TWO THIRDS OF CANADIANS SAY CORPORATE REPUTATION SIGNIFICANTLY IMPACTS THEIR
BRAND CHOICE, STUDY SHOWS

Negative corporate reputation puts sales to three quarters of potential customers at risk

Younger Canadians more ambivalent to a company's reputation when selecting a brand than boomers

TORONTO, Sept. 1 /CNW/ - Two thirds of Canadians say that corporate reputation significantly impacts their brand choice, according to a new Bensimon Byrne Consumerology Report released today. And while corporate reputation clearly affects the majority of Canadians, it resonates most with boomers - three quarters of whom (over the age of 55) indicated they are heavily influenced by corporate reputation when making purchasing decisions, with women over 35 the most socially conscious. Female boomers in particular have high expectations of companies and place greater importance on the transparency of a company's operations and crisis management.

Each quarter, the Consumerology Report tracks consumer opinions about the economy, individual financial expectations, consumer spending intentions, and attitudes toward key national issues. Commissioned by the Toronto-based advertising agency Bensimon Byrne and its subsidiary, Narrative Advocacy Media (which leads all social marketing campaigns within the agency) and conducted by The Gandalf Group, the primary purpose of this edition was to understand the impact of corporate social responsibility and social media on the attitudes and behaviours of Canadian consumers.

"In addition to learning definitively that corporate reputation matters to Canadians when it comes to brand choice, we saw that corporate social responsibility is especially essential to ensuring brand reputation in times of crisis," said Amanda Alvaro, Managing Director of Narrative Advocacy Media. "This edition of the Consumerology Report exposed the serious consequences a negative corporate reputation has on business. In effect, it puts sales to three quarters of potential customers at risk, almost guaranteeing the loss of one in five customers - even if they like the product or service being offered. In women over the age of 35, this rises to one in four customers at risk of switching brands."

Companies wise to ensure core business is solid, then explore CSR

While positive social responsibility initiatives can help establish a good corporate reputation, Consumerology uncovered that, first and foremost, companies must ensure that they do their business well in order to impact and protect their reputation - meaning a company's core business needs to deliver on what it promises. Only after the business is delivering what it promises in terms of its products or services will social responsibility initiatives be a major factor in building a positive corporate reputation.

In addition to the importance on focusing on a business' core product or service, the report found that over three quarters of Canadians rank the offering of attractive products or services at good value as the core-defining element of a favourable opinion of a company - again showing that before a company engages in any kind of social responsibility programs or initiatives - they are wise to have their core business in order.

Other elements that matter to Canadians when forming an opinion of a corporation include: whether the company creates local jobs (59 per cent of Canadians say that creating jobs locally leads to a more favourable view of a company); and that the company is a Canadian-owned business (56 per cent of Canadians say that being Canadian-owned is an advantage to corporate reputation).

Role of CSR in Marketing Strategy: Exploring Untapped Causes

The Consumerology Report highlights several opportunities available to marketers in order to engage and build brands on a more local level - a key factor in what makes for a good corporate citizen. Corporations looking to make an impact in the community should focus on maximizing employment and on helping to improve the local environment. If a company is considering investing in local infrastructure, they are wise to consider funding the local hospital, as this is of high importance to over half of Canadians surveyed.

Other causes that have less awareness via social marketing efforts but are just as important to Canadians include: environment conservation in wilderness areas (very important to 38 per cent of Canadians), organ donation (37 per cent), and street safety (36 per cent), followed by providing shelter and assistance for victims of domestic violence (34 per cent).

"Our data shows that CSR is clearly a critical component of brand building, and also reveals that there is unchartered territory to engage in exceptional social responsibility initiatives that will resonate with the public," said Alvaro.

While high-profile causes such as finding a cure for breast cancer and a solution to climate change continue to rank extremely important to Canadians, these issues have reached a level of public saturation that may deter marketers from joining their cause.

Younger Canadians and CSR

Another interesting finding in the report is that while over three quarters of Canadians over the age of 55 indicated they are heavily influenced by corporate reputation when making purchase decisions, only 16 per cent of Canadians under 30 say that a company's reputation plays a very important role when selecting brands or services. Equally interesting but not surprising is that when they are seeking information about a company, younger Canadians are much more likely to turn to online sources than older Canadians, with 64 per cent of Canadians under 30 finding online news sources very or somewhat important when forming an impression of a company. In addition, the report revealed that young Canadians are quite aware of social causes today, but are not committed to any one particular issue.

"This report provides a revealing insight into the shift in young Canadians' advocacy behaviour and views on social responsibility," said Alvaro. "The findings show that today's youth are more ambivalent to corporate social responsibility than their parents are. It seems more likely that the average 22-year-old would rather tweet, change his Facebook status or send a donation via smartphone to show his support for a cause, rather than participate physically in a youth-led march or sit-in." Digital media seems to have given rise to a new form of activism - slacker activists, dubbed recently as 'slacktivists'.

And while this may be the case, we need not dismiss slacker activists simply as unwilling to support a cause. "The key is how do we get these 20-somethings who change their Facebook status line to actually become more actively engaged in a cause, donating perhaps time or money. The world of social media has opened the door to this whole new segment of supporters - the challenge for marketers now is to mobilize this generation and engage them on a long-term scale to support their online activism," said Alvaro.

Additional Findings

    
    -   Job one of a good corporate citizen is to handle a product problem or
        recall with transparency and accountability. Eighty per cent of
        Canadians rank this as the top measure of good corporate citizenship.
           -  Amongst women and those over 55, doing good on a local level
              and reflecting community values becomes increasingly
              significant.
           -  Middle aged men care most about local efforts for the
              environment and local job creation.
    -   Canadians under 35 are less concerned about whether a company is
        Canadian-owned than older generations are.
    -   One third of Canadians visit a company website specifically to
        research their practices and ethics.
           -  Canadians under 35 are the most likely to be influenced by
              online sources, with slightly over one third of them saying
              they could be persuaded by messaging online to change their
              behaviour.
    -   While men under the age of 35 will take a company's reputation into
        account, they are the least likely to become biased towards a brand
        because of it.
           -  Women are more impacted by negative corporate reputations, with
              80 per cent saying that they are likely switch to the product
              or service of a competitor.
    -   When it comes to where Canadians get information about companies,
        word of mouth from friends and family is the most important source of
        information.
           -  Traditional media sources such as TV and newspapers are more
              important to Canadians over the age of 55, while online news
              sources rank higher amongst those under 35.
           -  Social media influences about a quarter of the population.
    -   Three quarters of the primary household shoppers, women 35-54, are
        particularly attentive to unfavourable brand reputations, resulting
        in a higher likelihood to switch brands.

    About the Survey
    ----------------
    

The Bensimon Byrne Consumerology Report is a quarterly survey commissioned by Toronto-based advertising agency Bensimon Byrne, and its subsidiary Narrative Advocacy Media. This quarter's survey was conducted by The Gandalf Group amongst 1,500 Canadians. The questionnaire was conducted in French and English over the period of July 6-13, 2010. The Consumerology Report yields a margin of error of +/- 2.43% 19 times out of 20. Previous editions of the Consumerology Report have covered a variety of topics including: The Impact of Macro-economic Trends; The Impact of Environmental Issues; New Canadians, New Consumers; and Economic Trends and Consumer Behaviour.

The full Consumerology Report on Corporate Social Responsibility, as well as all previous reports, are available for free download at www.consumerology.ca

    
    About Bensimon Byrne
    --------------------
    

Bensimon Byrne is a privately owned, full-service, Canadian advertising agency. Established in 1993, the agency has worked with a host of blue-chip companies and brands, producing some of Canada's most effective and memorable advertising.

    
    About Narrative Advocacy Media
    ------------------------------
    

Founded in 2007, Narrative Advocacy Media is a new kind of communications agency that develops communication strategies to manage, shape and anticipate public opinion. The firm has already doubled in size since its inception and has a diverse base of award-winning accounts for clients in sectors including financial services, automotive, government, health, telecommunications, and not-for-profit charities. Housed within Bensimon Byrne, Narrative Advocacy Media can provide end-to-end services from creative development to digital media to production. To learn more visit www.narrativeadvocacy.com

For further information: or to arrange an interview, please contact: Tricia Soltys, Narrative Advocacy Media Office: 416-644-4128/Cell: 416 509-0955, Email: [email protected]