360DigitalInfluence

Michael Hatcliffe
Managing Director, US Corporate Practice
Ogilvy Public Relations Worldwide

I spent the latter half of last week in New Orleans for the Reputation Institute’s 15^th annual conference, Navigating the Reputation Economy.  It was a fascinating few days and I wanted to share the highlights of the insightful concepts discussed at the conference.

1. Reputation has never mattered more. Research was presented that suggests 60% of purchase decisions are based on the perception of the enterprise rather than the features of the product. Cisco said that 25 years ago, Chief Reputation Officers did not exist - the stakeholder society and the internet has made reputation a paramount business concept.
2. Brand and Reputation really are different. I liked what Sprint said: You can create and control your own brand; reputation is what you earn, it’s what you get from others. Cisco had another variation: You own your brand, you earn your reputation.
3. Reputation is an inside-out process. A regular theme among the most impressive companies (FedEx, Pfizer among them) was that you have to win first with your employees before you can win with customers and external stakeholders. Managing your reputation starts with your most valued asset - your people.
4. Reputation derives from the character of the company. Great stories from Honeywell, Xerox and Kodak on how they turned their reputations around - and they did so by going back to the heritage and values that had been important when their companies were  being built. It’s also what Toyota is doing to rebuild its Reputation (’The Toyota Way’). Honeywell said there are 5 principles of character-based communications: Integrity, Performance, Relevance, Accessibility and Clarity/Consistency.
5. Management of reputation does not only happen within Corporate Communications. If management of reputation is seen purely as a PR function, then it is largely ineffective. The companies who treat it seriously have it as a core business mandate, with the CEO personally tracking it (Sprint CEO Dan Hesse told us it is one of his 3 priorities).
6. Reputation should be a consideration in every business decision. Allstate admitted that it only took reputation seriously after it was hammered post-Hurricane Katrina for the way it handled policy claims. Now they have “Conscious Choice” meetings with all internal stakeholders to explore the ramifications of business decisions on consumers, regulators and other stakeholders.
7. Sadly, you learn most about your reputation when it’s being attacked. Toyota’s Jim Wiseman gave a fascinating and candid “lessons learned” presentation about its troubles over the past 18 months - “We never considered reputation crucial until the bottom fell out,” he said.  Before the problems, Toyota didn’t even have a way of communicating with all its employees - the many affiliates did their own thing. He had his own Top Ten list of lessons - I liked “Understand Politics and Fight Back” and “Swallow Your Pride and Communicate with Legal”.

As a practitioner of green PR and marketing, I spend hours every week walking the fine line between sincere promotion of sustainable corporate ideals and the murky waters of corporate “greenwashing” – the general term to describe the practice of promoting disingenuous information to support the guise of an eco-friendly public image. Accordingly, being accused of greenwashing is a constant concern of mine, apparently for good reason.

In fact, a recent study found that 98 percent of products make claims that are greenwashed. While some may dismiss the label of “greenwashing” as a casualty of green PR and marketing, the damage caused to any organization found guilty of the practice can be severe. Consider just three of the six main greenwashing risks, as outlined by OgilvyEarth’s greenwashing guide:

• Reputational Damage: Companies that greenwash risk their credibility within their industries and with consumers. Skepticism is a growing trend and ideal in our society, and people don’t hesitate to pick up on and alert others to anything they feel is insincere. Rebounding from a blow to one’s reputation is one of the hardest tasks a company can face.
• Consumer Alienation: More than 50 percent of climate-savvy consumers believe brands’ sustainability-related claims are embellished or fabricated. With so many other options for eco-friendly products, skeptical buyers will be the first to walk away if they find a reason to believe a company is greenwashing.
• Leadership Opportunity Cost: There is a $200 billion market in the U.S. for eco-friendly oriented products. Additionally, 38 percent of eco-minded consumers make an effort to purchase goods and services from socially-responsible companies, meaning there is huge potential for failure for businesses that choose to greenwash. But, there is also potential for success among those willing to lead the charge in genuine environmental efforts.

Many organizations, no matter how sincere their reasons for taking on corporate sustainability, run the risk of greenwashing. But to avoid being crowned with this notorious title, be honest about your environmental efforts and communicate your plans for reaching sustainability goals. Celebrate your accomplishments, but don’t embellish them – consumers will see straight through the hype. Take immediate action if concerns arise about your sustainability practices, that way you won’t give anyone a reason to believe you have something to hide. Lastly, always maintain your relationships in the industry and with media – this will only help to fortify your reputation and give you credibility when and where you need it.

Click here to download OgilvyEarth’s From Greenwash To Great: A Guide To Great Green Marketing (without the Greenwash).

Is she nuts? Social Responsibility costs money, and that was cut long ago. I know that’s what many of you are thinking. Hear me out. I think the planets are aligning to give companies more courage and motivation to align themselves with social causes. Here’s why:

1. Give the People What They Want. The data is everywhere: regardless of age or country of origin, people want to help people and they prefer brands that help people. Pretty simple stuff. But the numbers that support this thinking are encouraging and I think a little surprising. In the Pew Research Center’s Millennials study released last month, there is an interesting statistic that 21% of Millennials say that helping people who are in need is one of the most important things in their life - more important to them in fact than owning a home or being successful in a high paying career. Will their views change as they age and become less idealistic? I wonder.  A December 2009 Yankelovich study showed 69% of consumers say that when a company donates to or does something for school or community, they think its right to buy things from that company as often as possible - a 10% jump in that answer from 2005. During this recession, consumers may not be giving as much money, but they certainly are giving their time. And they seem to be responding favorably to brands that give both.

2. Social is as Social Does. Social media has absolutely changed the relationship between brand and consumer, giving them more direct lines of communication. But as the medium starts to mature, or we as marketers get more experience in working in it, it seems that some corporate-driven initiatives that have an investment tie to social causes receive a stronger, more lasting embrace by their online communities. Think Coke’s investment in the Heart Truth to raise awareness for women and heart disease.  The take-away? Most every brand steward not living under a rock is looking for a way to engage stakeholders and influencers via social media. B2C or B2B. The challenge is finding an idea or campaign that isn’t fleeting and has enough interest and appeal to be embraced by those online communities. So partnerships with social causes seem like a very authentic way to reach people around issues they are already passionate about with something they’ll really appreciate from a brand; putting money and effort where its brand mouth is.

3. As the Big Brands Go, Others Will Follow. Smart marketers have already identified this cultural desire for individuals and companies to be more involved in their community and pay it forward. President Obama has called for increased volunteerism. Pepsi has harnessed this desire to help others though their Pepsi Refresh campaign. At (client) Intel’s January launch of its Core processors, the company decided to partner with soccer powerhouse Mia Hamm. As part of Intel’s launch with Mia, the company made a donation to the Mia Hamm Foundation, which Mia created to raise funds and awareness for families needing marrow or cord blood transplants, and to foster opportunities for young women in sports.

I bet we’re only seeing the first set of waves on these kinds of campaigns. And I think that’s a good thing.

What do you think?

Can corporate initiatives (funding & resources) and programs for the social good co-exist without the “eeeew” factor?

When it comes to analysis on how well these programs help the bottom line, if all buying criteria are equal, could the consumer sentiment model hold true for B2B purchases and tip the scales towards socially-conscious corporations?

Is there a happy intersection of doing good and for-profit endeavors?

Boy I hope so. Earth Day’s just over a month away. Any campaign ideas on the whiteboard that could do some earthly good?