Ipsos Corporate Reputation

KEY AUDIENCES: STAKEHOLDERS & INFLUENCERS

It is clear from our conversations with Council members that the profile, influence and importance of stakeholder groups are continually shifting and evolving. The vast majority of Council members name several stakeholder groups that have become increasingly important in recent years. Many point to the emergence and growth of some new influential audiences, driven by social media giving a louder voice to a wider group of audiences, including the public;

“It gets back to the whole social media piece. Everyone has a megaphone and can be heard. We have to pay closer attention and be more nimble to respond and engage.”

While recognising the growth in new influential stakeholders, many Council members also stress that this has not diminished the role and importance of traditional stakeholders (e.g. in government or media). Interviews highlight that it’s not a case of new stakeholders pushing aside the old players, but instead that there is now a larger range of influential stakeholders for corporate communicators to engage and manage.

WHICH STAKEHOLDERS ARE BECOMING MORE / LESS INFLUENTIAL?

A range of different audiences are recognised by Council members as becoming more influential, but leading the way are customers and employees, closely followed by government/politicians and the general public. Non-governmental organisations (NGOs), journalists and investors are also commonly mentioned.

CUSTOMERS

While many explained the increased importance of customers as being the audience which ultimately buy their products and services (“We’re not an NGO, we’re not the government, we’re a company that makes products. We’re here to serve the customers.”), others point to the fact that customers are becoming more aware and vocal on socio-political issues;

Customers, maybe over the last 10 years, have become more important than ever, only because they are such an important voice in a lot of the debates on health or the environment or packaging or whatever it might be.”

Similarly, the wider public’s influence is growing as they become more organised and sophisticated in getting their voices and views heard on socio-political issues;

The informed public, the political and socially interested ones have not really played a part in the past but have now become more important.”

Several corporate communicators observed the growth of “individual activists”, highlighting the influence that one voice can now have;

One of the areas we have seen massively grow is individual activism and how that can actually be really quite challengingas a company, we are not set up to meet with all these individuals because otherwise that is all we will do. And it has really required us to look at what information can we produce that will be easy to send to these individuals and engage with them but not necessarily require us to have meeting after meeting after meeting.”

While engaging with an individual is one solution, many also turn to NGOs as a partner to help influence the views of activists and “shape the external landscape”. NGOs are also seen to be increasingly important to understand the views of consumers while also providing, as one member stated, “a useful sounding board for us as we are developing plans”. Just like the wider public and individual activists, NGOs are becoming increasingly organised and influential on socio-political issues.

EMPLOYEES

Closely related to the growth of individual activism and engagement, is the extent to which employees are now taken “much more seriously as a sophisticated stakeholder audience”.

“Employees have risen to the top as far as important audiences. They were an afterthought, even a couple of years ago. Understanding that employees are at the heart of an organization – that they’re the ones who drive the culture and the results – is definitely a trend.”

Employees are increasingly being thought of as credible communicators which companies need to “help empower as potential ambassadors for the business”. There is also a recognition that taking good care of the workforce can lead to a better-run company and being able to recruit the best possible talent.

Our research shows that employees are seen to be a trusted source of information. Organisations should therefore leverage the potential influence that their employees hold as credible communicators.

However, to do so, employees need to be both empowered and enabled. Similarly, employees need to receive enough knowledge about their organisation’s values and aspirations, so they feel confident enough to discuss these with others. Messaging should be aligned across the business and succinct in layman’s terms, so that it can be easily digestible and easily relayed by employees. Inviting external stakeholders to facilities or events where they can engage with employees is also viewed as an effective way to give voice to this increasingly important group.

GOVERNMENT / POLITICIANS

Despite being considered a traditional stakeholder audience, many corporate communicators report that politicians are increasingly important to them. As with the public and NGOs, some politicians are also increasingly vocal and impactful through their use of social media platforms, and occasionally the views shared on such platforms can be disruptive, damaging and misleading;

Government has gotten more vocal. They were always important, but now they’re very reactionary, so you have to be able to anticipate what they will be reactionary about.”

Customers [are] more informed and empowered, but sometimes they do not have enough information to analyze properly. Politicians are taking advantage of some distorted information in an opportunistic and populist way.”

Politicians’ ability to determine license to operate is also cited as a key consideration, with corporate communicators working hard to ensure their company’s views are heard in policy and regulatory discussions;

We actually don’t want to be the one that the politicians have in their sights, but we do want to make sure that we’re at the table contributing to the policy discussion.”

Council members note that the importance of politicians ebbs and flows depending on elections and other key political events. During a normal election cycle, the work of corporate communicators is strategic and deliberate, whereas when things are more unpredictable at election time “there is almost no point… because there is going to be such a huge turnover…when we get through the election there is a huge task to be done in terms of mapping your stakeholders and working out where the balance of power lies and where we need to focus.” With increased political uncertainty around the globe, communicators are having to adapt and evolve their approach for engagement with this important group.

MEDIA

In contrast to views about politicians, there is much less consensus when it comes to the media. Council members are split on the importance of this group, being just as likely to say it’s on the rise as to say it is diminishing. Some feel that the media continues to be a key channel of information that can be used to communicate a company’s message;

I wouldn’t underestimate the relationship with traditional media either, you do so at your peril. We try to invest in the right amount of time with various traditional media audiences…they are important allies for us.”

However, others feel that while traditional media continues to be important, its influence is less than in the past, largely due to the growth of social media and online sources of information;

They are still important, but I do think they are less influential than they used to be, definitely they take up less of my time than they would have done 5-10 years ago. There are just a lot of sources now online where people use and reuse content and they just don’t necessarily want to pay for it.”

To a large extent, the perceived importance of the media will vary from across sector, issue and outlet. For communicators in today’s environment, the key is knowing which media voices have influence on the issues that matter to your organisation and targeting engagement efforts accordingly.

Considering the growing voice of the public, we asked Council members how they go about engaging with this audience. Members highlight the need for a targeted approach, where budgets allow:

I think it’s fundamental to have a specific approach for each audience. Specific to different segments…To move away from something generic and closer to particularities.”

This doesn’t necessarily mean that different parts of the general public will receive different messages; in fact, often the messaging across audiences will be aligned, but the formats and channels of delivering the messaging will vary by audience;

We tailor messaging to each audience; however, we have core messaging that our messages all ladder from to create unique messages.”

While it is common practice for brand and marketing functions to tailor communications towards their core target customer audience, corporate communicators are also increasingly taking a targeted approach in their communications with the public. While the concept of the engaged citizen and early adopters is not a new one, it is especially relevant as a means of concentrating messaging towards a group of people who are most likely to absorb the messaging, react to the messaging, and influence the views of others. Understanding the views of these engaged publics can also act as an early indicator of future trends, as they are more likely to be ahead of the curve in terms of their views, awareness of issues, and behaviour;

These are the engaged, interested, active people within their local communities and the broader industry circles. If we can reach them, and if they can understand what we’re doing, then that helps create grounds for them.”

However, as one Council member points out, it is important to identify and understand the characteristics of the most engaged segment of the public, and to do so regularly as their profile can change over time;

The difficulty is in identifying them because they are not the same as they were 20 years ago, 10 years ago, now. So being able to identify the right slice of humanity that can give information in advance, and then gain time for companies. It’s a difficult task.”

Closely aligned with the increased need to treat the engaged public as a core stakeholder group, is the growing importance of social media influencers;

Very important, an extremely important audience because they really have the power to influence both consumption and behaviour. And they influence both from the point of view of selling our products and advancing our causes. Digital influencers are extremely important. I think the digital influencer will gain even more relevance.”

When engaging with social media influencers, Council members talk about how they first go about identifying and selecting a small pool of highly relevant and influential individuals;

It is about the quality of audience really, are we talking to the right people.”

The conversation shouldn’t be one-way. While some focus on engaging with influencers as a catalyst or ambassador to get messaging across, it is also worth listening to what influencers and their followers have to say. As a member states, this can lead to exceptional levels of insight;

I have been working with 10 or 15 micro influencers who might have less than 1,000 followers and actually their network can be exceptionally interesting as well because you get some very rich in-depth engagement with some very interesting insights.”

However, not all corporate communicators engage with social media influencers. Some feel that the financial costs are too great or that social media influencers are “less impactful now”. One Council member also warns of the danger caused by interacting with such influencers, pointing to the risks of handing over control of your reputation to social media ambassadors, and emphasising the need for careful monitoring when going down this route;

Every time you interact with someone, you create a contract with someone, you are transferring the responsibility to that person. In other words, I would need to closely monitor the integrity, the behaviour of my ambassadors.”

Similarly, it is important to underline the fact that Council members are far less likely to name social media influencers as an increasingly important stakeholder group than they are to name other audiences such as employees, politicians, the wider public and NGOs. Indeed, while social media has undoubtedly been a driver of change, Ipsos Corporate Reputation’s experience of working with stakeholder audiences highlights that direct engagement remains the most effective way to ensure a voice on your key issues.

CONCLUSIONS

The increased breadth and influence of the stakeholder audiences with which communicators must now engage highlights the fact that building and protecting corporate reputation is a complex challenge. Communicators need to be adept at determining the difference between noise and influence, with resources directed accordingly to ensure effective relationships are built with the stakeholder groups that matter most. In mapping out their stakeholder audiences, the relative importance of each group should be determined by its level of influence over the issues affecting an organisations’ reputation, rather than the channel through which the influence is created. This is reflected in the experiences of Council members where traditional stakeholders are given as much consideration as emerging influencers. As technological change continues to give voice to new audiences, the ability to map, understand and prioritise stakeholder audiences will become increasingly important in determining corporate communications success.

Reputation on the rise: Safeguarding your brand reputation through investment in cyber security

There is a difference, it seems, between knowing something and really knowing something. As a professional of 15 years’ experience in the brand reputation space there are a number of issues that I have to talk to clients about again and again, where it is clear that the people I am speaking to know, and largely agree with, what I am saying… but then either fail to take the appropriate action or come back and ask the same question a year or so later. There are a number of these issues; whether general public marketing affects the opinions of politicians is one, as are questions about how to improve trust.

One that is perhaps less obvious a question is the importance of cyber security to reputation. However, it is a topic that has come up frequently over the years, both from clients asking about it through to Ipsos writing articles and thought pieces on the subject. Myself and colleagues wrote about the cybercrime threat to reputation back in 2016 and 2017, and warned that businesses were perhaps overconfident and underprepared for the risks posed by cybercrime in both 2018 and 2019.

Nevertheless, we still got the sense that despite our clients knowing that cybersecurity is a potential threat to their hard-worn corporate reputation, they somehow didn’t really take it seriously. I get that IT is less sexy than marketing and events when it comes to reputation management, but it is certainly as important. Losing data on a large scale strikes a blow against any company’s ability to portray themselves as competent, well managed or trustworthy.

Nearly 9 in 10 senior industry leaders invest in cyber security to protect the reputation of the companies they work for. It’s high time you joined them.

Bearing all this in mind, I was enthused to see data in Ipsos’s 2020 Captains of Industry survey that seems to indicate senior business leaders are not only cognizant that cybersecurity is important from an operational perspective but also from the point of view of reputation management.

When asked directly to give the main reasons for investing in cybersecurity, nearly nine in ten Captains of Industry said that it was “to protect our reputation”, with 30% saying that it was the most important reason. Only business continuity was more important. This is a huge endorsement of cybersecurity as a reputational shield, and one that is being embraced by business leaders themselves rather than being forced upon them by shareholders or customer demand (the more traditional triggers for investment in cybersecurity).

Given the importance of reputation – it is now the third ranked factor that Captains of Industry look for when judging an organisation – the way cybersecurity is being directly linked to reputation is huge positive and suggests that business leaders (and my clients) are beginning to understand its importance. I would even go further and suggest that cybersecurity not only protects a firm’s reputation, but it also safeguards its financial performance and perceptions of the quality of its management, the top two factors listed by Captains of Industry when judging a company or organisation.

While I am under no illusion that questions about the importance of cybersecurity to reputation are going to go away, hopefully these results indicate that we have reached a tipping point and that soon cybersecurity will take its place alongside the other recognised and respected tools of reputation and brand managers.

For more information please contact:

Carl Phillips
Director & Global Stakeholder Research Lead
Corporate Reputation,
Technology Sector

Carl.Phillips@ipsos.com

Fashion Victims: The Losers in the Fast Fashion Race

What can comms. leaders learn from the challenges facing companies in the fashion Industry?

The fashion industry has been under the spotlight recently for all the wrong reasons. The industry is going through a period of rapid change, brands and retailers are increasingly exposed to Environmental, Social and Governance (ESG) issues in their supply chains, resulting in an intensified threat to reputation. Just last summer Boohoo was caught up in allegations around poor working conditions and allegations of paying employees in their supply chain below the minimum wage.

The restrictions imposed on consumer life throughout the COVID pandemic have acted as a rare speed bump on an industry that has otherwise been evolving unabated at a frightening pace. Ipsos Sustainability Monitor (SBM) 2020 data reveals that over half of consumers (55%) are buying less clothing than they were pre-pandemic. With the world on pause we ask what’s next for the fashion industry? How do brands best navigate these issues? How engaged are consumers in these issues? And what can comms leaders, across all industries, learn from the challenges being faced by the fashion industry?

Fast Fashion: a quick overview

Fast Fashion: “Inexpensive clothing produced rapidly by mass-market retailers in response to the latest trends.”

Since the late 90s, globalisation has opened-up Western markets to cheaper labour in the East. Cheaper clothing and ever shortening fashion cycles (including the development of the weekly ‘micro season’) means that clothing production doubled between 2000 and 2014, while the average number of garments purchased by the average Western consumer increased by 60% (McKinsey).[1]

Fast fashion is fuelled by celebrity culture, fads and the 24/7 nature of social media. SBM 2020 data shows that three-quarters of consumers agree that clothing and fashion are becoming cheaper and more throw-away in nature. And while just 14% of consumers say they feel under increased pressure to keep up with the latest trends and fashion, this rises to 24% among the youngest group (18-34 year olds). The fashion industry (and fast fashion in particular) are associated with serious ESG issues, outlined below.

Figure A) ESG issues typically associated with fast fashion (and the wider clothing industry)

  • Environmental issues: The fashion industry is considered by the UN Conference on Trade and Development (UNCTAD) to be the second largest polluter in the world, after the oil industry (UN)[2]
  • Social issues: Forced/ slave labour, child labour, dangerous working condition… The Clean Clothes campaign reports wages in Eastern markets are typically a fifth of average living wage there.[3] Average working days are 14-16 hours, 7 days per week (Clean Clothes Campaign)[4]
  • Governance issues: Overproduction is a massive issue. More than half of fast fashion produced is disposed of in under a year, (McKinsey)[5] with consumers keeping clothing on average half as long as they did 15 years ago

1) Ethical considerations and the impact on purchasing behaviour

ESG issues around fast fashion and the clothing industry have been widely reported. As consumer awareness grows, we might speculate that ethical considerations will come to take on more importance in the minds of consumers. But how much impact do ethical considerations have over clothes purchasing decisions?

When it comes to what actually drives clothes purchase decisions, the more conventional levers such as price style and quality hold the most sway. None-the-less almost a third of consumers say that ethical issues are one of the top 3 factors that influence their decisions over clothes purchases (and 8% say that it is their primary consideration).

In the era of fast fashion it is perhaps surprising that ‘trends’ (keeping up with friends, celebrities, social media and advertising) is the least selected factor influencing clothes purchases. Caveats should be applied (the results are self-reported and people might underplay the amount of influence trends hold on them, the sample is 18+, missing a key demographic target for fast fashion, teenagers). But the result does suggest that fast fashion is concentrated not only in small proportion of the worlds markets (Western markets) but also within a small proportion of the population within those markets. A small number of people are likely to be responsible for a lot of clothes purchases. While 30% of consumers say they buy more clothes than they need, this rises to 42% among those that say ‘trends’ are a top 3 influencing factor, and 55% among those that say that ‘trends’ are the primary influence on their clothes purchases (SBM data 2020).

#1. Know your customer: For 3-in-10 consumers ethical issues are a key decision-making criterion in what clothes they buy. Whether your business is in fashion or elsewhere, there is clear reputational risk in not being aware of, or not fully understanding what motivates and what matters to your customers.  

Chart B: Ipsos SBM data 2020: Clothing and fashion purchase decisions

2) Consumer disconnects over ethical issues

What consumers want they don’t necessarily get

Ethical issues play an important secondary role in clothing purchase decision making but what action do consumers think should be taken? Four-in-five consumers agree that brands and retailers should do more to help protect the environment and safeguard workers’ rights within their supply chains, and 77% of consumers say that clothing brands and retailers should provide more information. However, there is a large disconnect between what consumers want and what they get. Just 17% of consumers agree that the fashion industry provides enough information about the environmental and social impacts of the manufacturing of clothes.

Consumer good intentions not necessarily reflected by their actions

When it comes to taking personal action, although 56% of consumers say that if a clothing brand was associated with environmental pollution in its manufacturing process, they would be putting off from buying clothing from that brand, just 28% of consumers have researched brands that provide ethical clothing.

#2. Be transparent: As globalisation has increased the complexity of supply chains in the fashion industry, it’s becoming harder for many brands and retailers to maintain transparency. Whether your business is in fashion or elsewhere, consumers want to be able to make informed decisions, they want to be provided with clear and complete information (and they probably expect you to do at least some (if not all) of the legwork).

Chart C: Ipsos SMB data 2020 & Ipsos Sustainable Fashion Survey 2018 data: The disconnect between consumer good intentions and their actions

3) What's to be done?

Consumers clearly want more ethical accountability from brands and retailers. But by what means do they want this delivered? In 2019 the Environmental Audit Committee (EAC) published its “Fixing Fashion Report”[6] making 18 recommendations to the government to help clean up the industry, including;

  • Mandatory environmental targets for fashion retailers with a turnover above £36 million
  • More proactive approach to enforcement of the National Minimum Wage with greater resourcing for HMRC’s National Minimum Wage team to increase inspection and detection work
  • The Government should publish a publicly accessible list of retailers required to release a modern slavery statement. This should be supported by an appropriate penalty for those companies who fail to report and comply with the Modern Slavery Act

The Ipsos SBM 2020 survey tested what level of consumer support there would be for clothing and fashion brands and retailers that adopted similar commitments through their own volition. Across the 8 statements tested by the SBM survey (see chart D) between 67% and 78% of consumers said that the measures would make them feel more positively about a clothing brand or retailer. Commitments to national minimum wage (43%) and proof of compliance with the Modern Slavery Act (40%) had the most ‘much more’ positive impact. There are notable differences by demographics.

18-34 year olds are much more likely to say that they would be ‘much more’ positive about brands across all of these measures:

  • 44% of 18-34 year olds said they would be much more positive about brands that set themselves environmental targets compared to 24% of 55+ year olds
  • 44% of 18-34 year olds said they would be much more positive about brands that made commitments to using sustainable materials compared to 28% of 55+ year olds

Women are also much more positive across all of the measures:

  • 46% of women felt much more positive about stores that set-up in-store schemes to help customers recycle their old clothes compared to 30% of men
  • 40% of women felt much more positive about brands that helped to reduce textile waste compared to 25% of men

Women and millennials with disposable income form a key target audience for the fashion industry. As ethical and ESG considerations climb up the agenda they are likely to hold more influence over brand reputation and consumer purchase behaviours. If your clothing range is targeted at younger consumers and women in particular, then commitments to the environment and the wellbeing of employees in your supply chain is quickly transitioning from a nice-to-have to a necessity.

#3. Collaborate with your customers: There is clear support for measures that help clean up the fashion industry and reputational rewards are available for brands that adopt similar commitments. Whether your business lies in fashion or elsewhere it pays reputationally to align your business’s commitments to those of your customer. Take pride in your commitments and collaborate with your customers.

Chart D: Ipsos SBM data 2020: Impact of brand and retailer ethical commitments

4) Conclusion & Recommendations: An opportunity to build brand reputation

Fashion at its heart is an outlet for self-expression, choice, freedom, communication, it’s a vehicle to bolster confidence, for consumers to feel good about themselves. Exploitation and corporate greed aren’t a great look for brands trying to make their customers feel good about themselves. And there’s evidence that fashion brands are starting to take a long hard look in the mirror.

Model examples   

  • Sustainable materials & Slow fashion - H&M offers a new ‘Conscious’ range. To qualify the product must contain at least 50% sustainable materials e.g. organic cotton or recycled polyester. Levi’s ‘Water<Less’ collection uses up to 96% less water in its denim production. Patagonia only uses sustainable materials in their outwear. They champion “slow fashion” by helping customers repair garments and encouraging customers to recycle and buy second hand
  • Circular economy – TK Maxx ‘Give Up Clothes for Good’ campaign has recycled 1.6m bags of clothing since 2004. They also have a zero waste to landfill target. M&S ‘Shwopping’ partnership with Oxfam 30million garments swapped and £21million raised for people living in extreme poverty. The circular economy is based on reusing and recycling materials rather than throwing them away
  • Codes of conduct – TK Maxx operates a ‘vendor code of conduct,’ committing vendors to use no child or forced labour, protect employee rights on wages, working hours and adhering to health & safety regulations in the workplace

Whether or not we see a return to business as usual on the high street as COVID-19 subsides, consumers are expecting more from businesses and brands, challenging them to perform a social purpose beyond simply turning a profit. This increased scrutiny presents a risk certainly, but with it also a growing opportunity. Ipsos Corporate Reputation Centre has 40 years’ experience in helping global businesses navigate reputational challenges.

Ipsos Recommendations

1) Know your customer – understand what issues concern them and to what extent it concerns them. How does this impact how they perceive your brand?

2) Transparency & third-party endorsements – good brand reputation is built on trust. Third party endorsements such as the Fair-Trade Foundation and the Impact Report are a means to showing your customers that you care and take their concerns seriously. Avoid shortcuts and greenwashing and practise what you preach.

3) Collaborate & take pride – show consumers that you are on their side, that you want to make life easier and more straight forward for them and that you can help bring clarity, speed and convenience to the purchasing decisions that they care about. Collaborate and work in partnership with customers towards shared goals.

Article links

[1] https://www.mckinsey.com/business-functions/sustainability/our-insights/style-thats-sustainable-a-new-fast-fashion-formula

[2] https://news.un.org/en/story/2019/03/1035161

[3] https://www.sustainyourstyle.org/en/whats-wrong-with-the-fashion-industry#anchor-environmental-impact

[4] https://www.sustainyourstyle.org/en/whats-wrong-with-the-fashion-industry#anchor-environmental-impact

[5] https://www.ellenmacarthurfoundation.org/assets/downloads/publications/A-New-Textiles-Economy_Full-Report.pdf

[6] https://publications.parliament.uk/pa/cm201719/cmselect/cmenvaud/2311/2311.pdf

For more information about how Ipsos can help you, get in touch:

Tom Cox
Research Manager
Corporate Reputation, Consumer Sector

Tom.Cox@ipsos.com