Corporate reputation is a fragile thing, hard to make and easy to break. A product recall, dubious tax strategies, antisocial behaviour or misleading advertising can each damage a company’s image and, in doing so, negatively impact revenue. These are the factors Reputation Institute (RI) has analysed since 2006 through global and regional surveys. Findings, based on consumer surveys, are compiled into RepTraks. The most recent report is based on responses from 230,000 individuals in 15 countries over the first quarter of 2018 about their perception of prominent multinationals. Criteria include product value and relevance, ethical behaviour, transparency, the ability to make the world a better place, innovation, the work environment and governance.
Rolex tops the list
For the third year in a row, the top spot in this RepTrak100 goes to Rolex, ahead of Lego and Google. This may come as a surprise, given that Rolex is governed by a trust that never divulges its finances and keeps a tight lid on communication. As Stephen Hahn-Griffiths, Chief Reputation Officer at RI, reminds us, it’s a company traditionally associated with conspicuous consumption, social status and elitism. Hardly qualities the public is likely to find endearing in these uncertain economic times. And yet Rolex is number-one for three main reasons, as Hahn-Griffiths explains: “Rolex has built a strong emotional connection over time. It’s been highly effective in leveraging celebrity endorsements and sports sponsorships to contemporise its reputation. Think Roger Federer, Wimbledon and the British Open golf.”
The perceived quality of its products is another important factor. “As a company that delivers on timeless quality, Rolex has upped the ante on redefining luxury by launching new products that capture a spirit of adventure,” notes Hahn-Griffiths. In other words, watches built to sustain the most extreme conditions without flinching. Rolex’s philanthropic efforts and commitment to the environment also set the company apart. Hahn-Griffiths quotes the Rolex Awards for Enterprise, which recognise individuals who are working to make the world a better place, and the Rolex Mentor & Protégé Art Initiative to advance culture and artistic endeavour, both of which contribute to showing the company in a positive light. “Rolex is one of the few companies to be recognised for corporate social responsibility,” Hahn Griffiths concludes.
With ethical behaviour, transparency and product value among the major factors that determine a company's reputation, Apple has come a cropper.
Communication is key
For Apple – often cited as the only company capable of ousting Rolex from its position as the number-one watchmaker in the world, just a few years after entering the market -, it’s a different matter entirely. With ethical behaviour, transparency and product value among the major factors that determine a company’s reputation, the Cupertino firm has come a cropper. Tax evasion, accusations of battery-tampering, encryption conflict with the FBI and flagging iPhone sales have sent Apple plummeting to number 58 in the RepTrak100, down 38 spots.
Watch firms are also prominently placed in this year’s study by Reputation Institute of the Swiss Market Index. Swatch Group and Richemont rank second and third, behind Geberit. According to RI, “New recipes are needed to build and strengthen reputation. Pure brand awareness is no longer enough, it needs quality and depth in customer relations. Businesses need to engage with their audiences and have a broad understanding of their role in society – and communicate as much as possible through all available channels.” Something watch brands are clearly doing right.