The New Science Of Brand Reputation: Why It Matters

ferrari brand reputation why it matters
Brand Reputation is a discipline separate from that of traditional branding campaigns. Brand Reputation recognizes that due to increased transparency and access to information, ‘traditional branding’ whether through mission statements, marketing or affiliations can easily be verified and evaluated. Think everything from customer reviews, to supply chains.
I believe reputation and the metrics that will measure reputation will play an increasing role in keeping organizations honest and forcing them to take definitive actions, rather than simply making quasi public statements.
Both consumers and employees are getting into the game.
Brand Reputation is sort of like the 2.0 of brand marketing. Until recently brands had largely been considered intangible assets. Accounting contributed to this conception by identifying goodwill as the excess over book value that one company was willing to pay for another. That excess was the value of the brand.
Times have changed. More than ever before brand is essential to the success of any business. Much of this power is because people can personally identify with a brand; the brands often trumps the physical product itself in terms of importance.
This is the driving force for high margins in luxury goods. For example, Abercrombie & Fitch has used targeted branding and outreach to drive incredible revenues despite its products being of questionable quality. must play to an audience as the brothers Heath note in ‘Made to Stick.’
Another shift has been organizations embracing themselves as brands.
For example, the university one attends, or the organizations one affiliates are increasingly recognizable and monetizable. Knowing that someone attended a certain college, or is affiliated with certain brands conveys all sorts of ethnic and class related information – a social credential if you will. Globalization has further increased the importance of brand –  the Nike Swoosh, or name Ferrari is recognizable everywhere regardless of cultural or language differences.
But the primary catalyst for the rise of brand reputation is the Internet.
As consumers have been given greater access to information they have become empowered (better informed) to decide how and where they spend their money. This empowerment has resulted in creating greater accountability on the part of businesses and organizations alike. Even Congress and international legislators have begun to demand increased accountability and sustainable practices partially as a result of online advocacy.  The internet forces accountability and transparency.
In business school we learn the goal of management is to increase shareholder value. As it turns out, the definition of a ‘shareholder’ is increasingly broad and can encompass anyone from a holder of company equity to management to employees to vendors. While traditional business practices have focused on the bottom line, a shift toward focusing on brand reputation takes a more holistic approach and recognizes that revenue and corporate social responsibility are not mutually exclusive. Think Patagonia, or Ben & Jerry’s. Think of the amazing things you hear about working at Google.
Business leaders and financiers have also recognized that a strong brand is a monetizable brand. For example, MySpace, Facebook and YouTube are all companies with exceptionally strong brands but with paltry revenue streams. My guess is this changes. Building brand is more important than building cash flows, at least for a while.
Brand reputation is community driven.
An amazing brand appeals on a more human, a more emotional level. It is greatly enhanced by the interactions with its community (advocates, customers, employees). The strongest brands are grown organically, start niche and with a focus on building tight relationships driven by mission and clear objectives.
Lastly, as discussed in a prior post, Brand Reputation Optimization will be the new quantitative science (i.e., the KPIs and metrics) used to measure, grow and value brands over time.

brand repuatation


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