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The notion of operating as a ‘good’ business – moral, ethical and sustainable – has always been appealing to brand leaders, but more often than not a company’s profit margins and commitments to delivering shareholder value get in the way of them standing by their convictions. Now, though, the decision to run your business in a way that consumers perceive to be good may no longer be optional.
New research seen exclusively by Marketing Week reveals that, thanks to a general erosion of trust in big business, consumers are placing increased importance on businesses being good, meaning it could be time for brands to put it back at the top of the agenda. It shows that brands including Volkswagen, Weetabix and Samsung are rated highly, according to 3,500 people surveyed. People were asked to rate brands on three ‘good’ measures, their actions engagement and whether they would recommend them.
According to Sir Stuart Rose, chairman of Ocado and former executive chairman of Marks & Spencer : “Boardroom attitudes towards corporate social responsibility have changed quite dramatically in the past two or three years. Boards are on a learning curve. You have to be responsible in business.”
Rose was speaking at an event organised by The Good Relations Group to launch the research, which it commissioned from sister company Chime Insight & Engagement (CIE).
Brands recently caught up in a spate of negative media stories are learning the hard way about consumers’ growing scrutiny. In January, grocery retailers including Tesco and Aldi were on the receiving end of a major consumer backlash after a number of products sold on their shelves as beef were found to contain horsemeat.
For Tesco, the most high-profile of the retailers affected, sales have seen a very real impact in the months since the horsemeat revelations. The supermarket reported a 1 per cent drop in sales from stores open for a year or more in the 13 weeks to 25 May. Tesco’s share of the grocery sector also fell from 30.7 per cent to 30.1 per cent in the three months to 7 July compared to the same period a year ago, according to the latest Kantar Worldpanel data. Meanwhile Aldi – rated by consumers in this research as good on all three measures – has maintained its market share in spite of the scandal.
“Part of the problem is that as a society we are all buying and consuming more than we need. I persuade you to buy more hamburgers because I get judged on how many hamburgers I sold last year, and then the next year I’ve got to sell more,” says Rose.
“In reality, what we’ve got to do is educate people. The bit that’s missing is helping people to understand that you cannot sell four hamburgers for 20p without there being something less than real in there.”
According to an investigation by news agency Reuters in October 2012, up to that point Starbucks had paid only £8.6m in UK corporation tax since launching here in 1998 and had paid none since 2009. Although the brand had done nothing illegal, in the present economic climate and with politicians assuring the public that ‘we’re all in this together’, Starbuck’s behaviour was not in line with customer expectations and had a detrimental effect on its reputation – an analysis confirmed by data from YouGov’s BrandIndex research tool.
Bowing to consumer pressure, in June 2013 Starbucks paid over £5m in tax to HM Revenue and Customs. “We need to do more to maintain and further build public trust,” the coffee company said.
Aviva chief marketing officer Amanda Mackenzie also recognises the importance of operating a business in a way that is in line with consumer expectations but that doing the right thing can be hard to gauge. “When you’re struggling with a ‘where do we draw the line?’ kind of conversation, it sometimes has to be less about staying within the letter of the law or the rules and more about what feels right and wrong,” she says.
“As leaders there are certain decisions that are absolute and others that are relative,” Mackenzie adds. “The absolute ones are comparatively easy. It is the relative ones that are more difficult to gauge and those conversations are important to have”.
As consumers place more emphasis on companies’ actions and core values, it appears brands must shift the focus of their performance measurements to include reputation as much as profit if they’re to maintain a good relationship with the public.
The Good Relations research asked 3,500 consumers to rate brands they were familiar with, based on their ability to do good (good actions), their relationship with them (good engagement) and whether they would recommend them to others (good recommendations).
The brands that perform best across all three categories are given what the report calls a Triple G rating (see methodology, below). Only 20 of the 100 brands rated achieve a top ranking across all three criteria, highlighting the number of brands that need to work on both the good things they do and how they communicate them to consumers.
Unlike similar surveys, such as the FTSE4Good Index, which helps people to make ethical investment choices, Triple G isn’t an audit of good business practice. Instead it assesses the consumer view of whether or not a business is deemed to be doing the right thing, even when no one is looking.
Sandwich brand Subway scores highly with consumers across all three criteria. It was also a top riser in research company Millward Brown’s BrandZ rankings this year , which measures brand value. Subway UK head of marketing Manaaz Akhtar says the brand’s focus on health and value has no doubt contributed to this positive feedback from consumers.
“We’ve taken a holistic approach, particularly on health. Not only is it being responsible around the ingredients we have and the ‘subs’ on our menu, and making sure we look at ways to evolve our menus to give healthy options and value, we’ve been working with the Government as well.
“We are the only quick service restaurant to have signed up to all four of the pledges in the UK Government’s Responsibility Deal [to reduce salt, eliminate artificial trans fats, display calorie information on menu boards and reduce calories].”
Meanwhile, Pets at Home chief executive Nick Wood says the brand’s dedication to improve its employee engagement has contributed to achieving a Triple G rating. “There’s a culture of colleagues being listened to and engaged. The more engaged store teams are, the more satisfied customers are and the more sales there are,” he says.
Caroline Bates, director of CIE, which conducted the Good Relations research, agrees. “Pets at Home is well trusted and its employees are seen as open and honest, and this has led people to believe the company operates in a similar way.”
“Brands encountered frequently do perform better because people feel more familiarity and know more about those types of brands,” says Bates. “With FMCG, it’s the stuff in your fridge or your home. In retail, quite often, you have an experience in that store once a week.”
“For me, good actions are the most important ‘G’ in the Triple G research,” explains Fiona Dawson, president of Mars UK, another Triple G brand.
Consumers feel that just over a fifth of the brands surveyed would do the right thing, even when no one is looking.
“Take the recent issues faced by the food industry on horsemeat. It demonstrated that the actions and decisions taken during the incident caused as much damage as the actions that caused the incident itself. I believe good intent followed up by good action builds the trust of your employees, and fundamentally your consumers as well,” Dawson adds.
Although not a Triple G brand, M&S is rated highly by consumers for its good actions. People are aware of its long-term Plan A commitments, which aim to make it the world’s most sustainable major retailer, says CIE’s Bates. She adds: ”It’s not seen as something that’s marketing greenwash, it’s seen as core to what M&S does.”
Meanwhile, just over a fifth of the 100 brands are given a top rating for good engagement – creating positive brand warmth through products, services and communication. Samsung, for example, is lauded by consumers for its customer service and user-friendly products that consider customer needs.
And consumers are also willing to give a good recommendation for half the brands surveyed. Although not a Triple G brand, Amazon performs very well on this measure. Despite the recent furore over its payment of corporation tax, its customer service and range of products have ensured that this has had minimal impact on consumer perception.
In contrast, consumers are seeing little good in the financial services sector, according to the research. “It’s very difficult for brands in this sector to score well on these three measures,” says Bates. “They are not strongly trusted, therefore not strongly recommended and they don’t have strong engagement. They are also rarely believed to be doing things for the greater good.”
Boardroom attitudes towards corporate social responsibility have changed dramatically in the past two or three years
Only one brand, PayPal, bucks the trend. “PayPal does particularly well at being seen as a customer champion. It’s a trusted brand in a scary place – buying online. It’s seen as a facilitator of consumer safety and it’s seen to have always delivered on that. It’s pretty seamless, it’s used a lot and it’s very visible to people shopping online.”
No media brand achieved Triple G status and Guardian Media Group was the only brand to achieve two Gs. “For the people who use this brand’s products, it is incredibly strong. If it had stronger awareness and engagement against a bigger audience, it would have achieved Triple G,” says Bates, who notes that recent scandals at the BBC and News UK (formerly News International) have no doubt contributed to the comparatively low scores.
There are some notable names missing from Good Relations’ ranking of the top ‘good’ brands. Marketing Week Engage Awards Brand of the Year Sainsbury’s , which sponsored 2012’s Paralympic Games and whose 20×20 Sustainability Plan places huge emphasis on building sustainable supply chains, is not seen by consumers as performing well enough across all three touchpoints to earn it a Triple G rating.
Likewise Unilever , whose Sustainable Living Plan aims to double the size of the business while reducing its environmental impact, does not appear in the top tier.
Bates argues that this is down to their low engagement scores – consumers are not fully aware of the good they are doing and the companies need to do more to communicate their work.
“There are a lot of brands in the index that clearly do a lot of really good things but it’s not cutting through, part of which is because engagement is weak,” says Bates. “If you don’t have that sense of engagement in the first instance, it’s hard to get some of your good deeds understood by the British public.”
Good Relations chairman Kevin Murray says: “It all comes down to the way brands engage and communicate with their consumers, which then makes them more aware of what good they are doing and therefore more inclined to be loyal to those brands.”
However, he warns that trumpeting your good actions may also make people cynical and suspicious. “You have to find inventive ways for educating and engaging and involving people in what it is you’re trying to do.”
He also says ensuring consumers see your brand as a force for good is more important than ever in building long-term trust and loyalty: “Doing good isn’t about philanthropy, it’s about mutual self-interest. In order to thrive in the future, businesses need to make sure that the societies and environments in which they’re operating in are thriving as well. Therefore, this idea of ‘good’ becomes of critical importance to businesses going forward.”
Triple G is a rating system that aims to indicate the future success and sustainability of a brand. The Good Relations Group commissioned sister company Chime Insight & Engagement to survey 3,500 people, asking them in detail about brands which they are familiar with. For holding companies, CIE gave a description of the company to consumers, which included brands in their stables. For example, with Diageo, researchers explained that it is the maker of Johnnie Walker, Smirnoff and Baileys.
The results provide a picture of which brands are strong on three elements – good action, good recommendation and good engagement, and which were not, and why.
The second stage of the research was crowd validation. Five-hundred people were shown the results and asked if they agreed or disagreed with them. People had the option to move a brand into or out of obtaining a G rating across any of the three criteria.
The aim is to give a thorough view of how the UK public at large consider this broad spectrum of brands operating in a variety of sectors.