Last year, there was a massive shift in the landscape of reputation in the Netherlands.
Reputation Institute has been measuring the reputation of the country’s 30 largest companies by revenue since 2001, and have seen a steady increase over the past three years in their average score in three distinct measures: pulse (how people feel about companies), dimensions (how they think about companies), and support (their willingness to purchase from or recommend a company).
Between 2018 and 2019, three metrics have emerged as crucial to defining those numbers—these are the factors the Dutch public cares most about. Top of mind are issues that directly affect the customer, such as products and services and customer care; community impact, or the positive influence a company has on society; and fair conduct. Together, these three Cs have wide-ranging implications for building and protecting reputation in the Netherlands today.
Bucking the Global Trend
The strong performance by Dutch companies on all three measures from 2017-2019 is a far cry from the global picture. In the rest of the world, we saw reputation fall sharply at the end of 2017, regaining just some of its losses in 2018. Supportive behavior, which fell in tandem with reputation in 2017, failed to follow suit and rise again. But in the Netherlands, reputation rose steadily and supportive behavior kept pace, even closing the gap slightly.
Why does the Netherlands behave so differently? There are many macro-economic and contextual factors that have played a role—factors like a strong economy, wage increases, and less populist political turmoil—but we believe that the main reason scores are on the rise is that the 30 largest companies in the Netherlands have been performing well on the factors that matter most to people.
The Widening Values Gap
Beneath the surface of that steady, year-on-year growth lies a massive shift in the Dutch population’s priorities. Looking at the 23 attributes that contribute to a company’s reputation score—which fit into the dimensions of Products and Services, Innovation, Leadership, Workplace, Citizenship, Governance and Performance—we found that the attributes that were most important shot up dramatically in 2018, while the least impactful ones dropped off the map. By the end of 2018, the distance between what is important and what is not had doubled.
Bottom of mind were how companies perform financially and how they treat their employees. These criteria, while still undoubtedly able to impact reputation in extreme cases, sank to the bottom of our attribute ranking. In the Netherlands, the economy has been growing steadily for years, businesses have been performing consistently well, and unemployment reached an all-time low at the end of 2018. These issues aren’t in the public consciousness, and so they have little impact on corporate reputation.
With the boom of digital marketing and corporate messaging beyond simple sales drivers, we’re witnessing a distillation of product quality, brand, and corporation into one item: the product. Customers have come to expect that they will experience the corporation’s wider value proposition right there in the product itself. When we buy Nike shoes, we buy Nike and all it stands for, not just the footwear.
What does this mean for reputation management? Products should be seen as a reputational asset, and should be managed as such. There’s a tendency to use reputation as a filter to manage risk at the product level; today, there is an opportunity to use high-quality products to leverage the company’s most impactful touchpoint.
At a time when people are turning to the business world to tackle issues that were once in the hands of government, this year’s reputation survey shows that businesses’ positive social impact is a top driver of reputation in the minds of the Dutch public. People want businesses to contribute directly to society through their core activities and products, not merely indirectly through the support of good causes (an attribute that fell near the bottom in impact this year).
Dutch companies like FrieslandCampina and Heineken have hit the nail on the head, engaging consumers with on-brand initiatives around the environment and safe driving on packaging and at the point of purchase. Shell, Rabobank, Philips, ING, Unilever, and others also recently announced an initiative to create jobs for 3,500 refugees. Companies that can show they are walking the walk when it comes to social impact are reaping the reputation rewards.
The third C that has risen to the top is one that can be managed only by communication. The Dutch public have reached a zero-tolerance level when it comes to unfairness in business, whether it involves data privacy or a company’s supply chain. The message for top-level executives is clear: Fail to be explicit with yourself, your employees, and the outside world about your values and behavioral norms, and risk losing the hardest part of reputation to win back—trust.
As of 2019, company reputations in the Netherlands are reporting to a powerful new C-suite: Customer, Community, and Conduct. We advise them to treat all three with respect!
Vice President and Market Leader, Benelux