Corporate Reputation After a Year of Covid-19

Axios and Harris Poll today released the findings of their annual survey, which gauges the reputation of the most visible brands in the country. Mike Allen led his column today with the assertion that “brands with clear partisan identifications are becoming more popular,” citing brands such as Patagonia (No. 1), Chick-fil-A (No. 4) and REI (No. 11) as indicative of the trend. It is a rare day when I disagree with Mike, but that kind of assertive political stance only works for a niche brand and not corporations. There are other factors that extend well beyond politics that play a bigger role in reputation.

Unilever had a stunning rise to 16th place, up 20 points. It was the first company to hold a Day of Service, in which the products made in its 14 factories across the U.S. were donated to food banks. It also took a highly principled stand in its six-month hiatus from advertising on Facebook. Contrast this to a 27-point decline for rival P&G.

Financial institutions such as Citi enjoyed significant rises in reputation (up 17 points). Bank of America and JP Morgan were also up 10 points and 8 points, respectively. Banks worked with borrowers on more generous terms for repayment, instead of calling the loans as they did during the 2008 crash when 13 million Americans lost their homes.

Entertainment companies fell from their peak popularity during last year’s lockdown. As the world reopens the bubble has proven unsustainable. Witness the 15-point drop for Hulu. There was a similar effect in e-Commerce with declines in Amazon (down 7 points) and in supermarkets (Publix down 19 points, Kroger down 21 points).

Big brands that failed to take significant actions lost reputation. Examples would be Coca-Cola (-17 points) and AT&T (down 10 points). Meanwhile, health care brands such as Pfizer (up 54 points) and CVS (up 13 points) flourished.

What we have learned from the pandemic year is that companies are expected to lead. That means CEOs speaking out and taking action on systemic racism or acts which restrict people’s ability to vote in their HQ states. It calls for a new deal with employees, including fair pay, consideration of their views on controversial issues and retraining/upskilling. Companies are expected to evolve operations to make sustainability and fixing societal problems part of their immediate and long-term strategy. Taking purely political stands only works for niche brands such as Patagonia or Ben & Jerry’s. For the rest of the corporate sector, it is a bridge too far.

Richard Edelman is CEO.

https://www.edelman.com/insights/6-am-corporate-reputation-after-year-covid-19