Sunday, July 01, 2007
If Wal-Mart Had The Reputation of Target…
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How much can brand reputation affect corporate valuations? It can total a significant amount according to a Business Week article backed up by research from Communications Consulting Worldwide (CCW). According to CCW, if Wal-Mart had the reputation of its rival Target, its market valuation would increase by almost $10 billion dollars. Brand Autopsy has compiled the chart above to illustrate comparisons from the Business Week article.
Because brand reputation can have such a significant effect on the bottom line, Business Week points out that many firms now spend over $2 million per year to monitor stories and reactions that can influence consumer sentiment about their brands. This has created a new classification of service firms that are devoted to measuring brand reputation and developing strategic recommendations to enhance that reputation.
With the growth of social networks and consumer generated media, this job has become more difficult. It was one thing to monitor stories when the principle source of information for most people was mainstream media, but with the explosion of communications made possible with blogs, Twitter, MySpace, Facebook, LinkedIn, and other communication networks, reputation monitoring has taken on a new degree of complexity. But if CCW’s research is any indication, the effort and cost to monitor and manage brand reputation in today’s diverse communications environment can pay huge dividends that are well worth the investment.
