Consumers are increasingly demanding that the brands they do business with take stands on societal and cultural issues and get more involved in improving their communities—and this new sense of involvement and opinion has become a major factor in brand reputation. Companies that successfully embrace these ideals are said to have purpose—and not only do Americans think well of purpose-driven companies, they are also willing to reward them in a number of ways.
According to new research from a pair of comms giants, purpose is one of three critical dimensions of overall reputation. This important new study from Porter Novelli and Cone examines consumer perceptions of the top 200 companies in the U.S., and also finds purpose and reputation are intrinsically linked.
The 2018 Porter Novelli/Cone Purpose Premium Index: How Companies Can Unlock Reputational Gains by Leading with Purpose reveals there is a strong correlation between purpose and reputation as these scores moved together for nearly nine out of every 10 companies (88 percent) ranked. In fact, of the top 10 leaders named on both the purpose and reputation lists, four companies landed on both lists—Amazon, UPS, Colgate-Palmolive and Alphabet.
“As we’ve seen repeatedly in 2018, corporate reputation is painstakingly curated, carefully protected and easily lost. When it comes to reputation scores, every point up or down matters to both the consumer and also affects long-term business performance and value,” said Justin Greeves, executive vice president of Global Research & Services at Porter Novelli, in a news release. “The Purpose Premium is the extra reputational boost a company gains by leading with purpose and edging out its competitors in a world where what a brand stands for increasingly matters to the consumer.”
Reputation driven by quality, vision and purpose
To better understand reputation, the Index was aggregated into correspondent elements under three overarching dimensions: quality, vision and purpose. Quality represented the largest portion of overall reputation, accounting for 65 percent. Elements of the quality dimension included reliability, security, trustworthiness and affordability. Vision accounted for 18 percent of reputation, under which consumers prioritized categories such as innovation, profitability and creativity.
Purpose is the final major dimension of reputation. Comprising 13 percent of a company’s overall reputation, the Purpose Premium can boost overall reputation to edge out competitors and build vital brand affinity among consumers.
Americans believe it’s important for companies to act responsibly—and give back
Consumers want companies to act, care and advocate. When it comes to what purpose attributes are most important to reputation, Americans prioritize companies that are:
- Responsible (86 percent)
- Caring (85 percent)
- Advocates for issues (81 percent)
- Environmental stewards (79 percent)
- Philanthropic (73 percent)
“Purpose itself is a multifaceted concept in the eyes of Americans,” said Alison DaSilva, executive vice president of Purpose and CSR at Cone, a Porter Novelli company, in the release. “As we peel back the onion, we see consumers first expect companies to operate responsibly. However, they also want to know that companies truly care—and this means advocating for issues that are important to them, as well as supporting social and environmental causes.”
Americans more engaged, more willing to try purpose-driven brands
Companies with a higher purpose ranking compared to their laggard peers will reap greater benefits, as consumers are:
- 1/3 more likely to try a new product/service
- 50 percent more likely to switch to a new product offered
- 50 percent more likely to support a move of that company into their community
Purpose leaders will also benefit by cultivating more engaged audiences. Consumers are significantly more likely to consume content from companies with higher purpose rankings. They are:
- Nearly twice as likely to have read social media posts from higher purpose-ranked companies
- Two times more likely to have read or skimmed their annual report
- More than two times more likely to have read or skimmed their sustainability report
“We see from these findings that purpose is a way of communicating shared values with stakeholders and getting a business benefit at the same time. A company is not just judged by what it makes or how much it makes, but also by how it conducts itself in our society,” said Greeves. “We intuitively knew this but now we can demonstrate its true impact and show companies how to lead the way on the many dimensions that matter.”
The 2018 Porter Novelli/Cone Purpose Premium Index presents the findings of an online survey designed and executed in July 2018 among an online sample of 6,000 Americans, including 2,929 men and 3,071 women, ages 18+. The study was fielded by Critical Mix and the data are weighted in aggregate by age, region, income, gender and ethnicity to be nationally representative. The margin of error associated with the total sample is ± 1.27 at a 95% level of confidence. The sampling of America’s top 200 companies is based upon the Fortune 200 list, compiled annually by Forbes Magazine.