UK companies struggle to manage their reputation in their home market

UK companies are struggling to manage their reputation on their home turf. This is according to a new report published by the Reputation Institute today that is based on more than 50,000 ratings collected in the first quarter of 2016 from members of the UK general public.

The Reputation Institute mix academic vigor with a real-world understanding to measure a company’s ability to deliver on stakeholder expectations based on the seven key rational dimensions of reputation: products and services, innovation, workplace, governance, citizenship, leadership, and performance.

This enables them to rank on a score from 0–100, based on overall reputation and grouped into categories:

  • Excellent (80+)
  • Strong (70–79)
  • Average (60–69)
  • Weak (40–59)
  • Poor (Below 40)

This has revealed UK Plcs are losing out on reputation in their home market. Only two of the top 10 companies are UK Plcs, and international companies dominate the top 50. Home-domiciled companies make up just 26% of the top 50 and 41% of the top 150.

As shown below, only four UK companies have been able to build an “Excellent” reputation with a RepTrak® score above 80.

5. Rolls Royce Aerospace (82.6)
6. Aston Martin (82.1)
13. ASOS (80.4)
14. Jaguar Land Rover (80.4)

At the other end of the scale, of the 27 companies who scored “Poor” and sit well outside of the RepTrak® 150 (ranking 251 and below), all but two are UK and Irish companies.

UK companies ranked “Poor” include five utilities and financial services companies, three transport companies, and two gambling and telecom companies. Although it might be unsurprising that UK companies from these sectors perform the worst, there are notable exceptions.

Nationwide Building Society was the top scoring of all UK retail banks, with a “Strong” score of 72.4. O2 also rated strongly in the eyes of the UK general public at 74.9, whereas all other UK telecoms providers failed to score higher than an “Average” performance of 64.

Biggest moves

The following companies have seen the largest improvements from 2015 to 2016:

58. Airbus Group (+12.6 points)
228. HSBC (+9.8 points)
9. Aldi (+9.7 points)
48. Burberry (+9.7 points)
140. Hershey Company (+8.9 points)

The below businesses have seen the largest declines from 2015 to 2016:

267. Volkswagen (-27.4 points)
192. SABMiller (7.9 points)
156. Nestle (-7.7 points)
163. Admiral (-7.3 points)
247. EDF Energy (-7.1 points)

Unsurprisingly, Volkswagen AG falls from having a top 10 reputation (ranked 8th) in 2015 to a vulnerable position in 2016 (ranked 267th) following the high-profile emissions scandal. The critical factor in this loss of reputation has been a huge drop in the number of consumers willing to support the company in specific circumstances, as shown below.

Recommend companyBuy productsGive benefit of doubt201624%28%20%201556%58%53%
Recommendation and trust of Volkswagen AG has decreased by more than half during this time, which underscores the impact that corporate reputation has on the business.

Why reputation matters

Reputation Institute’s research reveals that reputation drives business results. The better the reputation, the more support a company gets. For companies with an average reputation, only 12% would definitely buy the products; this climbs to 28% if the reputation is strong, but increases to 76% if the reputation is excellent.

“The impact from reputation on the business is massive, which is why the leading companies in the world are managing this asset in a systematic way,” says Nielsen.

In the UK, consumers must consider companies’ reputations “Excellent” in order to have more than 50% of those surveyed claim that they would say something positive about a company, recommend its products, trust it to do the right thing, welcome it into the local community, and work for or invest in it.

Reputation Institute, ranking

The Lego Group, IKEA and BMW Group top the UK RepTrak® 150 ranking of the most reputable companies among the UK general public, Reputation Institute announced today, based on more than 50,000 ratings collected in the first quarter of 2016 from members of the UK general public.

Disclaimer: I work with the Reputation Institute at Lansons but I had full editorial independence when writing this article.

What do you think?