63% of a company's market value is attributed to reputation
- United Arab Emirates: Sunday, September 16 - 2012 at 10:38
- PRESS RELEASE
A company's value is more than just its current level of market capitalisation, according to Steve Hamilton-Clark, CEO of TNS MENA, a world leader in stakeholder management research and corporate reputation benchmarking.
"A strong corporate reputation is essential not only to protect your business, it is also vital for sustained growth. In fact, many companies attribute a staggering 63% of their market value to their reputation."
Hamilton-Clark suggested that companies must understand the drivers of reputation, especially in this new corporate setting that has embraced the digital space.
"In today's news-driven environment, it is far easier for companies to fall prey to assaults on corporate reputation. Due to burgeoning internet and technology use, the slightest corporate misstep can be magnified," he said.
Research reveals that the aviation sector remains the gold standard in terms of reputation in the UAE, closely followed by the FMCG and the postal and courier sector. In fact, the FMCG Sector is the front runner in Saudi Arabia, with telecoms and aviation coming in at second and third, respectively.
Hamilton-Clark shared that a higher degree of trust exists for companies operating within these sectors as they boast a relatively higher proportion of 'ambassadors' to spread positive word-of-mouth communication and in turn influence the company's reputation.
He urged companies to strike a good balance between Brand Promise and Brand Delivery to be able to step up their Corporate Reputation and cited research from TNS's Corporate Reputation Program 2012, an initiative that investigates the general public's perception on overall reputation of companies measured by social responsibility, emotional affinity and corporate competence.
"In the UAE many consumers have high emotional affinity measured by trust favourability towards banks and automotive companies. These sectors need to deliver on their competences across product and service offerings in order to sustain a sound reputation.
"Meanwhile in Saudi, research suggests that these sectors need to focus more on word-of-mouth management in order to create higher levels of trust and thus enhance reputation."
He added that by understanding expectations and identifying the drivers of corporate reputation companies can start to overcome reputation risks, leverage key strengths and define effective corporate behaviour and communication strategies for each audience.
"Appreciating the intensity of public concern is vital. Ensuring quick proactive and corrective actions that matter most to stakeholders is a must," he concluded.
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