“Purpose” is one of three critical dimensions of overall reputation, according to the 2018 Porter Novelli/Cone Purpose Premium Index: How Companies Can Unlock Reputational Gains by Leading with Purpose, released today.
The study, examining US consumer perceptions of the country’s top 200 companies, also finds that a purpose-driven approach to business is intrinsically linked to a company’s reputation.
The research revealed a strong correlation between Purpose and Reputation, as these scores moved together for nearly nine out of every 10 companies (88 percent) ranked. In fact, of the top 10 leaders named on both the Purpose and Reputation lists, four companies landed on both lists — Amazon, UPS, Colgate-Palmolive and Google parent company Alphabet. The top 10 purpose-driven companies, according to those consumers surveyed, are:
- Community Health Systems
- Johnson & Johnson
- Cardinal Health
- Kraft Heinz
And the top 10 companies on the Reputation Index are:
“As we’ve seen repeatedly in 2018, corporate reputation is painstakingly curated, carefully protected and easily lost. When it comes to reputation scores, every point up or down matters to both the consumer and also affects long-term business performance and value,” says Justin Greeves, EVP of Global Research & Services at Porter Novelli. “The Purpose Premium is the extra reputational boost a company gains by leading with Purpose and edging out its competitors in a world where what a brand stands for increasingly matters to the consumer.”
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As Greeves explained via email, for the purpose of the survey, a “purpose-driven company” was defined as one that “helps to positively impact society and the world.” The 6,000 consumer respondents were provided a random list of 20 Fortune 200 firms at the start of the survey. Each respondent was then asked two qualifying questions to determine which firms they rated from the list: whether they were familiar with the firm, and whether they could give it a positive, neutral or negative rating. From there, respondents were asked to evaluate up to 6 firms remaining from their original list of 20.
“We did this in order to prevent the usual halo of name awareness – this helped to reduce bias from the list; that’s why you didn’t see the winners as all the usual suspects, since many firms who have the highest name recognition are often given higher ratings,” Greeves explained. “Our process seemed more fair to the entire Fortune 200 and surfaced several firms who are known by fewer Americans but are more highly perceived in the areas of purpose and reputation.”
Reputation driven by Quality, Vision and Purpose
To better understand reputation, the Index was aggregated into correspondent elements under three overarching dimensions: Quality, Vision and Purpose. Quality represented the largest portion of overall reputation, accounting for 65 percent; elements of the Quality dimension included reliability, security, trustworthiness and affordability. Vision accounted for 18 percent of reputation, under which consumers prioritized categories such as innovation, profitability and creativity.
Purpose is the final major dimension of reputation. Comprising 13 percent of a company’s overall reputation, the “Purpose Premium” can boost overall reputation to edge out competitors and build vital brand affinity among consumers.
Americans admire companies that act responsibly — and give back
What constitutes “Purpose” was derived, through factor analysis and regression analysis, as a basket of elements determined to be of utmost importance to respondents when assessing a company’s reputation. Turns out, US consumers prioritize companies that are:
- Responsible (86 percent)
- Caring (85 percent)
- Advocates for issues (81 percent)
- Environmental stewards (79 percent)
- Philanthropic (73 percent)
“Purpose itself is a multifaceted concept in the eyes of Americans,” says Alison DaSilva, EVP of Purpose and CSR at Cone, a Porter Novelli company. “As we peel back the onion, we see consumers first expect companies to operate responsibly. However, they also want to know that companies truly care — and this means advocating for issues that are important to them, as well as supporting social and environmental causes.”
Americans more engaged, more willing to try purpose-driven brands
Not only do US consumers think well of purpose-driven companies, they are willing to reward them in a number of ways: For companies with a higher Purpose ranking compared to their laggard peers, consumers say they are:
- 1/3 more likely to try a new product/service
- 50 percent more likely to switch to a new product offered
- 50 percent more likely to support a move of that company into their community
Purpose leaders will also benefit by cultivating more engaged audiences. Consumers are significantly more likely to consume content from companies with higher Purpose rankings. They are:
- Nearly twice as likely to have read social media posts from higher Purpose-ranked companies
- Two times more likely to have read or skimmed their annual report
- More than two times more likely to have read or skimmed their sustainability report
“We see from these findings that Purpose is a way of communicating shared values with stakeholders and getting a business benefit at the same time. A company is not just judged by what it makes or how much it makes, but also by how it conducts itself in our society,” Greeves says. “We intuitively knew this, but now we can demonstrate its true impact and show companies how to lead the way on the many dimensions that matter.”