Anybody who doubts that reputation matters should take note of a survey in July that revealed a massive 81% of the Opinion Leader Panel agreed that “reputation is one of the strongest drivers of market value for a company”.
Reputation is based on three simple things – what you say, what you do and what others say about you. Strong, resilient reputations exist when these three things correlate.
We know from research that personal experience is the strongest driver of reputation – you are most likely to be an advocate when you have clear, personal stories to share. That’s why customer experience is the most important driver of reputation.
Over the past six months we have seen marked changes in opinion leaders’ perceptions of what really matters in today’s turbulent market. The way you behave with your customers is of paramount importance, suggesting that what you do is the lead driver of reputation. We call this “customer compact” – an informed and overt commitment to your customers.
To be successful you need to “walk in your customers’ shoes” understand them more than ever, be in tune with their mood, demonstrate they are your king and that you will bow down before them every day.
In these turbulent times we know that consumers are fearful about their jobs, homes and futures. The economy tops the “issues of concern” on every published opinion poll and people are more likely to talk about the economy as their biggest worry than they were even back in 1992. In this environment, consumers are looking for brands and organisations that are completely in tune with their current needs and can help them make, and be seen to make, “smart choices”.
A recent study of 100 members of the Opinion Leader Panel, drawn from politics and government, business, the City, non-governmental organisations and the media highlighted that truly understanding and connecting with your customers has never been more important.
Organisations that will prosper help their customers through today’s difficult times while also innovating for the future. Consumers will be different after this economic crisis, and research and innovation needs to focus on understanding the needs of a new, more aware, more risk averse consumer. One who might, for example, be prepared to haggle, knowing that the first price is not the last price.
In spite of the current economic challenges, opinion leaders believe that there is a lot to play for. Nothing is sacred and we could see some of our most iconic businesses fail over the next couple of years. But we can also see the opportunity for some strong winners.
Focused investment is essential for future success. When we asked opinion leaders to choose between alternative strategic options for managing in a recession, the picture was clear.
They plan to:
– Invest for the long term, accepting short-term profit sacrifice rather than tactically cutting costs;
– Invest to build competitive differential rather than reducing marketing spend;
– Fast track innovation projects rather than postponing them;
– Prioritise research to get close to the customer rather than tracking in the wider market.
Customer closeness is most immediately recognised through communications and actions that are empathetic and authentic. Tesco is getting this right, demonstrating deep understanding of the nation’s fears through underpinning “Every little helps” with “The country’s biggest discounter”. The demonstration of “everyday value today and tomorrow” offers a compelling consumer message well suited to the times. Indeed, 75% of the Opinion Leader Panel think Tesco will be a winner in the next two years.
In contrast, while opinion leaders admire Marks & Spencer and rate the brand very highly on favourability, trust and advocacy, there is less optimism about its future – 21% believe that M&S could be struggling or gone in two years, with 28% believing the retailer will be thriving or winning.
Opinion leaders rationally respect M&S, but emotionally is it demonstrating sufficient customer closeness in such difficult times?The likes of “20% off” discount days and “Dine in for 10” recognise the need for short-term added value, but where is the need for everyday value? Was the latest M&S Christmas advertising that painted a romantic, idealised picture of Christmas jarring in its level of escapism?On the other hand, Tesco has demonstrated that its focus on “customer first” is in tune with today’s consumer who is worrying more about value for money than corporate social responsibility.
To be successful, brands must establish a new pact with their customers demonstrating responsiveness to customers’ needs and beliefs, “thanking” them for their custom and committing to creating distinctive brands that will meet customers’ future needs and demands.
Viki Cooke, co-founder and chair of Opinion Leader, contributed to this week’s Trends Insight