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Wednesday May 17th, 2017 / by admin / In

Riku Ruokolahti: Reputation and brand fought – who won? (1/2)

 

”For me, reputation is just a part of [the] brand,” said the brand head of the world’s biggest steel producer at the end of his speech in Milan.

A large reputation and brand seminar had brought together leading academics, consults, and business leaders around the world to discuss the topic. Bickering on the relationship between reputation and brand took place at the main stage, in breakout groups, and over drinks, to the wee hours of the morning. In the end, the only thing that was clear was that the distinction was not clear.

This cock fight took place five years ago, and I still find myself amidst the same squabble. To this day, way too many are seeking to separate corporate reputation from the brand, or vice versa.

Why shouldn’t they, you may ask, and it’s all very well. The reason is simple. Separating the two can damage your business.

 

We’ll begin by separately considering the corporation and the product.

 

So, let’s take a closer look at how brand and reputation interact. We’ll begin by separately considering the corporation and the product.

On the one hand, the public looks at a company and comes up with a perception of it as a workplace, of how responsibly it operates, and of how transparent it is in its dealings. Audiences also consider how strong the organisation’s financial performance is, and how well it is managed. At T-Media, we understand these dimensions of perception as the corporate ethos.

On the other hand, customers have a perception of the company’s products, such as the price and quality, and the organisation’s innovativeness. These qualities are related to the customer benefits of the product, and here we’re talking about brand.

In recent years, we have collected a massive pool of data through our cutting-edge reputation and trust research and, in the process, we have accumulated a fair chunk of insights on the topic. Recently, with the amount of collated data, we saw an opportunity to examine how corporate ethos and brand impact consumers’ willingness to buy or recommend a product.

 

Cutting to the chase, our findings indicate that corporate ethos constitutes 71% of buying decisions, whereas brand only makes up 29%. In other words, corporate ethos is a much stronger driver for consumers’ willingness to buy than the product itself.

 

Please take a guess, which of the two has a greater effect on consumer behaviour? Corporate ethos or brand?

Cutting to the chase, our findings indicate that corporate ethos constitutes 71% of buying decisions, whereas brand only makes up 29%. In other words, corporate ethos is a much stronger driver for consumers’ willingness to buy than the product itself.

We have been researching the phenomenon since 2013 and, during this time, the significance of corporate ethos has only become stronger.

At this point, there might be an urge to conclude that reputation is much more important to business than a brand. Yes, we are onto something, but as a conclusion, it would be dangerous. Because, in truth, the level of corporate ethos and brand alone is not enough to understand the success formula. There are two more significant aspects to the larger equation, which we need to consider.

So watch this space. I will be discussing these two aspects in my next post, due soon.

 


Riku Ruokolahti

MBA Riku Ruokolahti is T-Media’s development director and leads our Reputation&Trust business. Riku coaches C-level executives and management groups in holistic reputation management. +358 400 512 200, riku.ruokolahti@t-media.fi

 

 

 

 

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