When what you do for a living is difficult to explain to your relatives, it can be tough some days to keep reminding yourself that your work matters and makes an impact. Since our agency has a very bottom-line-oriented approach to PR, we constantly set metrics and monitor how we are doing so we can tweak our clients’ messages and revise their rollout plans for maximum return. It was gratifying to see the excellent writeup of our FH colleague Peter Verrengia’s new reputation management consulting venture, CCW, in a recent BusinessWeek. Describing the work this company has done for UTC, the article went on to describe the CCW approach itself:
Call it the new science of reputation management. Corporations have long used sophisticated statistical models to predict everything from how much a new production process would hike efficiency to how much more soap can be sold with an additional $100 million in advertising. But a company’s reputation among investors, customers, and the general public traditionally has been regarded as too squishy to measure with hard numbers or manage with any precision, let alone to prove cause and effect.
I saw an early presentation of CCW’s approach at an FH-sponsored meeting last year and was very impressed by the solid data analysis it provided communications pros who are trying to determine how to help companies improve, rebuild or revive their images. Their work for UTC influenced the company’s ad strategy and messaging and they are happy with the results.
CCW’s Low and Cohen have spent more than a decade developing ways to measure intangible corporate assets, especially reputation factors that can affect the bottom line. "There are plenty of data measuring the visibility and credibility of a company," says Low. "But there have been no data showing how communications adds value to a company." Says corporate communications professor Paul A. Argenti of Dartmouth’s Tuck School of Business, also a CCW partner: "If we can get this right, we have found the holy grail of communications."
The method works like this. Cohen first takes data on a company’s daily stock movements for a certain period, say two years. She then collects data on its financial disclosures and economic conditions at both the national and industry level. She runs a statistical model to determine how much of the stock movement is due to financial performance and how much to outside factors such as the economy.
After adjusting for these influences, she loads in less obvious factors. Drawing on reams of data on media coverage, opinion surveys, investor interviews, the company’s public statements, reputation rankings in magazines, and other sources, she runs through several dozen reputation-related issues to see if they move the stock. Do messages about the company’s employee relations, governance, or environmental efforts have impact, for example? If so, how many cents per share can be explained that way?
Of course there is skepticism about this type of data-based PR truly impacting a company’s reputation. The results that have been achieved so far are impressive and the logic of the technique seems very sound. It just seems like a no-brainer for the largest brands in the industry.
But even the smaller and mid-cap companies should take heed and recognize the potential impact that real strategic public relations can have for your brand, based on solid analysis of where your company is in the marketplace right now versus your competitors and in the minds of your employees and the potential public market you intend to enter or have entered. PR is not just about churning out press releases and setting up meetings with influencers. Used strategically, PR can be your secret competitive weapon.