Measuring the Value of Reputation

As I’ve mentioned in previous posts, APCO released the results of our inaugural Return on Reputation (“ROR”) Indicator study that focuses on the retail sector. The survey was conducted among nearly 10,000 respondents representing consumers, community activists, policy-makers, retail employers, and investors and analysts, and I’m excited to say that our analysis is complete. We found that addressing the key issues and expectations of stakeholders to improve reputation has a statistically significant impact in shaping the behavior of these stakeholder audiences – and that shapes the operating environment and leads to real business outcomes. 

Specifically, the ROR Indicator reveals that reputation increases consumer spending and loyalty, drives community support, improves the support of policy-makers on proposals favorable to the industry, helps the industry earn the benefit of the doubt when crises arise, engages employees in ways that help avoid high replacement costs and has a tangible effect on a company’s market capitalization. The data measures how reputation can: 

• Lead to greater spending by consumers
• Mobilize community activists to become your advocates
• Increase the level of support among policy-makers on the most important policy issues facing the industry
• Gain the benefit of the doubt among Americans when crises arise
• Enhance employee engagement and retention
• Maximize shareholder value and increase market value

In fact, for every one-point increase in the industry’s reputation:

• Annual spending by the average consumer increases by $133 per year
• An additional 94,600 community activists will actively and vocally advocate on behalf of the industry
• The proportion of policy-makers who support the industry on most policy proposals increases by nearly a percentage-point
• More than six million additional Americans are likely to give the industry the benefit of the doubt when crises arise
• More than half-million retail employees are most likely to remain on the job
• Market capitalization increases by 0.4 percent, on average

To see the complete results of the study, please visit apcoworldwide.com/reputation.