European car brand BMW is the world’s most reputable company in an age where consumers are more swayed by a business’ image than its product, according to the latest Global RepTrak 100.
The Global RepTrak 100, an annual study conducted by the Reputation Institute, is based on a global survey of more than 100,000 participants.
Measuring 100 of the most highly regarded companies across 15 countries, it identifies how leading companies are perceived and what it takes to have a strong global reputation.
This year’s report reveals BMW as the new world leader, followed by Sony, Disney and luxury carmaker Daimler, with tech giant Apple rounding out the top five.
Fellow tech giant Google – which was at the top of the list in both 2011 and 2010 – fell to sixth place this year, followed by Microsoft, Volkswagen, Canon and the Lego Group.
It’s also worth noting Microsoft is a newcomer to the top 10, after pushing out Intel.
According to Kasper Ulf Nielsen, an executive partner at the Reputation Institute, what you stand for matters more than what you produce and sell.
“People’s willingness to buy, recommend, work for and invest in a company is driven 60% by their perceptions for the company, and only 40% by their perceptions of their products,” he said in a statement.
The study shows that in order to win support and recommendations, a company needs to “tell its story” in a way that connects with stakeholders, which is a challenge for all companies.
The report shows while reputations may be strong in a company’s home country, popularity does not translate easily abroad.
While companies see as much as 95% of revenue from foreign markets, only 11% of the top 100 companies have better reputations abroad than at home.
Nicolas Georges Trad, another executive partner at the Reputation Institute, said in a statement that reputation “isn’t something that’s easy to export”.
“Your reputation is an emotional connection, which is built over time. It’s tied to your history and past actions. Exporting that emotion is proving to be very difficult,” he said.
“Companies lose as much as 40% of recommendations outside their home markets. This has to change if they want to capture market shares globally.”
“To improve sales, companies must invest in reputation.”
The report shows a strong correlation between a company’s reputation and consumers’ willingness to recommend it.
For the top companies, 55% of consumers said they would definitely recommend their products to others, compared with only 22% for the companies at the bottom of the list.
“Word of mouth is the number one driver of sales and competitive advantage. Investing in reputation will pay off on the bottom line,” Trad said.
The news comes after supermarket giant Woolworths was named Australia’s most valuable brand by Brand Finance as part of its annual Top 30 Australian Brands list.
Incorporating data from all listed companies in Australia, each brand receives a brand rating, which measures the strength, risk and future potential of a brand relative to its competitor.
They are also rated in terms of brand value – a summary measure of the financial strength of the brand.
This year, Woolworths was followed by Telstra, Coles, Commonwealth Bank, NAB, Westpac, ANZ and Optus. Meanwhile, Apple was ranked the world’s most valuable brand.