Reputation Winners and Losers.

Fewer than 9 percent of U.S. consumers recently surveyed by strategic brand and marketing consultancy Prophet believe companies have strong reputations, but those in the consumer packaged goods sectors all managed to earn the highest marks.

Not surprisingly, given the current economic climate and surrounding factors, the financial services and insurance sectors were the biggest reputation losers.

“Reputation matters – it’s a key aspect of a brand’s strength,” said Aneysha Pearce, an associate partner at Prophet who led the study. “And its influence over business performance makes it critical to closely manage.”

In its first U.S. Reputation Study, Prophet queried 4,300 consumers on how 130 leading businesses stacked up in terms of key measures of reputation, such as quality of products and services and the quality of
their delivery.

Findings led to the creation of Prophet’s Reputation Management Index: Businesses scoring 75 or greater on the index qualified as reputation leaders; those scoring under 50 earned failing marks.

Among those at the top of Prophet’s reputation ranking were Kellogg’s at the No. 1 spot (82.1), followed by Kraft Foods (80.5) and General Mills (80.4). Entertainment giant Walt Disney (80.0) also ranked high, as did UPS (78.2).

At the opposite end, AIG brought up the bottom of the list with a 30.8 ranking, though Fannie Mae, at 33.6, didn’t have much of an advantage. The automotive sector (Daimler Chrysler ranked at 48.3 and General Motors, 49.0) also ranked poorly.

Pearce pointed out that some companies managed to break free of their sectors’ reputation baggage. Toyota ranked 18th overall at 75.5 – a score 10 points above the auto industry average. And insurance giant USAA ranked 34th (72.2), five points higher than competitors like MetLife, Nationwide and Geico as consumers credited it with the highest quality products and services in the industry.

Over the past five years, Pearce said, companies with leading reputations outperformed the S&P average by 100 percent; their stock prices were 88 percent higher than average. “We also found that consumers are twice as likely to purchase products and four times as likely to recommend a product or service from a company with a stellar reputation,” she added.

“This shows how a good reputation can help companies stand out and excel in both good times and bad,” Pearce said. “The fact is that a good reputation isn’t a luxury. It’s a necessary investment in profitability.”

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http://www.prophet.com/downloads/whitepapers/Reputation%20Winners%20and%20Losers_vfinal.pdf>