Corporate reputation management has become a buzz phrase for the PR industry, spawning a whole new category of measurement. According to a Hill & Knowlton/Chief
Executive Magazine survey, 96% of CEOs believe their company's reputation is important to business success. But only 19% have begun measuring reputation. Despite all the
talk, a standard reputation yardstick is elusive.
Reputation measurement is a fundamental function of the PR department. "One of the real values PR brings is as a protector and developer of corporate reputation," says David
Hackney, manager of public relations for Philadelphia Electric Co.
A year ago, Hackney devised a proposal to senior management for measuring Philadelphia Electric's corporate reputation. The utility company partnered with market research firm
Walker Information to evaluate its reputation among customers, media, community groups and government officials. Hackney's corporate reputation measurement system now is being
applied to its merger situation as well. When Philadelphia Electric and Unicom complete their merger to form Exelon, the new company will use the information from reputation
measurements in building a new reputation.
Not only can that sort of proactive PR tell you where you stand, it can be the key to crisis preparedness. Reputation measurement can uncover weaknesses long before a
disaster strikes. If Microsoft had had a better understanding of its reputation among government officials and addressed that in its communications, it might have abated
regulators' need to punish the company.
Bringing corporate measurement under the PR umbrella also can be a critical component to selling senior management on the value of the PR department. Not only will uncovering
the reality of your corporate reputation endear you to execs who recognize the importance of reputation, but the information the measurement provides can serve as a benchmark for
measuring PR efforts. Knowing that only 7% of media influencers view your company as a responsible corporate citizen this year, for example, can be the basis of a media relations
campaign that brings that figure to 70% next year.
Measuring Success
Establishing a quantitative measurement system for corporate reputation can be a labor-intensive - and expensive - process. While simple customer surveys may cost little more
than an investment of time, a more complex system, either in-house or in partnership with an agency, can sport a multi-million dollar price tag. To make sure you're getting the
most from your measures, experts recommend the following steps:
Align goals for the measurement system with other internal goals. "Alignment is the foundation" of successful corporate measurement, says Bill Margaritis, FedEx
corporate VP of communications and investor relations. "The desired state for communications is to have a seat at the table and actively influence events. If you're too focused
on moving the needle with audiences and not the executive team, you invariably will not reach the desired state."
Set appropriate expectations and find out what senior management and other players within your corporation want to know about reputation. Define how the information will be
used in building future strategies.
Identify your key stakeholders. Are you interested in what financial analysts and execs at other companies think about your company, or do their opinions reflect a
popularity contest mentality? Should reputation among employees be a separate category? The answers to these questions depend on goals for the measurement system and the type of
company.
Defining key players within these categories can be a challenge as well. "There's a great deal of customization to how you define these groups," says B.J. Kyzr-Sheeley, SVP
with Walker Information. "How do you get a listing of names? It may be something the company has, like a list of customers or vendors, or something more difficult like a media
list or a list of government officials."
Define factors to measure. Margaritis recommends doing an audit of various departments within your corporation to define "the most vulnerable and challenging issues
they're dealing with and determine what's the most important in terms of risk and consequences." Broad categories for measurement include reputation of products and services,
perceptions of the effectiveness of senior management, perceptions of corporate citizenship, financial reputation and industry leadership.
Establish measurement methods. Phone surveys are the most popular method of measuring reputation, but tools like focus groups and audits of media coverage can play a
role as well. Experienced reputation evaluators learn to tweak measurement methods according to the situation.
Certain stakeholders may be more difficult to survey than others, says Kyzr-Sheeley. Media contacts and community leaders are notoriously difficult to contact for surveys, and
special treatment may be required to snag these players.
"We have not found an infallible method," says Tom Martin, SVP of corporate relations for ITT Industries. ITT Industries' 75-year history includes massive restructuring, which
can make measurement particularly tricky (PRN, Feb. 14). While there may be no infallible method, Martin has honed his system. "We've gone through several
transformations. When you ask someone a question about ITT [you have to ascertain] are they answering about the old ITT conglomerate? Are they answering about the company
today?"
(FedEx: Bill Margaritis, 901/818-7090; ITT Industries: Tom Martin, 914/641-2157;
Philadelphia Electric: David Hackney, 215/841-4386; Walker Information: B.J.
Kyzr- Sheeley, 317/843-3939.)
Stages of Reputation
Discovery - the first time a company shows up in a major publication like the New York Times or FortuneCheerleading - media coverage is not only
positive but celebratory; it's a happy time when many corporations do IPOs
Respect - the corporation takes on icon status in the industry and the CEO is quoted on industry-wide issues
Cult-like reverence - companies with a visionary leader (Microsoft) or companies that have forged a long-term bond with their consumers (Johnson & Johnson) achieve
this status
Criticism - media coverage is predominantly negative and "experts" chart the mistakes that were made
Confrontation - company takes angry, defensive stance with the media...threatens to pull advertising.
Conciliation - company (perhaps with new management) admits mistakes were made and implements changes in policies and processes to improve its performance
Outreach - company builds bridges to alienated stakeholders
Return to respect - over time, trust and respect are regained
(Ketchum: Chris Atkins, 212/448-4200)
Measuring Media
Quantifying corporate reputation through media coverage is tricky business at best. How do you compare the value of coverage on an inside page of the New York Times to a
cover story in a local paper or trade publication, for example? And what constitutes positive press?
Ketchum's Reputation Laboratory investigates the connection between corporate reputation and corporate financial performance. As a part of that effort, the agency has
developed its Corporate Parabola, a method of tracking patterns in a company's media coverage over time.
Why track the media? Ketchum looks at how companies are treated in the media "as a shorthand for what investors, other companies and employees are thinking. A good reporter
talks to a lot of people," says Chris Atkins, partner and director of Ketchum's global corporate practice.
The idea is to allow a corporation to anticipate challenges to reputation through the predictable patterns in media coverage and fine tune its PR efforts to counteract those
challenges and break the cycle.