Reputation Institute’s Global Reputation Pulse 2009: A Reminder of the Importance of Intangibles

The Reputation Institute has released its annual report, Global Reputation Pulse 2009, on the reputation of over 150 major corporations. The companies were in terms of seven aspects of reputation management: Products/Services, Innovation, Governance, Workplace, Citizenship, Leadership and Performance. The Reputation Pulse score is a measure of corporate reputation calculated by averaging perceptions of four indicators―trust, esteem, admiration, and good feeling―obtained from a representative sample of at least 100 local respondents who were familiar with the company. Since the study was done online and may be subject to numerous systemic errors and biases from its methodology and small samply size, I suggest taking it as only a rough indicator of what some consumers may perceive.

In spite of limitations in methodology, the report does offer a reminder about the economic importance of intangibles such as reputation and trust. The Reputation Institute suggests that these intangibles can translate into direct economic benefit:

According to the U.S. Reputation Pulse findings, a company’s reputation score has a positive and direct link to consumer attitudes and behaviors. For example, by improving its reputation score five points, a company can increase recommendations within the general public by 6.5 percent. In a competitive situation, increasing recommendations by two to five percent can have a dramatic impact on the bottom line. With 65 percent of consumers saying they would recommend one of the top 10 most reputable U.S. companies to others, organizations like Johnson & Johnson, Caterpillar and Whirlpool showed they have effectively used recommendations to drive business and reputation in a time when consumer confidence is on a continuous decline.

As Consumer Goods Today observes, nine of the top 25 are consumer goods companies, and the consumer goods category leads the way in term of reputation. Good news for that sector, though again, take it with a grain of salt.

Here is an excerpt from the press release and a list of the top 25:

NEW YORK, April 29, 2009 ― Johnson & Johnson moved up one spot to take the lead as the most reputable U.S. company on Reputation Institute’s 2009 U.S Reputation Pulse. Kraft Foods, UPS, General Mills, and FedEx rounded out the top five U.S. companies in 2009, all with excellent reputations. AIG, the beleaguered financial services firm, suffered the biggest drop in the index, finishing 152 out of the 153 companies included in the survey. Last year’s winner, Google, fell to number eight and lost significant reputation capital. Dow Chemicals and Wal-Mart saw the largest gains in reputation, improving their Reputation Pulse scores by more than 12 points from 2008 to 2009. The Reputation Pulse measures the corporate reputations of the largest U.S companies based on consumers’ trust, esteem, admiration, and good feeling about a company across seven dimensions of reputation.

“In today’s tough economic climate, corporate reputation is critical to sustaining and growing business,” said Anthony Johndrow, managing director, Reputation Institute. “This year’s results illustrate a direct correlation between how well a company manages its reputation across seven key dimensions 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.”

Here are the top 25:

Global Reputation Pulse – U.S. Top 25

Rank, Company,  Score

1 Johnson & Johnson 83.58

2 Kraft Foods 81.09

3 UPS 80.84

4 General Mills 80.80

5 FedEx 80.30

6 Whirlpool 79.86

7 Walt Disney Company 79.44

8 Google 78.80

9 Caterpillar 78.69

10 Costco Wholesale 78.53

11 Microsoft 78.05

12 3M 77.88

13 Colgate-Palmolive 77.65

14 Kimberly-Clark 77.47

15 Procter & Gamble 77.08

16 PepsiCo 76.69

17 General Electric 76.20

18 Apple 76.15

19 Kroger 75.89

20 Amazon.com 75.74

21 Lowe’s (Home Improvement) 75.33

22 Berkshire Hathaway 75.03

23 Publix Super Markets 75.02

24 Texas Instruments 74.70

25 Hewlett-Packard 74.59