Build Your Benchmarking Fortress

by Matthew Merlin, Director, Delahaye

A smart company understands that a favorable reputation improves its bottom line, and the only way to effectively manage reputation is to benchmark it and improve upon what you learn. From a PR perspective, a strong reputation acts as good will, giving you benefit of doubt from journalists who are the traditional gatekeepers of the news and the public who develops beliefs about companies based on the news. Bottom-line survey data that compares several companies' reputations is a solid benchmark, but tracking the media's coverage of those same companies adds additional benefits that can't be achieved with surveying alone.

THE ORIGINS OF REPUTATION
Reputation is the sum of people's opinions developed through experiences over a long period of time. These interactions are through direct experience with an organization, such as a helpful clerk at a checkout aisle or indirect experience, such as a television news segment praising a company's response to an emergency. In Malcom Gladwell's recent book, "Blink - The Power of Thinking Without Thinking," he describes the human brain as a giant computer, constantly processing information on an unconscious level and shaping our beliefs and attitudes, whether or not we are cognizant of its powers. Our mind is constantly tabulating those interactions as we develop opinions about companies through direct and indirect means on a daily basis.

REPUTATION BENCHMARKING
Although we don't have the ability to cost-effectively measure each person's unconscious opinions, we do have indices for assessing collective reputation as a bottom-line gauge of compiled opinions. Some indices, such as Fortune's Most Admired Companies, surveys business executives, while others, such as Landor's ImagePower Brands Survey and the Harris-Fombrun Reputation Quotient study by Harris Interactive Inc. & the Reputation Institute measure opinions of the general public through surveys. The Reputation Quotient study further breaks down its measures into six dimensions, such as social responsibility, workplace environment and vision & leadership, while Fortune's uses eight key attributes. Additionally, custom studies are widely available. Because these studies are usually only conducted once a year, top-line reputation surveying is subject to sudden jolts in public opinion that may be only temporary.

By listing one company's ranking on a longitudinal chart, we can benchmark its data against its competitors', resulting in a comparable measure of that company's reputation. For example, Target's ranking has been rising while Wal-Mart's has been falling in a list of companies from the retail sector (Chart 1). These bottom-line results encompass every experience a stakeholder has with a company, whether that person is a customer, employee or investor. Every department within a company, not just communications and branding, has an impact on these consumer beliefs whether it's the customer service department, human resources or research & development. Advancing a company's standing in subsequent surveys involves intense long-term corporate-wide collaborations.

Retail Industry
Reputation Quotient Score by Harris Interactive and the Reputation Institute
Rank among the 60 most visible U.S. companies
Year	Target	Wal-Mart	Sears	Kmart
2004	18	28	31	57
2003	25	23	33	56
2002	26	17	29	53
2001	21	17	38	40

Chart 1 - Trends in overall reputation can be assessed by charting results of these companies over time, delivering a valuable benchmark.

MEDIA MEASUREMENT BENCHMARKING
Swings in public opinion are greatly influenced by the media, as our news-saturated population is constantly absorbing tidbits of information that shape our beliefs. Measuring the media's coverage on an ongoing basis of a company's tone, impression numbers and messages continually adds to your understanding of reputation where surveying falls short because of its tempered nature. Media measurement allows a company a first glimpse to see if its outreach to stakeholders is taking hold as it can signal an early-warning pulse of recent movement.

Good media measurement is compiled several times throughout the year and can indicate changes not just in your company's reputation, but also its reputation in comparison to its peers. Among all the points of communication between a company and its stakeholders, the media are extremely important because they serve as a rapid distributor and an agenda-setter of news. Furthermore, media measurement is more actionable than a simple corporate reputation ranking. A communications department is better able to use that information to affect rapid change, such as pitching to publications that tend to give better coverage of key reputational facets to the competition.

One such measure of media is the Delahaye Index, which continually tracks large, U.S.-based companies and their media coverage and reports results on a quarterly basis. The Index is adept at providing statistics on the quantity and quality of news coverage by showing long-term benchmarking charts for tone and overall rank.

Verizon is one of the companies receiving a continually improving assessment of its news coverage in the past several years (Chart 2). Even before AT&T was acquired by rival SBC, Verizon officially became the new telecommunications bellwether when it was listed on the Dow Jones Industrial Average. Verizon's overall reputation score has also been rising in the past few years, assisted by its increased visibility as a leader in an industry where mergers and acquisitions have dominated the headlines. The results of these studies may not be fully evident in survey-based measures for some time. But communications professionals receive quick feedback that their efforts are working and are on the path to yielding longer-term results.

Delahaye Index Score of Media Measurement
Rank among the largest 100 largest U.S. companies
Year	Verizon	Boeing	Citigroup
2004	5	8	9
2003	16	14	19
2002	20	26	45
Reputation Quotient Score by Harris Interactive and the Reputation Institute
Year	Verizon	Boeing	Citigroup
2004	35	30	41
2003	40	31	N/A
2002	40	35	46

Chart 2 - All three companies improved their scores between 2002 and 2004 on both indices indicating continued improvement. The Delahaye Index rankings delivered better results than their Reputation Quotient score counterparts.

Also, in recent years, both Boeing and Citigroup have recovered from difficult periods, Boeing from an air-refueling tankers scandal that caused its former CEO to resign and Citigroup from a large securities-related settlement. While their overall reputation scores have improved, their media reputation scores have excelled, as they've moved past these dark media periods.

While a survey gives you a relative indicator of a company's overall reputation, guidance from a media measurement program gives you tools to improve these results. In conjunction with other products such as employee surveys, journalist audits and customer satisfaction surveys, you'll utilize both reputation surveys and media metrics to constantly improve how stakeholders' beliefs and attitudes are shaped.

Matthew Merlin is a Director at Delahaye, analyzing media that comprise the Delahaye Index, which tracks the largest 100 U.S. companies. Until recently, Matt was Managing Editor of The Journal of Integrated Marketing Communications for Northwestern University. He can be reached at mmerlin@delahaye.com.

Volume 18, Number 3
August 2005