For multinational corporations, there was a time when great success meant increasing sales and keeping shareholders happy. But today, global consumers are using their pocketbooks to convince these companies that being a good corporate citizen matters too – a lot.
As Edelman's “Good Purpose Study” shows, nearly half of global consumers are buying a brand – at least on a monthly basis – that they believe supports a cause. And when quality and price of a product are deemed equal to rival products, social purpose has been the leading purchase driver since 2008 – outpacing design, innovation, and brand loyalty.
In the US, 86% of Americans believe that companies need to place at least equal weight on society's interests as those of their business.
(Read the study here: http://purpose.edelman.com/)
This study and other overwhelming evidence make the logic inescapable: for corporations to thrive financially, they must be perceived as being a good corporate citizen.
Anecdotally, this is true in my own family, where company reputation has become vital to shopping decisions. Personally, I buy Toms shoes because I like their “one for one” mission to transform purchases into a force for good. Buy a pair of Toms shoes and Toms gives a pair of shoes to kids in need.
My daughter shops at Whole Foods because she trusts that the company stands for organic means of production and environmentally friendly packaging, down to their grocery bags and napkins. She is willing to pay a premium for the brand of Whole Foods. All companies should understand the value of trust in revenue, loyalty, and word-of-mouth marketing.
Trust is the single biggest driver of opinion and consideration for an automotive purchase. What propels trust to go up or down? For Toyota, trust in our bedrock of quality and reliability was shaken four years ago when the company was faced with recalls for which multiple theories and allegations were publically aired before the true solution was determined.
That's why in 2012, we launched a holistic company reputation effort in North America. We started with research to help us understand the views of our consumers, employees, dealers, and other stakeholders. Despite our company's long history of good corporate citizenship, the research revealed that opinion-leading stakeholders did not know Toyota, the company.
So, for Toyota, the challenge was clear: How do we help people understand and trust our company as much as they do our products?
In today's hyperlinked world, where anyone can easily broadcast their message, social media influencers can have an outsized global impact. Exceeding, not just meeting, the expectations of third-party stakeholders is critical to our reputation and business performance. We did just that through Meals per Hour -- sharing our manufacturing know-how with the Food Bank of New York to vastly improve their process so more people could be served food in less time.
In good times, third-party advocates are essential to business success -- and even more vital when things go wrong. By engaging with stakeholders, particularly in the areas of greatest importance to them -- whether it's the environment, safety, diversity, or education -- today's multinational corporation will earn goodwill by contributing solutions for societies biggest problems. That's how truly effective reputation-building exercises can be fought and won.
Julie Hamp is chief communications officer at Toyota Motor North America.