Between 2014 and 2016, Amazon was the most reputable company in the US. In 2018, while still holding on to a very strong reputation of 79.2 among the general public, Amazon dropped to number 10 in the US.
Amazon’s reputation has mainly been driven by one specific stakeholder group: its customers. With 91% of respondents being customers, this stakeholder holds Amazon to high-esteem and gives it an excellent reputation score of 80.5, that’s 1.3-points higher than the general public – allowing it to maintain an overall strong reputation.
“Our vision is to be the Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” – Amazon’s Mission Statement
For US customers the key drivers of reputation are Products/Services, Performance and Governance. Not surprisingly, Amazon excels in two of these dimensions: Products/Services and Performance (Figure 1). With purchases that are a click away and delivered on your doorstep as early as a few hours from ordering, and financial success that made Jeff Bezos the richest person in the world, Amazon delivers on what matters to its customers.
Figure 1: 2018 vs. 2017 Amazon Reputation and Dimension Scores in the US
What about the rest of Amazon’s key stakeholders? Is Amazon delivering on what matters to them?
For the US retail industry, the Product/Services dimension is still the most heavily weighted driver, but the corporate social responsibility (CSR) dimensions, Governance and Citizenship make up for the rest of what drives over 50% of retailers’ reputation (Figure 2). The same three dimensions are key drivers of reputation among non-customers in the US.
Figure 2: 2018 US Retail Reputation Drivers
Digging deeper and looking at what drivers Amazon’s reputation specifically, there is a shift in sentiment among the general public. In the second half of 2017, key drivers of Amazon’s reputation focused on Products, Innovation and Leadership. In the first half of 2018, the US public puts positive influence on society as the most important factor in driving Amazon’s reputation.
This hints to a change in the perception of Amazon’s reputation. How this will impact Amazon’s reputation score is predominantly based in Amazon’s future actions.
Amazon: Behind the Scenes
Recently, a lot of questions were raised about Amazon’s workplace culture. Following the not so positive media coverage spearheaded by Vermont Senator, Bernie Sanders, Amazon took action and showed its reputational concern when it formed an employee group called FC Ambassadors: a group of fulfillment center employees tasked to battle negative social media (see below) on Twitter.
Unfortunately, it seems that this newly formed group of FC Ambassadors is sparking more doubt and skepticism among the public.
Amazon is taking action to tackle reputational damage. However the company is failing to communicate or commit to meaningful internal reparations which would help establish a genuine emotional connection with more stakeholders.
What actions can Amazon take to maintain its reputation?
- Shift beyond product and profit to deliver on corporate social responsibility (CSR). Reputational dimensions that fall under our CSR definition – Governance, Citizenship and Workplace – have always been Amazon’s pain point. While it has excellent scores in Products and Financial Performance, and strong scores in Innovation and Leadership (and barely strong in Governance), when it comes to its Workplace and positive impact on the world, Amazon is merely average. Compared to 2017, Amazon has the highest declines in the CSR dimensions and an average 12-point drop in CSR. As CSR and especially Governance and Citizenship are key drivers of reputation, Amazon must focus on actions that involve more than only Products and it must clearly communicate those actions to its stakeholders.
- Turn Workplace culture from reputation risk to opportunity. Amazon’s Workplace score dropped a whopping 15.3-points in 2018. Thirty-nine percent of the general public are not sure about Amazon’s Workplace culture, whereas there are no doubts about what Amazon is selling. For as long as Amazon does not own the narrative of its own Workplace, there exists reputation risk that the Media will sway unsure stakeholders to become company detractors.
- Corporate narrative must align with Mr. Bezos’ activism. Media has predominantly focused on Jeff Bezos’ wealth; however, Amazon’s CEO has been very outspoken regarding social issues such as immigration, and the disbandment of DACA. Amazon should incorporate Bezos’ voice into their corporate narrative. Currently, Bezos as CEO has excellent scores with regard to his Management and Leadership; but falls flat when it comes to Responsibility – behaving ethically and caring about social causes. In this CEO dimension he has an average reputation score of 65.7, 6.9 points lower than the global average.
- Create an internal culture inclusive of employee ambassadors. Amazon’s FC Ambassador program focuses on external reputation management while not focusing on its internal reputation. To have a positive corporate culture and create true employee ambassadors, the work needs to come from within. Amazon’s recent strategy – initiating a Twitter army – is not good practice. If Amazon wants to change the workplace narrative promoted by media, it must change from the inside out, share its story, and then align perception with a new and improved reality.
- Communicate, communicate, communicate! The world of Amazon beyond its ecommerce website remains a mystery to the general public. With over 27% of the public not sure if Amazon provides sufficient information on its activities, and 37% not sure if it welcomes open discussions, there is an evident communication issue and lack of transparency. Amazon must open itself to dialogue beyond the customer service chat box, share its story, and its commitment to CSR, employees, and CEO activism.
- Find ways to create an emotional connection with stakeholders. Amazon performs better in Products, Innovation, Leadership, and Performance, but falls behind in CSR and emotional connection. Its story, its narrative, its activism fall short or are perceived to do so because there is no clear communicative message about what’s really happening at Amazon.
- Deliver on human intelligence. Amazon’s customer service experience has been mainly supported by technological advancement and artificial intelligence. To build a strong emotional relationship with customers and stakeholders-at-large, Amazon must deliver on service with human intelligence. For the moment, humans supersede AI in the area of emotional connection. These connections drive reputation.
Corporate reputation is no easy fix, but it is essential for business growth and sustainability. Amazon (and most every company – large and small; retail, tech or otherwise – will improve with a strategic plan around Reputation Intelligence.