A bad corporate reputation loses 1 in 5 customers
3rd September 2010
Ask any high school student and they will likely tell you reputation matters. But the importance of a good image doesn’t fade as time passes. In fact, a bad corporate reputation almost guarantees the loss of one in every five customers, according to a new study.
Overall, two-thirds of Canadians say corporate reputation significantly impacts their brand choice, the Bensimon Bryne Consumerology Report found.
A negative reputation puts sales to three-quarters of potential customers at risk and social responsibility in the business world resonates most with the boomer generation. Only 16% of Canadians under 30 say that a company’s reputation weighs heavily on their shopping patterns.
Female boomers in particular have high expectations of companies and place greater importance on the transparency of a company’s operations and crisis management, the Toronto-based advertising agency and its subsidiary Narrative Advocacy Media found.
Most importantly, a good company should handle a product problem or recall with transparency and accountability, with 80% of Canadians ranking this as the top measure of good corporate citizenship.
“In addition to learning definitively that corporate reputation matters to Canadians when it comes to brand choice, we saw that corporate social responsibility is especially essential to ensuring brand reputation in times of crisis,” said Amanda Alvaro, managing director of Narrative Advocacy Media.
Still, the study found that three-quarters of the population rank the offering of attractive products or services at good value the most important factor influencing buying decisions, before corporate social responsibility.
Other elements that matter to Canadians include whether the company creates local jobs and whether it’s a Canadian-owned business.
Other causes that have less awareness include: environment conservation in wilderness areas, organ donation, street safety and providing shelter and assistance for victims of domestic violence.
“Our data shows that corporate social responsibility is clearly a critical component of brand building, and also reveals that there is unchartered territory to engage in exceptional social responsibility initiatives that will resonate with the public,” Alvaro said.
The Bensimon Bryne Consumerology survey was conducted by the Gandalf Group, polling 1,500 Canadians. The questionnaire was conducted in French and English over the period of July 6-13 and yields a margin of error of /- 2.43% 19 times out of 20.