The role of reputation in shaping competitive advantage
There’s growing desire at board-level to understand reputation and its contribution to business performance. How can reputation drive growth? And conversely, to what extent does a poor reputation limit growth? Reputational risk is nothing new, but there’s a growing understanding of reputation’s role in shaping competitive advantage.
That’s all well and good in theory, but it means the ability to measure reputation’s ebb and flow is not just more important than ever, it’s crucial if communications is to influence organisational decisions and the strategic direction of a business. For too long there’s been an acceptance that the impact of communications activity cannot be accurately measured. Yes, a business’s reputation is an intangible asset, but PR professionals should be working harder than ever to understand how their actions help or hinder the way their business is perceived by external audiences.
That’s not to say it’s easy. Without a clear line into sales, lead generations and conversions, it’s not easy to put a pound value on the return on investment of a PR campaign. Indeed, quantifiable, recognised, industry-standardised measurement is one of the biggest challenges faced by the PR profession. The roots of the problem, however, go much deeper than just metrics.
Outcomes, not outputs
At the heart of the measurement issue is a fundamental need to switch focus from outputs to outcomes. Until now, PR has been driven by the former, with results for PR campaigns of varying scopes and sizes focussing on a number of top-level metrics – how many pieces of coverage have been published? What is the (estimated) accumulated number of readers that coverage has reached? How many shares, likes or comments has a given article garnered?
And yet the differentiator when it comes to really showing the value of earned media is the ability to demonstrate not just raw data, but the influence of these outputs on outcomes which can then be measured against core business performance and objectives. It’s high time to move the conversation away from two-dimensional metrics and how best to use them. A more holistic system of measurement would enable PR professionals to demonstrate the full impact of their activity, from campaign outreach all the way through to tangible business growth. This overarching measurement doesn’t do away with traditional media metrics – rather, it combines an in-depth review of the standard PR outputs with a third dimension of deeper business insight.
Of course, not everyone needs every metric, all of the time, and the type of business data to be plugged into measurement metrics differs depending on the desired output. Typically, data ranges from sales figures, website hits and customer growth targets through to share of voice, customer survey data and customer experience measurement, whilst best practise measurement can span even further, encapsulating metrics such as analyst notes, shifts in stakeholder perception, integration with brand trackers and competitor benchmarking. Whichever metrics you do choose, ultimately, your measurement should be tailor-made, laser-focused on your business objectives, and budget-appropriate.
Level the playing field
If we’re able to create anything like a standardised measurement system for PR, the benefits are likely to stretch further than just our own industry. Paid and earned media might sometimes seem like diametrically opposed activities, but in truth, they’re two sides of the same coin. If we can align PR measurement metrics with those used to capture advertising performance, we can approach PR and advertising in relation to one another, rather than in opposition. Not only does this make both easier to understand, it also makes it easier to demonstrate their shared impact. And if we can fundamentally link both – and put earned and paid media on the same page – we’ll make sure that PR always has a seat in the boardroom.
This piece first appeared on PRmoment.