July 2005

Buttress Your Benchmarking Efforts

by Matthew Merlin

A smart company understands that a favorable reputation improves its bottom line. It also understands that the only way to effectively manage reputation is to measure it through benchmarking and other methods, then use the results to make improvements. From a PR perspective, a strong reputation acts as good will, giving you the benefit of the doubt with both journalists and the general public.

To find out how strong your company’s reputation is, it is helpful to compare it with the reputations of other companies, also known as benchmarking. While survey data that compares several companies’ reputations is a solid benchmark, tracking the media’s coverage of those same companies adds benefits that can’t be achieved with surveying alone.

The Origins of Reputation

Reputation is the sum of people’s opinions, developed through experiences over a long period of time. These experiences are made up of direct contact with an organization, such as with a helpful clerk at a checkout aisle, or indirect contact, such as with a television news segment praising a company’s response to an emergency. In his recent book, Blink: The Power of Thinking Without Thinking, Malcolm Gladwell describes the human brain as a giant computer, constantly processing information on a subconscious level and shaping our beliefs and attitudes, whether or not we are cognizant of the process. Our minds are continually tabulating interactions as we develop opinions about companies through direct and indirect means. 

Reputation Benchmarking

Although we don’t have the capability to measure each person’s subconscious opinions, we do have indices that gauge compiled opinions to assess a company’s collective reputation. Some indices, such as Fortune magazine’s Most Admired Companies, survey business executives. Others, such as Landor’s ImagePower brands survey and the Harris-Fombrun Reputation Quotient study by Harris Interactive Inc. and the Reputation Institute, measure the general public’s opinions through surveys. The Reputation Quotient study breaks down its measurements into six dimensions, including social responsibility, workplace environment, and vision and leadership, while Fortune’s index uses eight key attributes. Custom studies are also widely available. However, because these studies are usually only conducted once a year, top-line reputation surveying is subject to sudden jolts in public opinion that may happen to occur near the time of the survey. 

By listing a company’s ranking on a chart, we can benchmark its data against its competitors’, resulting in a measure of that company’s reputation against others in the same industry. For example, in a list of companies from the retail sector, Target’s ranking has been rising while Wal-Mart’s has been falling (Chart 1). These results encompass every experience a stakeholder has with a company, whether that person is a customer, employee or investor. Every department within a company—not just communication and branding—has an impact on these consumer beliefs, whether it’s the customer service department, human resources or research and development. Advancing a company’s standing in subsequent surveys involves intense, long-term, corporation-wide collaboration.         

Chart 1 – Trends in overall reputation can be assessed by charting results of these companies over time, delivering a valuable benchmark.  

Media Measurement Benchmarking

The media greatly influence public opinion, as our news-saturated population constantly absorbs tidbits of information that shape its beliefs. Ongoing measurement of the media’s portrayal of your company’s tone, image and messages can add to your understanding of reputation in areas where intermittent surveying falls short. Media measurement allows a company a first glimpse at whether outreach to stakeholders is working.

Good media measurement data is compiled several times throughout the year and can indicate changes not just in your company’s reputation, but also its reputation in comparison to its peers. At all the points of communication between a company and its stakeholders, the media are extremely important because they both decide which news is covered and how, and also rapidly distribute it. Furthermore, information from media measurement is easier to act on than a simple corporate reputation ranking. A communication department is better able to use media information to affect rapid change, for example by pitching articles to publications that tend to give better coverage of the issue at hand to the competition.

One such measure of media is the Delahaye Index, which continually tracks large, U.S.-based companies and their media coverage and reports results on a quarterly basis. The index is adept at providing statistics on the quantity and quality of news coverage by showing long-term benchmarking charts for tone and overall rank.

One of the companies whose news coverage has continually improved in the past several years is Verizon (Chart 2). Even before AT&T was acquired by rival SBC, Verizon officially became the new telecommunications bellwether when it was listed on the Dow Jones Industrial Average. Verizon’s overall reputation score has also been rising in the past few years, assisted by the company’s increased visibility as a consistent leader in an industry where mergers and acquisitions have dominated the headlines. The results of this increased attention may not be fully evident in survey-based measures for some time. But by assessing media coverage, communications professionals receive quick confirmation that their efforts are working and are on the path to yielding longer-term results.

Chart 2 - All three companies improved their scores from 2002 to 2004 on both indices, confirming that their reputation’s strength is increasing.  

Also in recent years, major corporations Boeing and Citigroup have recovered from difficult periods—Boeing from an air-refueling tankers scandal that caused its CEO to resign, and Citigroup from a large securities-related settlement. When companies experience increases in their media measurement and overall reputation scores, as is the case with Boeing and Citigroup, they receive validation that their reputation is improving.

To supplement measurement of overall reputation and media attention, you can go a step further by employing other measurement tools, like journalist audits and surveys of consumer and employee satisfaction. Only with a full array of measurements can you identify the drivers that change overall reputation.

A complete, corporation-wide reputation program can give a company the means to shape its stakeholders’ beliefs and attitudes. While an overall survey presents a relative indicator of a company’s reputation, guidance from a media measurement program acts as a tool to improve these results.

Matthew Merlin is a director at Delahaye, a division of Bacon’s Information. He can be reached at mmerlin@delahaye.com.