Your Bottom Line is Showing: Why reputation management matters to Investor Relations


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One tweet or blog can impact your greatest asset: your company’s reputation. With the power to break your bottom line, reputation management is more important than ever. Case studies from RioTinto Alcan and CGI demonstrate why social media monitoring should be part of the modern IRO’s daily routine.

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Your Bottom Line is Showing: Why reputation management matters to Investor Relations

  1. 1. Your Bottom Line is Showing Why reputation management matters to Investor Relations Carolyn McGill-Davidson President & CEO CNW Group
  2. 2. Reputation <ul><li>Reputation is the degree of trust, admiration, esteem and good feeling that stakeholders have for a company. </li></ul><ul><ul><ul><ul><ul><li>- The Reputation Institute </li></ul></ul></ul></ul></ul>“ ”
  3. 3. Reputation <ul><li>Reputation and your bottom line </li></ul><ul><li>Reputation capital constitutes up to 63% of the average company's market value </li></ul><ul><li>On average, 20% of a company’s sales can be explained by reputation </li></ul>
  4. 4. The web has changed everything <ul><li>Consumer behavior </li></ul><ul><li>News creation – The New Newsroom </li></ul><ul><li>The investment community </li></ul><ul><li>Investor decision making </li></ul>
  5. 5. How often do you use social media outlets to research products and services before making a purchase? At least Occasionally 61% <ul><li>Because users find social media to be believable, it is not surprising that they choose to use this venue as a source of information about products and services before making a purchase decision. Three-fifths do so at least occasionally and three-in-ten do so most of the time. </li></ul><ul><li>Regionally, Quebecers are more likely to use social media for research at least occasionally (71%). </li></ul>Base: Users n=1516 Users are Turning to Social Media for Researching Purchases
  6. 6. Social media reaches mass adoption Source: North American Technographics® Interactive Marketing Online Survey, Q2 2009 (US), North American Technographics Media And Marketing Online Survey, Q2 2008, and North American Social Technographics Online Survey, Q2 2007. Forresters Research, Inc. Base: US online adults
  7. 7. The Past
  8. 8. The New Newsroom
  9. 9. The web has changed the newsroom <ul><li>There are no deadlines anymore. The concept of a deadline is something that was oh, so six months ago. The deadline is now . </li></ul><ul><li>David Akin, National Affairs correspondent, Canwest News Service ( currently Sun Media National Bureau Chief, Ottawa) </li></ul>“ ”
  10. 10. The web has changed the newsroom <ul><li>You can’t sit back and relax. The deadline is now and now and now and now. And it’s a constantly evolving story. </li></ul><ul><li>Scott Anderson, Editor-in-Chief, Canwest News Services </li></ul>“ ”
  11. 11. The web has changed the newsroom <ul><li>The metabolism of media has been sped up to the point where you don’t have hours to respond. You have minutes. Things can go from molehills to mountains instantaneously. </li></ul><ul><li>Mathew Ingram, senior writer GigaOm blog network. </li></ul>“ ”
  12. 12. <ul><li>Investors can no longer be considered just stock buyers. They are consumers and business buyers – of technology, energy products and everything else that a company sells – and probably great communicators when they buy something they like. They rely on media as a primary source of information to guide their purchase, whether it is a position in a company or the widget that a company products. </li></ul><ul><li>Miri Segal & Henry Feintuch, IR Alert </li></ul>“ ”
  13. 13. <ul><li>Institutional investors take the time to troll around social media outlets and in many cases might prefer to get the sort of raw opinion of somebody inside a company who may be writing something on Facebook or posting something to a message board because it’s unfiltered. </li></ul><ul><li>Lorne Gorber, Vice President, Global Communications and Investor Relations, CGI </li></ul>“ ”
  14. 14. Social media is blurring the lines of IR & PR The new reality
  15. 15. On the web, good news spreads fast. Bad news spreads faster. <ul><li>Motrin Moms </li></ul><ul><li>On November 16, 2008 a blogger offended by a controversial online video promoting Motrin for mothers set off a wave of online discussions </li></ul><ul><li>Within two hours of the post, anti-Motrin comments were the most popular topic on Twitter </li></ul><ul><li>Less than 24 hours later, Motrin pulled the ad from its website and posted an apology from their VP of Marketing </li></ul>
  16. 16. <ul><li>Today, many business leaders are again asking the wrong question: ‘What will social media do for us?’ instead of ‘What will social media do to us?’ </li></ul><ul><li>Augie Ray, Senior Analyst of Social Computing, Forrester Research </li></ul>“ ”
  17. 17. <ul><li>In today’s environment, markets react quickly to both positive and negative news, and public companies need to be in a position to respond quickly. Time was, companies were only concerned about a 24-hour news clock and responding by the end of the day. In today’s environment, an accurate statement is required as soon as possible – with regular updates – in order to stay on top of the story. </li></ul><ul><li>Frank Switzer, Sun Life Financial </li></ul>“ ”
  18. 18. <ul><li>We are aware of the potential impact on our reputation from tweets and blogs, both positively and negatively. We monitor all mentions of Sun Life and bring any issues to the right place in the organization, while being mindful of the confidentiality of our clients’ business. </li></ul><ul><li>Frank Switzer, Sun Life Financial </li></ul>“ ”
  19. 19. <ul><li>Solutions to reputation risk start with locating existing risks for the business and then understanding the impact on reputation if these risks occurred. An early warning system that identifies and possibly prevents potential problems as well as communications and contingency plan are the most effective ways of addressing reputation risk. </li></ul><ul><li>AON Global Risk Management Survey, 2009 </li></ul>“ ”
  20. 20. Reputation Management <ul><li>An effective reputation management program enables business leaders to: </li></ul><ul><li>Have real-time access to information and conversations </li></ul><ul><li>Respond quickly and confidently to negative reports propagated anywhere </li></ul><ul><li>Assess shareholders, customers, partners and other stakeholders to determine levels of satisfaction, investor sentiment and matters requiring improvement; </li></ul><ul><li>Anticipate best and worst case scenarios </li></ul><ul><li>Plan, develop and adjust strategies </li></ul>
  21. 21. <ul><li>I think companies should be monitoring and should be aware of what’s being said about them, because a lot of the time you can shut down a rumour very quickly if it is, in fact, not true, or at least deal with it in a relatively timely manner. The broader story of what social media is going to mean to businesses. </li></ul><ul><li>Andrew Willis, The Globe and Mail </li></ul>“ ”
  22. 22. <ul><li>Your reputation is who you are. Perception to the external world is reality. So it’s one to manage, or to monitor, what is being said about you. It’s another thing to take that information and to do something with it, to act proactively. </li></ul><ul><li>Bryan Tucker, Media Relations, Rio Tinto Alcan </li></ul>“ ”
  23. 23. <ul><li>Any good communications professional who’s at a company and seeing what people are saying about them on Twitter or Facebook should be able to see where the stories are going, should be able to get one step ahead, get the talking points ready, sit the CEO down, tell him to shut up, whatever needs to be done. I think that yes, you need to be there as a communications person in a company and you need to be paying attention because you can see where the media is going to be a few steps ahead. </li></ul><ul><li>Boyd Erman, The Globe and Mail </li></ul>“ ”
  24. 24. The new reality of reputation management <ul><li>Seven things your company can do </li></ul><ul><li>Be proactive </li></ul><ul><li>Improve customer support </li></ul><ul><li>Listen </li></ul><ul><li>Participate </li></ul><ul><li>Respond </li></ul><ul><li>Move faster </li></ul><ul><li>Realize everyone is a marketer </li></ul><ul><li>Augie Ray, Forrester Research </li></ul>
  25. 25. Resources <ul><li>‘ Safeguarding Reputation’ – Webber Shandwick </li></ul><ul><li>Millward Brown’s Corporate Reputation Study, January 2007 </li></ul><ul><li>AON Risk Management Survey, 2009 </li></ul><ul><li>Social Media Reality Check </li></ul><ul><li>North American Technographics Interactive Marketing Online Survey, Forrester Research </li></ul><ul><li>Break Down the Walls: The Advantages of True IR & PR Integration , Miri Segal & Henry Feintuch, May 10, 2010 </li></ul><ul><li>Motrin Moms Backlash by the Numbers , Web Strategy by Jeremiah </li></ul><ul><li>Seven Things Your Organization Must Do Because of Social Media , Augie Ray, Forrester Research Blog </li></ul>