We live in a world where word of mouth is the No. 1 driver of sales and competitive advantage. And because there’s a strong correlation between a company’s reputation and consumers’ willingness to recommend it, businesses need to focus on building those strong bonds with stakeholders. Of course, a company should strive to earn the trust and esteem of consumers in its native land, but given that a multinational gets a majority of its revenue from international markets, it really needs to be liked everywhere else, too.
Building a top-notch reputation that spans the world isn’t easy. However, at least 100 well-regarded companies have successfully expanded their brands into the international marketplace by integrating reputation management into the way they do business.
Reputation Institute, a global private consulting firm based in New York, recently ranked 100 businesses that have successfully established strong international names for themselves. The firm invited approximately 47,000 consumers across 15 markets to participate in a study of those 100 most reputable companies, all of them multinational businesses with a global presence.
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Each company earned a “Global RepTrak Pulse” score of zero to 100, representing an average measure of people’s feelings for it. The scores were statistically derived from calculations of four emotional indicators: trust, esteem, admiration and good feeling.
Reputation Institute also analyzed what it calls the seven dimensions of corporate reputation. That’s where it found that perceptions of the enterprise (workplace, governance, citizenship, financial performance and leadership) trumped product perceptions (products and services plus innovation) in driving behaviors.
“In today’s reputation economy, what you stand for matters more than what you produce and sell,” said Kasper Ulf Nielsen, Reputation Institute’s executive partner. “People’s willingness to buy, recommend, work for, and invest in a company is driven 60 percent by their perceptions of the company and only 40 percent by their perceptions of their products.”
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The study shows that to win support and recommendations, a company needs to tell its story in a way that connects with stakeholders on a global level. “This is a challenge that even the best companies struggle with,” Nielsen said.
Building a strong reputation takes time. “You need to live up to your promises and be relevant in the local and global context,” he added. “You need to be seen as a company who genuinely cares about stakeholders. The best companies are the ones who invest in local and global activities, the ones who are doing more than just selling their products. The companies who are seen as the reputation champions produce locally, employ local people and engage in solving local issues in all markets.”
One company that has been able to do this exceptionally well: BMW. The German automaker is now in the top 10 for all seven dimensions on a global level, and in the top 10 in 10 of the 15 markets, earning the title of world’s most reputable company for 2012.
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It earned a global RepTrak score of 80.08 out of a possible 100, and in its home country BMW did even better (85.79), which isn’t uncommon. Nielsen said companies tend to have a stronger reputation at home. On average, the home country reputation is four points higher than the global reputation across all 15 markets.
“BMW has earned the trust and respect of consumers all around the world though its consistent focus on delivering high quality in all of its actions,” said Nielsen. “For a company to earn a reputation above 80 on a global level is remarkable because we know how difficult it is to build a strong emotional connection outside of your home country.”
Because reputation is often tied to the history of the company, the level of trust and admiration you need to exceed a score of 80 is dependent on many years of positive action and relevant communication, Nielsen said.
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The weaker markets for BMW include the U.S., Japan, Canada and China, where it scored in the 70s — however, a score between 70 and 79 still indicates a strong reputation and “considering that these are the home markets of the largest competitors, this speaks to the strength of BMW,” Nielsen said.
In total, three automakers landed in the top 10 this year. Daimler and Volkswagen hold the No. 4 and No. 8 spots, respectively. Both German car companies outperformed the auto industry by more than 10 points. “This tells us that even if you are in a troubled industry, you can still deliver on your promises through a focus on quality,” Nielsen explained.
No. 2 Sony earned a 79.31 global score. It earned a 76.15 in Japan — which shows that it was able to overcome the challenges that all companies face when trying to build trust and support among consumers in foreign markets.
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“Sony has been able to regain its stellar reputation after its crisis last year with the security breach,” Nielsen said.
The Japan-based multinational electronics company has the broadest reputation profile of all 100 companies, with a top 10 rank in 13 of the 15 markets. The only two countries where Sony didn’t land in the top 10 are Japan, its home country, where it ranks 16th, and South Korea (No. 50).
Sony has its strongest reputation for its high-quality products, but also ranks in the top 10 on all the other measured dimensions. The weakest spot for Sony is the perception on citizenship, where its score fell below 70 on the global level.
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Rounding out the top three is The Walt Disney Company with a 78.92 global score. It ranks highest (No. 1) in the citizenship category — but lands in the top 10 in all seven dimensions.
“The Walt Disney Company has a more mixed reputation than the other top companies,” Nielsen said. “In Japan, Australia, Russia, the U.K. and Italy, Disney has an excellent reputation with scores above 84. But in India, China, France and Brazil, its reputation is at or below 70.” In total, Disney ranked among the top 10 in nine of the 15 markets.
Google fell to No. 6 after holding the top spot for two years. However, the company still has a strong reputation. “Could this drop be a sign that Google has lost its youth image and is becoming more like an established company?” Nielsen asked. It earned a 78.05 global score and has the best reputation in the workplace category.
Others that land toward the top of the heap include tech giants Apple (No. 5) and Microsoft (No. 7).
With a global score of 78.49, Apple ranked in the top 10 in eight countries and all seven dimensions of reputation. In was the winner in three of those categories: performance, leadership and innovation.
“Apple has seen its strong corporate brand transform into a strong corporate reputation,” Nielsen said. The company’s popularity did not translate into a strong reputation until recently, when it started to build a profile outside of its products, he added. “Today, Apple is seen as a company that is delivering on all seven dimensions of reputation, and this broader reputation platform proved its value for Apple when it was able to maintain its high ranking despite the loss of its iconic leader Steve Jobs.”
Microsoft, a newcomer to the top 10, earned a 77.98 pulse score. “The company has been on a remarkable reputation journey. What was once known as an evil monopoly is now the company with the best governance reputation in the world,” Nielsen said.
The Brazilian energy company Petrobras, U.K. telecommunications firm Vodafone and U.S.-based Lockheed Martin landed toward the bottom of the list, with scores under 65 — but they aren’t losers by many means.
To qualify for the ranking at all, each company had to have an above-average reputation score (defined as over 70) in its home market, based on Reputation Institute’s global database of RepTrak scores spanning 2006 to 2011. The criteria for qualification also included company size, based on annual revenue, multinational presence and high familiarity among consumers in the measured 15 markets (Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, Spain, South Korea, the U.K. and the U.S.).
Something all the winners across the globe have in common: They have recognized that the days where a strong product alone would win the love and support of consumers are over.
Earlier this year, Reputation Institute ranked the most and least reputable big companies in the U.S. Forbes reported on that here.
© 2012 Forbes.com