next is difficult to say. However, digging further reveals more interesting patterns \u2013 and differences across sectors.<\/p>\n

Flying high and banking low<\/span><\/strong><\/h2>\n

We drilled into our global weekly results and grouped company scores by sector to identify how the different sectors fare on a global basis. This is where we could clearly see that the above-mentioned tendencies are in fact more nuanced than they first appear.<\/p>\n

\"Reputation<\/a><\/p>\n

The first sector we were interested in was airlines \u2013 those were the companies that experienced the earliest and deepest negative impact of this crisis. They were also the first ones that had to actively handle the aftermath by dealing and communicating with passengers, staff and other stakeholders. Reputational data of a selection of airlines worldwide shows that perceptions of the sector have gotten stronger over the last 6 weeks, with this pattern continuing last week despite the overall drop in sentiment seen across the board.<\/p>\n

\"Reputation<\/a>Banks and insurance companies, however, experienced things differently. Looking into these two sectors was interesting due to their increasingly important role in the current situation: insurance companies are expected to reimburse people for losses due to cancelled travel plans or loss of employment, while banks are expected to inject liquidity into the economy and help their personal and business customers get by financially. In both cases we\u2019re seeing global public disappointment: insurance companies got a reputational boost at start, only to experience a large drop in score in week 14 as people\u2019s expectations were apparently not met. Banks, on the other hand, have seen a continuous moderate decline since week 11 \u2013 perhaps expectations there were low to begin with, as opposed to the case with insurance companies. We know from previous studies<\/a> that insurance companies tend to be viewed more positively than banks, but it’s the mirror image of how the reputations of these two sectors have evolved in recent weeks that is most interesting in this case.<\/p>\n

These results are important. They show that while the general sentiment follows a certain pattern in most countries, opinions vary based on which sector and company people rate. This certainly confirms that not all large companies are seen as one, and that people are in fact judging companies (or at least sectors) based on what they do.\"Reputation<\/a><\/p>\n

Another such divergence of opinions can be seen in the retail sector, where opinions about food retailers soared at first but have recently declined \u2013 whereas opinions of non-food retailers followed an opposite trajectory.<\/p>\n

Were people first happy about the continued physical and online access to food stores, and then gradually got upset about food shortages? Were they disappointed with other retailers for lack of availability or online competency, but are now showing sympathy for their misfortune? It\u2019s hard to tell, but the contradictory patterns are certainly interesting and unexpected.<\/p>\n

Bottom line<\/span><\/strong><\/h2>\n

What does all this mean about the reputational impact of COVD-19? Is it indeed fair to say that now more than ever is the time to think about your company\u2019s reputation? Will it really have an impact on the company\u2019s future commercial success?<\/p>\n

While the insights emerging from our global analysis of companies\u2019 reputation in recent weeks all focus on country and sector averages, our data clearly shows that crisis reactions from companies like Novo Nordisk<\/a>, Visa<\/a>, Unilever<\/a> and others are already reaping reputational dividends to those companies. People are indeed paying attention. Whether these reputational wins will be long-lasting or not may be hard to predict \u2013 but our experience from past crises shows that reputational gains are harder, and take longer, to achieve than reputational losses. It is fair to predict that those companies that face a negative backlash to their reputations these days will have to work hard and long to repair the damage \u2013 while those who preserve goodwill at these difficult times will benefit from it in the coming months and years. It is for this reason that we agree with McKinsey, Deloitte, Mark Cuban and many others in predicting that companies\u2019 behavior at this time will have a profound long-term impact on their reputations: people take notice of how companies are reacting these days, and those impressions will stick. Companies who put employees and customers before shareholders, and purpose before profit, should see reputational dividends over time \u2013 and vice versa.<\/p>\n

As for those businesspeople who still doubt the \u201cbusiness-critical\u201d aspect of brand and reputation: if you really think you can build a successful business in the long run without being trusted by your key stakeholders \u2013 perhaps this crisis will give you pause for thought. The COVID-19 crisis will no doubt be vicious and wreak economic havoc; but it also gives businesses the opportunity to live up to their values and do the right things \u2013 both because of the moral and ethical imperatives, and because it will benefit them in the long-run, putting them on the right side of history in more ways than one.<\/p>\n

Click here<\/a> to read about our offer of free reputation analytics to help companies navigate the reputational impacts of COVID-19.<\/em><\/p>\n

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If you are interested in this topic you might like the following:<\/strong><\/p>\n

Trust in Financial Sector 2020<\/a>
\nHelping companies navigate the reputational impact of COVID-19<\/a>
\nThe SAS campaign caused a storm \u2013 but did it hurt the airline\u2019s reputation?<\/a><\/p>\n