US Corporate Reputations Decline; Brands Face Authenticity Deficit

April 27, 2018

Corporate reputations in the US have diminished this year compared to 2017, according to the Reputation Institute’s “US RepTrakĀ® 100” presentation [download page]. Only about half of consumers trust companies to do the right thing, down from 62% last year, and just 41% give companies the benefit of the doubt, down from 56% last year.

Men Ages 25-44 Show Biggest Decline in Confidence

Brand reputations – in the aggregate – suffered the biggest decline among 25-44-year-olds, dropping from an overall score of 83.2 last year to just 75.6 this year.

Men of that age were the most affected, with their aggregate reputation score for companies falling from 81.2 to 76.

The declines in reputation scores were larger among men than women of this age group across all dimensions of corporate reputation, but were most strongly felt in the Citizenship dimension, which measures what companies are doing for communities and society at large.

The Reputation Institute attributes these declines to a growing belief that companies focus on profits over people. Placing customers ahead of profits has been shown to be one of the building blocks of trust, and indeed one study from MarketingSherpa [download page] found that the most broadly cited experience among dissatisfied customers was the company not putting their needs and wants above its own business goals.

Brands Aren’t Seen As Sharing Consumers’ Values

Beyond an erosion of trust in companies, fewer consumers are also seeing companies as authentic. This year just 48% of respondents in the Reputation Institute study say that brands appear genuine about what they say and stand for, with this down from almost two-thirds (64%) last year. Additionally, only 47% feel that brands stand out from the crowd, with this also down from last year (61%).

In fact, only 1 in 4 companies are deemed as sharing the same values and beliefs as consumers. This is borne out by an analysis of brand persona associations, which finds few consumers ascribing various positive traits to brands, including:

  • Modern (39%);
  • Genuine (34%);
  • Creative (34%);
  • Sincere (22%); and
  • Caring (19%).

No wonder brands are facing a trust deficit

What Builds A Reputation?

As brand reputations decline in the aggregate, their drivers are shifting. This year the report reveals that reputation is more likely to be defined along the lines of Products/Services and Governance, and less so on Citizenship.

As such, the single largest components of a strong reputation – high quality products/services and good value products/services – are on the rise in terms of importance. The trouble is that the average company score has decreased across these and other important measures.

Those other measures include being a positive influence on society and behaving ethically, both of which have become more critical to reputation but at the same time have suffered in the actual scores.

Communication Worsens; CEOs to the Rescue?

Another aspect of brand reputation that has fallen off this year is brand communication. This year only one-third of the general public feels that what is being communicated to them by companies is relevant.

This is again borne out by several reputation measures that have dropped off in consumers’ eyes, ranging from:

  • Providing sufficient information about its activities (31.3% of respondents, down from 47.6%); to
  • Communicating often (27.8%, down from 42.9%); and
  • Welcoming open discussion (24.1%, down from 41.1%).

There may be an opening for brands to increase their levels of communication using the CEO. As it stands, familiarity with company CEOs stands at just 9%. But those who are familiar with a CEO are far more likely to rate companies highly on various components of reputation, including Innovation, Citizenship and Governance.

That’s interesting in light of a study released earlier this year, which found that CEOs – along with other voices of authority – have grown in credibility, even against a backdrop of stagnating trust in business.

Which Companies Are Getting it Right?

There are 7 companies leading the way, per the study, with aggregate reputation scores above the threshold of Excellence (80). These are:

  • Campbell’s (82.2);
  • Nike (82.1);
  • Bose (81.7);
  • Barnes & Noble (81.3);
  • Kellogg’s (81.2);
  • Hershey’s (81.0); and
  • Hallmark (80.4).

With the exception of Hallmark, each had an increase in rank this year. (A separate ranking of the most reputable companies in the US this year can be found here.)

Consumer (72.1) companies fared best overall in terms of industries, one of only 3 with a strong reputation score exceeding 70. Food & Beverage (71.8) was next, followed by Automotive (70.4).

As for Facebook? It had sizable reputation declines across all dimensions – particularly Governance (providing an open and honest company position on product performance and involvement in the political and social arena), and has one of the lowest data privacy scores of all the companies measured for the report.

The full presentation can be downloaded here.

About the Data: The US RepTrakĀ® 100 is based on more than 52,000 individual ratings of more than 880 nominated companies. Of those, there are 479 eligible companies, after filtering out: companies with less than 30% familiarity among the general public; product brands; and companies with less than $3 billion in revenues.

Survey results are based on an informed general public that is somewhat or very familiar with the company evaluated.

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