
TSG Study: Bad Reputation Hurts Corporate Bottom Line
General Motors would sell 3.7 million
more cars a year and book an extra $16.3 billion in revenue if consumer opinion
held the quality of GM vehicles in the same regard as that of Honda or Toyota.
Closing the "favorable opinion" gap to within
five points of Honda would provide a $2.5 billion annual revenue lift for GM.
These findings from The Schapiro
Group come from the firm's latest round of leading-edge work to quantify the
value of corporate reputation in its different dimensions.
Last year, TSG studied the impact of a
corporation's community involvement profile on how likely consumers are to be
aware of and consider buying from that company.
In the latest reputation study, TSG
developed a formula for the dollar value of sales lost due to negative consumer
perception of a company's product quality. The formula translates to any product for
which sales and opinion data are available.
TSG focused mainly on automakers because of the marked contrast in favorable/unfavorable
ratings in that industry.
Using data reported to the federal
Securities and Exchange Commission, TSG calculated the value of each 2007 sale
for several leading car companies. The
firm analyzed consumer favorable/unfavorable ratings for each company's product
line. Then a percentage increase in
sales was assigned based on the degree to which a "favorable" consumer reported
being more likely to buy from a given manufacturer, versus the purchase intent
of an "unfavorable" consumer. From this,
a sum of lost sales opportunity was determined.
To illustrate, the biggest US car seller –
GM – had an "unfavorable" rating of 21% last year. This translates to a lost sales opportunity
equal to $22.8 billion, or 5.2 million vehicles. Honda, with an "unfavorable" rating of just 5%,
had a lost sales opportunity of $2.8
billion, representing 600,000 vehicles.
TSG Senior Strategist Alex Trouteaud led the study. He observed, "Because a high unfavorable
percentage shrinks the pool of potential buyers, that company has to be very
effective in converting favorable consumers, in order to stay in the game with
competitors." Citing mobile handset
manufacturers, Alex described the case of two competitors which had roughly
equal sales, both in units and revenue – but had a 30% gap in favorable/unfavorable
perceptions. The company with high
unfavorable perceptions was losing more than 7 times as much sales opportunity
as the competitor with low unfavorables.
"How prospective customers think
about your quality has a bigger impact on the top line than many companies
realize," said Alex. "There are no
smarter investments a company can make than those which give consumers a high
opinion of the quality of your product."
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TSG Approach Gives State Bar Association More Bang for Buck
As many corporate and institutional
clients know, The Schapiro Group (TSG) has a distinctive analytical approach
that emerged from its origins in political polling and campaign planning.
The State Bar of Georgia is the latest to
benefit from TSG's well honed ability to dissect public opinion and respond
with an effective communication strategy.
Last year the State Bar engaged TSG
to evaluate the impact of TV spots created for the Bar's "Foundations of
Freedom" campaign. "Foundations of
Freedom" has defended judicial independence as a pillar of civic life since the
late 1990s. After several unusually
politicized judicial elections in recent years, as well as legislative threats
to tinker with the courts, the Bar intensified the campaign with TV spots.
A total of 13 ads were created to run on
cable stations favored by key demographic groups.
According to Bar President Gerald
Edenfield, "We needed to know which specific messages resonated with specific
audiences in heightening public awareness of the importance of maintaining an
independent judiciary. And just as
helpful, which messages failed to resonate."
With the ads already running, TSG
had to devise a method of obtaining clean "before and after" responses.
To keep costs reasonable, the response
universe needed to be carefully managed.
TSG determined that the best known tool of qualitative research – focus
groups – was not right for this particular challenge.
"Focus groups tell you how people react
within a social context," says Alex Trouteaud, Senior Strategist of TSG.
"That is not how most people watch TV these days."
Considering multiple solutions, TSG
devised a way to mimic TV viewing through a web-based survey with the ads
embedded in the questions. Not only was
this method close to respondents' typical behavior as a TV audience, it meant
that responses could be tracked immediately.
"We could follow responses going up and down in real time," Alex says.
The result was a clear and precise
analysis of the messages, pictures, tonalities and icons that encourage people
to value judicial independence. Viewers
were moved by powerful symbolic imagery, such as the Bill of Rights on tattered
parchment. They reacted positively to
messages linking judicial independence with the idea of government operating
more effectively.
The research also confirmed the
value of keeping the ads straightforward and basic.
Bar President Edenfield notes, "The Schapiro Group's findings revealed that
simplifying the ads to deliver the most effective message would have an impact
on public understanding and confidence in the justice system."
Using the research, the State Bar has shifted to a
more targeted approach. The ads were
retooled and reduced in number. The
media buy has been expanded to include metro Atlanta broadcast stations, even though this
increases the expense. With heightened
confidence in the revised campaign's persuasive power, the State Bar is certain
that its increased investment will reach target demographics in the greatest
possible numbers.
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We're Proud of our Clients
Health Access America, a national pilot program of the Healthcare Leadership
Council (www.hlc.org), sponsored a
successful Cover the Uninsured Week to link
uninsured Americans with existing health coverage resources.
The Gwinnett Convention and Visitors Bureau
(www.gcvb.org)
sponsored another successful Barefoot in the Park fine arts festival.
Faye DiMassimo has joined Kimley-Horn and Associates
(www.kimley-horn.com) as
Transportation Planning Practice Builder.
Steven G. Hall of Baker, Donelson, Bearman, Caldwell & Berkowitz
(www.bakerdonelson.com) won
the Daily Report Guardianship and Elder Law Pro Bono Award.
Penelope McPhee, President and Trustee of the Arthur M. Blank Family Foundation
(www.blankfoundation.org), was
inducted into the 2008 class of the YWCA Academy of Women Achievers.
Alicia Philipp, President of The Community Foundation for Greater Atlanta
(www.atlcf.org), received The Atlanta Women's
Foundation's Shining Star award presented at AWF’s Summit on Women and Girls.
Kathleen Womack (www.kwomacklaw.com)
has been elected to the Atlanta Bar Association Board of Directors
As a longtime Downtown business, we thank and congratulate Central Atlanta Progress
(www.centralatlantaprogress.org)
on the organization's outstanding crisis
management and communications in the aftermath of the March tornado.
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TSG Welcomes New Talent
Randi Hooker has joined the TSG team as Project Analyst. An Atlanta native, Randi is a recent graduate
of Mercer University with a BA in Business Management and Communications.

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TSG Serves the Community
Lunch and a Performance... TSG is proud to have sponsored the always-entertaining annual lunch of the
Metro Atlanta Arts Fund (www.metroatlantaartsfund.org).
Dream team... TSG President Beth Schapiro is an active member of Club 13, the volunteer marketing
force for the Atlanta Dream – Atlanta’s new WNBA team. For more info about this exciting addition
to Atlanta’s sports scene, visit the team’s website (www.atlantadream.net).
Leading indicator... Beth was selected to serve a 3-year term on the Leadership Atlanta Board of Trustees
(www.leadershipatlanta.org). She also serves on the
organization’s Alumni Membership Committee.
Speaking of alumni... Senior Strategist Alex Trouteaud is serving as Atlanta Chapter Representative of the
Eckerd College Alumni Association
...Project Analyst Randi Hooker is serving on the Alumni Chapter Board for Krimson Kourts Incorporated
National Service Organization (KKINSO - www.krimsonkourtsincnso.org).
She is also is one of the founding Alumni members of this national service organization.
A family affair... Alex and his family are hosting a political refugee family from Myanmar (Burma). Refugee
Resettlement and Immigration Services of Atlanta (www.rrisa.org)
is the sponsoring organization.
String music... For the third year in a row, Project Analyst and accomplished harpist Liesl Hagan will be performing
at a benefit event for Mercy Flight Southeast (www.mercyflightse.org).
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