Blog 10 July 2020

In Act Two of COVID-19, Understanding Businesses’ Reputation is More Important Than Ever

At our first Kekst CNC focus group, broadcast on Times Radio last week, we asked a group of uncommitted voters across England what they thought about “ESG”.

Not surprisingly, few understood what the term meant. An acronym that businesses and investors use on a near-daily basis, focused around environmental, social and corporate governance practices, has no cut-through with the greater British public.

Despite that, ESG’s underlying principles do influence how the public views companies, particularly in relation to the societal contribution of businesses. Our focus group showed this, in a discussion of which businesses’ reputations had improved during the coronavirus pandemic, and which had not.

Supermarkets were the clear winner from the crisis, mainly because they were seen to have looked after their customers. This is backed up by our quantitative work: our latest COVID-19 Opinion Tracker showed supermarkets, with an approval rating of +85%, almost as popular as the NHS at +88%. Amazon was singled out for praise too. This is remarkable because, in every focus group on business we have done over the past four years, Amazon was derided, with criticism centring around the company’s tax avoidance. Now, it is seen as an organisation that, at the coalface, was able to rise to the occasion and deliver.

The same considerations applied to companies that fared less well in the crisis. Wetherspoons was singled out, because “he didn’t want to put any of his staff on furlough, he just wanted to sack them”. This quote sums up how a single decision can do damage to a reputation, sticking to the business three months after the fact.

The same applied to Virgin Atlantic, with a respondent saying they were “gobsmacked” by the furloughing of employees there. Perception is reality for the public, and the feeling that these two firms did not put employees front and centre has cost them reputationally.

Again, this tallies with our opinion tracker, which last month showed that the “Social” element of ESG has become the most important to consumers in the UK, Germany, Sweden, the United States and France – and that within this, supporting employees is the biggest predictor of whether someone thinks a business is performing well. ESG might be a remote concept in and of itself to the public, but it is shaping and forming how people view business every day.

Consumers are not interested in only warm and fuzzy initiatives from business. There is an acceptance – approval, even – of tough decisions, if framed in the right way. Many felt that the crisis provided an opportunity for companies to “cut out the deadwood” in terms of management staff. One gentleman observed that many businesses are “massively top-heavy”.

This more hard-headed outlook alongside sensitivity over businesses not treating their employees well, may seem like a contradiction. The public can be quick to judge, and what may seem like a fair-minded decision can be painted as a grave error that puts businesses on the wrong side of the values divide. This is why it’s especially important that businesses, in formulating their narrative and strategy, to put research and the views of their consumers at the heart of their corporate decision-making and messaging.

Other things came through too. People are worried about the future of small and independent businesses, and the impact their absence will have on the high street. The workings of big companies and the boardroom felt extremely remote – “a different world” to the one they operate in. And there was a sense of changing consumer practices in light of the pandemic, with online shopping being treated more like the old high street with impulse buying and unintended orders being made: “Before I knew it, I had five parcels coming”.

This was the first focus group of a monthly series that Kekst CNC will be running in conjunction with Times Radio. It took place virtually, with the general public, but focus groups can be done of essentially any audience – target customer groups, investment professionals, and employees. They can be used to tease out the nuance behind the numbers, exploring why people have taken a particular view of reputation, what drives their behaviour, and how and why they think the way they do.

Our focus group last week showed how quickly people arrive at long-lasting judgements of reputation. Business has generally performed well in act one of the coronavirus crisis. But as we move into the next phase, with wider economic difficulties and redundancies, understanding the public’s perception of a business’ reputation will be more important than ever.


If you are interested in focus groups or how research can help your business, please contact us at [email protected].