Businesses with the best reputations can recruit the best people
6th January 2015
All PR practitioners know that a good reputation is important for a business, but do company CEOs appreciate exactly how much value it adds to their bottom lines? To help answer this question, The PRCA, in conjunction with research firm YouGov, carried out research into the importance and value of reputation for UK businesses.
How much do you believe your/your clients’ Board of Directors thinks reputation is linked to the overall financial performance of your/their organisation?
The good news for the PR industry is that senior decision makers in companies do seem to appreciate the degree to which reputation influences the financial success of their business. More than three-quarters of respondents (76 per cent) believe that their own or clients’ boards perceive a strong link between reputation and financial performance.
Top three business benefits most directly linked to enhanced reputation
The top three business benefits most directly linked to enhanced reputation are considered to be: the ability to have the best staff; better media coverage; and better stakeholder support.
It is not all good news, however, Oliver Rowe, director, reputation research at YouGov, says that despite senior management realising the strong connection between reputation and profitability, there is still “a bit of a struggle with the CFO”.
Rowe highlights three other key findings from the report:
- Enhanced sales is the most spontaneously mentioned bottom-line benefit of an enhanced reputation, but ability to recruit and retain the best staff is the most chosen general business benefit.
- In-house cite less direct benefits of an enhanced reputation than agency professionals.
- Few businesses assess PR’s performance with key financial metrics, though “more effective marketing and sales activity” was cited by half, and higher sales by a quarter, but positive media coverage is by far the leading measure.
Summing up, Tony Langham, vice-chairman of the PRCA’s PR Council, says: “The findings suggest that we’re on the brink of a sea change in the role of communications professionals. There is wide appreciation that a strong reputation achieves more than just positive media coverage and enhanced marketing – it also delivers better quality staff, the benefit of the doubt from stakeholders and greater clout with Government. The person at C-suite level, who really gets it, is the person who matters most, the CEO.”
“The only worrying sign in the survey is the under-investment across the British industry in crisis planning and in social media. As a consequence though, both areas offer competitive advantage to those organisations that do invest”.
Taken from the PRCA’s database, 114 members took part in the Economics of Reputation study between July and August 2014, split between agency and in-house. All respondents had senior roles, with an average of 16 years in the industry. For more information go to the PRCA website.