With big names like Tiger Woods and Toyota Motor stepping into the spotlight of public scrutiny this year, reputation is a hot topic in the media and in corporate boardrooms. No company wants its public image to be the reason it has a hard time rebounding from the recession.
So what factors shape the public's image of American businesses? Which companies do consumers trust and admire? Reputation Institute, a private consulting firm, conducted 24,977 online interviews, asking people about their perceptions of the nation's largest (by annual revenue) 150 companies' products and services, innovation, workplace, governance, citizenship, financial performance and leadership. It assigned each company a score — 0 to 100 — based on responses and then ranked them.
The companies at the top of this year's list were mostly household names and food makers. For the second year in a row, Johnson & Johnson, maker of pharmaceutical, medical devices and consumer goods, has hit the top spot for America's most reputable, popular company, with a score of 85.82. Its baby washes and powders draw in new mothers, who learn to trust the products on their newborns and develop a special bond with the company, which runs the popular BabyCenter Web site. The New Brunswick, N.J., company has ranked in the top 10 of this survey for the past five years.
The secret to Johnson & Johnson's success rings true for all of this year's top reputable companies: Each has direct connections to their consumers and their families. Walt Disney Co., the theme park owner and entertainment giant, forms a special connection to children and their parents, who visit Disney World in Florida and Disneyland in California on family vacations. Families watch Disney movies in the comfort of their homes and use Disney as a household name. The entertainment company ranked fourth on this year's list, up from seventh position last year. Its score was 82.11.
United Parcel Service, ranking no. 9 with 78.93 points, gets its good image and stays on the top 10 because of face time with consumers. "UPS is a business-to-business marketer that makes the list because consumers have a direct experience with the company and they know what it does," says Anthony Johndrow, managing director of Reputation Institute.
Food makers were the biggest gainers with consumers this year, boosting their score by 5.2 points on average over last year. These corporate brands have benefited as cash-strapped consumers eat at home more than they are eating in restaurants. Kraft, maker of Oreo cookies and macaroni & cheese, came in second with 84.84 points, up 3.75 points from last year. The company pulled consumers in with its mainstay products and boosted its public profile by launching a corporate campaign and rolling out a new logo in February 2009.
Kellogg Co., Sara Lee Corp. and Dean Foods were newcomers to the list this year, thanks to new judging criteria that put companies with at least $8 billion annual revenue in the running. In previous years Reputation Institute included in its study only companies with $13 billion in annual revenue. Sara Lee, Kellogg and Dean, all food manufacturers, were among the few companies in the top 10 to have increased their advertising spend from 2008 to 2009, according to New York media research firm Kantar Media. The only other company to boost its ad budget was Microsoft, which increased spending by 55 percent to $510 million.
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Philanthropy was another big determining factor this year and these efforts probably helped boost Microsoft to No. 8 on the list and Pepsi to No. 5. Both companies have spent millions of dollars on cause marketing over the past year. Many consumers now associate Microsoft with the Bill and Melinda Gates Foundation instead of monopolistic leadership, says Johndrow. They also see Pepsi as a company that connects with communities, thanks to the Pepsi Refresh effort, a contest that awards money to community leaders who propose public service projects.
The biggest losers on the list reflect lingering consumer distrust of large financial institutions. They include big banking firms, such as Citigroup, Goldman Sachs and Bank of America, which ranked 146, 145 and 143, respectively. Still grappling with consumer trust, they dropped an average of 6.3 points since 2009.
Johndrow says company executives are increasingly interested in how their companies are viewed by the general public. When reputations improve by five points, consumer recommendations hike by 6.5 percent. “Get more people talking about your products and your company, and you can bet you'll improve your bottom line,” says Johndrow.