Click here to order the January 2014 issue in which this article appeared.
Direct sellers have been engaged in social marketing for generations, but the relevance of having your mission, vision and values front and center in everything you do has never been more important than in today’s age of Internet-enabled consumers and unbridled social media, activist investors and short-sellers. At the same time, since the 2008-2009 global financial crisis, perceptions of an organization (why you exist and how you behave) matter more than perceptions of your product/services (what you do). In fact, these corporate perceptions now explain over half of consumer recommendation behavior towards companies in general and even more for direct sellers—58 percent, in fact, here in the U.S. (from Reputation Institute’s annual global corporate reputation study).
Direct sellers are well-positioned to take advantage of this “reputation economy,” by telling a holistic story that blends company purpose with product features and benefits. In today’s world, where what you stand for can be a source of competitive advantage, the time has come for the direct selling industry—individually and collectively—to embrace active reputation management.
Reputation 101
Humans form perceptions about organizations through three primary experience points: direct experiences with an organization, what an organization says about itself, its products or services, and third-party opinions (think traditional and social media). Based on that individual’s exposure to those various touchpoints, advanced analytics can now quantify the emotional connection (the degree of trust, admiration, esteem and good feeling) as well as the rational drivers of an organization’s reputation.
Across thousands of companies in dozens of industries and countries around the world, we have found that seven rational dimensions explain the “reputation pulse” of an organization:
- Products & Services
- Innovation
- Workplace
- Governance
- Citizenship
- Leadership
- Performance
Armed with this insight, we can also measure and predict the amount of supportive behavior an individual is capable of giving—or withholding from—an organization (think recommendation, saying something positive, investing in or giving the benefit of the doubt in a crisis). Ultimately, these reputation metrics and supportive behavior indicators can be used to cut through the complexity—enabling corporate leaders to match up the right message with the right channel, aimed at the right stakeholder group.
It’s hard to overstate the importance of changing the narrative and being more proactive in the public conversation. Think about Big Pharma or Big Oil for a minute. Do you think of either industry as home to innovative workplace culture or game-changing investments in STEM education? Thanks to years of third-party conversations around those toxic frames, the answer is probably no. But that has not stopped both industries from taking collective action—as well as forming individual corporate platforms around patient empowerment or energy self-sufficiency through shale gas—in ways that are starting to pay off in terms of preserving and even expanding their license to operate. This is defined as the ongoing approval of a project within a local community and among other stakeholders or the broad social acceptance of a company’s operations, which must be earned and maintained and cannot be purchased.
Finding Your Voice
Leading companies have invested in building their reputation management capability, but most organizations are still working to improve across four competency areas: business rationale (integrated company purpose, defined stakeholder ecosystem and leadership alignment); intelligence/strategy (systematic evaluation, priorities and success metrics, corporate reputation strategy, corporate narrative); management/accountability (collaboration and relevance, planning and simulation, cross-functional management and executive accountability); and integration (activation, embedding the corporate story across touchpoints, sustainable advocacy and transformational investments).
In the 2013 Annual Reputation Leaders study, 313 senior executives from 290 global companies told Reputation Institute that their top reputation priorities for the year ahead were:
- Differentiation: Product-driven campaigns are providing lower returns at higher costs. To avoid commoditization, how do we establish competitive positioning that’s based on the company’s purpose and values? How does an enhanced corporate narrative impact marketing and communications efforts?
- Integration: For an organization to succeed, reputation must be everyone’s responsibility. How do we make sure that all stakeholders are brought “into the room” when decisions are made?
- Growth: If customers—and the people who influence them—are making decisions based on perceptions of the company, what strengths can we leverage to impact go-to-market strategies and drive growth? How does this underleveraged insight help us decide where to invest scarce resources across messages, touchpoints and channels?
The good news for the direct selling industry is that you can benchmark yourselves against those leaders through a diagnostic tool that looks at your company’s reputation management landscape and focuses on ways of crystalizing corporate reputation and prioritizing importance. It is also helpful to “know before you go.” Taking a look at existing research and organizational capabilities with a reputation filter helps many organizations see the forest from the trees in building out a compelling corporate story.
|
We’ve learned throughout our nearly two decades of advising global organizations that every company finds itself somewhere along a 5-Phase Reputation Management Journey—whether Exploring reputation for the first time (Phase 1) or Integrating cross-stakeholder reputation insights into business-planning and enterprise strategy (Phase 5). (See infographic)
- Exploration and Business Rationale
- Management and Measurement Framework Development
- Business Planning Integration
- Cross-Functional Implementation and Accountability
- Full Integration into Long-term Strategy and Investments
To be fully prepared to navigate in today’s “reputation economy,” companies must harness a thorough understanding of their corporate ecosystems in order to drive behaviors that will lead to sustainable growth.
Once an organization understands the business rationale for active reputation management, it can move beyond playing defense and start playing to win with its reputation:
- Put points on the board through direct experiences (find ways to let them get to know you) and marketing channels that give all audiences a reason to believe that the whole of who you are is greater than the sum of the parts.
- Keep detractors at bay by preserving your license to operate through communication channels that present your side of the story in an authentic and credible voice.
- Use employee and distributor ambassadors to boost community engagement and benefit of the doubt, which in turn gets third-party conversations focused on the positive things direct selling has to offer.
Stand and Deliver
The art and science of corporate storytelling has real commercial implications for the direct selling industry, especially when sentiment on Main Street can be influenced by activist investor commentary from Wall Street. This is not a time for victimization—in fact, the best defense is often a good offense.
Over 50 years ago, President John F. Kennedy challenged the nation in a September 1962 speech at Rice University to accept the challenge of putting a man on the moon before the end of the 1960s. This was at a time when the Soviets were the clear leader in manned spaceflight:
“We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.”
Reputation management is not easy, but the direct selling industry is in a position to answer that challenge as one that they are willing to accept and one they are unwilling to postpone.
Anthony Johndrow is a Managing Partner at Reputation Institute, a member of the global leadership team, and responsible for the North American Advisory practice. Johndrow leads a team of consultants who help leading companies manage, measure, and strengthen relationships with their stakeholders. His experience has spanned the world as well as numerous industries, and he has spent the past 18 years in a combination of brand management, general management and corporate communications roles.
