Management perception is key in the brand wars

For the first time in decades, there is huge opportunity for real change at the top of the corporate brand pyramid.

For the first time in decades, there is huge opportunity for real change at the top of the corporate brand pyramid. Many big brand names are losing their mojo and this will create a vacuum for companies that have set their strategic sights on replacing them.

This sea change can trace its roots backto the enactment of Sarbanes-Oxley, which put pressure on management to elevate stakeholder perception of the C-suite and run organizations more transparently.

Companies that have not consciously made efforts to improve perceptions have become vulnerable and those that have bettered perceptions are moving up.

Results of the Favorability Report, the second report in the CoreBrand BrandPower, noted that top movers include Aflac, Amazon.com, Delta, Philips Electronics, Southwest Airlines, Quest Diagnostics, Citigroup, Goldman Sachs, and Progressive. Dish Network managed the biggest gain moving from 478 in 2007 to 184 in 2012.

My company, CoreBrand, studied the favorability of 500 top companies using three important attributes: overall reputation, perception of management, and investment potential.

Results found an unusual downward trend in favorability, which led us to conclude that while many companies maintained or improved brand awareness, overall market sentiment toward top corporations is skeptical.

The key findings were as follows:

  • Perception of management. This is the main driver of the decrease in favorability scores. Companies need to focus on transparent communications to build trust.
  • Rising momentum. Companies in tier two (ranked 101-200) have a surprising upward momentum in favorability, showing they are poised to overtake many of the top 100. If this trend continues, it is quite possible there will be a huge shake-up in power brand rankings in the next few years.

All things being equal, any of these companies have the financial ability to launch and sustain the kind of marketing, communications, and investor relations campaigns that will move them up the brand ranking ladder. The question is, do they have the leadership and mindset to accomplish such a move?

It makes sense to invest resources and strive to be a tier one company. Top-tier businesses enjoy an ability to maintain their corporate brand more easily and efficiently than lesser tiers. They also have the advantage of rebounding faster in a crisis and generally being associated with other winners than brands of lesser stature.

Tier-two brands need to spend more to achieve a higher status and take longer to recover from an economic downturn or crisis. They are not seen and associated as readily with world-class performance.

The tier-one club is well worth the price of entry if you can break through. Many of these companies work hard to maintain and improve their corporate brands. Bayer, Kellogg's, Walmart, McDonald's, Apple, MasterCard, and Microsoft are all brands in the top 20 of the CoreBrand rankings that have continuously grown their brand for the past five years. That kind of consistency doesn't happen without clear vision, leadership, and a commitment to communicate.

There are also some tier-one brands in notable decline. Johnson & Johnson, Sony, and Toyota are all brands that have struggled in vision, quality and consistency. These companies have lost brand power continuously over the past five years and need to rebuild their brands or they stand to permanently damage their stature.

Of the 100 tier-one brands, 27 have moved up consistently over the past five years. Tier-two brands are more aggressive with 39 moving up consistently. All of the top movers have something in common. They are consistently building their brands. These include Aflac, Delta, and Southwest Airlines.

Companies with a desire to win the battle of the corporate brands must remember that perception of management at this time is the most important attribute for sustainable growth. Get your CEO out in front with key communications and keep the message consistent for the long haul. Measure success over time because you won't know if you are succeeding without tracking your company's position against its peers. 

Jim Gregory is founder and CEO of CoreBrand, a global brand strategy, communications, and design firm.

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