How to measure Corporate Reputation: The case of Telefónica

Speaker

Alberto AndreuGlobal Director of Reputation, CSR, Brand and Sustainability

Telefónica

Speaker

Sergi GuillotManaging Director at Acceso Group

Telefonica’ s Reputation Management

RepTrakTM

Barcelona Summit15th June 2010

00 Why? A quick understanding of the situation

01 Where we are now? Starting point

02 How? The road map

03 The media opinion

04 Setting objectives

Index

The consumer thinks that they are so big and so far away from him that he face an imbalance and inequality situation.

00 A quick understanding : the multinational company´s problem…

THE COMPANY

THE CONSUMER

And we can´t forget that the consumer don´t trust big global companies.

IMB

ALA

NC

E A

ND

INE

QU

ALI

TY S

ITU

ATIO

N G

AP

We are in the same situation. We are perceive as too big and poweful that we generate an imbalance and inequality relationship. If this is the way that the consumer feels, he will think that we abused of our power and we don´t have any limit to make more income.

00 A quick understanding: ...Our challenge

THE COMPANY

THE CONSUMER THE

TA

RG

ET:

TO

RE

DU

CE

TH

E G

AP

If we are not capable to reduce our PERCIEVE SIZE on the consumer´s mind, others (the regulator), will REDUCE our real size to decrease our

power.

“Responsibility is the price of greatness”

Sr. Winston Churchil

The consumer thinks that they are so big and so far away from him that he face an imbalance and inequality situation.

Source: Global Pulse 2006 - 2009.

Our potential competitors start from an advantage position. 01 Sector´s reputation needs and improvement…

Consumer Products (16)

Beverage (9)

Computer (18)

Industrial Products (13)

Food Manufacturing (21)

Retail - Food (24)

Electrical & Electronics (28)

Retail - General (42)

Automotive (37)

Conglomerate (19)

Airlines & Aerospace (26)

Raw Materials (26)

Pharmaceuticals (16)

Transport & Logistics (17)

Chemicals (5)

Energy (52)

Services (12)

Financial - Bank (67)

Information & Media (11)

Construction/Engineering (13)

Utilities (29)

Financial - Diversified (22)

Financial - Insurance (40)

Tobacco (5)

75.76

72.39

71.85

70.06

69.73

69.11

67.14

66.87

66.63

66.55

65.13

64.99

63.77

63.39

62.14

61.72

61.60

61.29

60.64

58.89

58.81

55.64

69.05

67.53

Telecommunications (39) 56.082006

Telecommunications (32) 60.332009

Big gap between tecnology suppliers

and service suppliers.

Company´s Risk: the entrance of the

tecnology suppliers on the market.

7 Secretaría General Técnica de la Presidencia

Telefónica S A

7

Our methodology: RepTrak (developed by the Reputation Institute)

RepTrak Pulse: measures the reputacion based on 4 questions: esteem, admire, trust, feeling.It is the so-called “independent variable” or the “emotional measurement”, which we are using to measure reputation.

RepTrak Index: the index is used to track a company`s reputation based on 26 weighted attributes grouped in 7 dimensions. It is used in combination with RepTrak Pulse to identify strengths and weaknesses.It is called the “rational measurement” and is used to manage reputation.

01

RepTrakTM metodology is used by big global companies:

Big Companies use RepTrakTM methodology

FRC´s companies use RepTrakTM metodology:

Other companies use RepTrakTM metodology in Spain:

01

General Public Employees Key Influentials

Stakeholder´s Map by Country 01

Stakeholder´s Priorities01

RWeight

GP

1 Product Satisfies its clients’ needs 5,552 Product High quality products and services 5,463 Product Backs up its products and services 5,104 Product Good quality/price ratio 5,035 Product Deals satisfactory with complaints 4,856 Product Treats its clients well 4,677 Governance Open and Transparent 4,508 Governance Responsible use of its power 4,439 Governance Ethical conduct 4,30

44%

GENERAL PUBLIC RWeight KI

1 Governance Ethical conduct 6,792 Governance Responsible use of its power 6,073 Product Treats its clients well 5,384 Citizenship Contribution to society 5,225 Citizenship Supports good social causes 5,156 Product Backs up its products and services 5,087 Product Good quality/price ratio 5,048 Product High quality products and services 4,799 Lidership Has a strong and respected leader 4,37

52%

KEY INFLUENTIALS Weight Em

49%

R

1 Workplace Buen lugar para trabajar 6,882 Governance Comportamiento ético 5,973 Lidership Visión clara de futuro 5,144 Product Buen trato a clientes 4,995 Product Calidad de prod/serv 4,526 Product Gestión satisfactoria reclamaciones 4,507 Lidership Líder fuerte y respetado 4,468 Citizenship Protege el medio ambiente 4,349 Finance Potencial de crecimiento futuro 4,31

EMPLOYEES

Our methodology: RepTrak (develop by the Reputation Institute).

RepTrak Pulse: measures the reputacion based on 4 questions: esteem, admire, trust, feeling.It is the so-called “independent variable” or the “emotional measurement”, which we are using to measure reputation.

RepTrak Index: the index is used to track a company`s reputation based on 26 weighted attributes grouped in 7 dimensions. It is used in combination with RepTrak Pulse to identify strengths and weaknesses.It is called the “rational measurement” and is used to manage reputation.

01

15,3%

13,7%

10,3%

9,9%

11,3%

8,5%

9,5%

10,0%

10,6%

11,4%

13,2%

30,7%

Finance

Citizenship

Innovation

Leadershio

Integrity

Workplace

OfFer

14,8%

9,5%

10,0%

10,6%

11,4%

13,2%

14,8%

30,7%

Modelo de pesos RepTrak 2008 Público General para todos los países estudiados por Telefónica.

España Argentina Chile Perú Brasil México

Demonstrated by RepTrakAlemania UKVenezuela Colombia Irlanda Rep. Checa

The dimension weigths come from RepTrak ModelTM General Public by country.

Our methodology by country01C

oncl

usio

nsC

ompa

nies • O2

• Vodafone• E-plus• Deutsche

Telekom

• O2• Vodafone• Orange• Tesco

• Telefónica• Vodafone• Ono (Auna)• Telefónica

Movistar• Orange

• Telefónica Movistar

• Telmex• Telcel

• Telefónica• Claro• Telecom• Telefónica

Movistar

• Telefónica• Entel• Claro• VTR• Telefónica

Movistar

• Telefónica• Claro• Nextel• Telefónica

Movistar

• Telefónica-Telecom

• Telefónica Movistar

• ETB• UNE• Tigo• Comcel

• Telefónica• Embratel• Claro• Vivo• Oi• TIM• Net

Dimensions Germany UK Spain Mexico Argentina Brazil Chile Peru Colombia

ProductWorkplaceGovernanceLidershipInnovationCitizenshipFinance

VenezuelaIrland Czech Rep

32,513,011,5

12,0

13,38,19,6

32,314,6

15,27,6

8,911,5

9,9

29,916,413,612,09,7

10,28,3

29,915,513,711,011,010,08,9

31,615,513,711,29,4

11,17,6

30,215,111,512,410,79,410,7

30,715,913,511,110,29,19,5

29,916,013,011,210,49,5

10,0

29,014,812,112,210,39,9

11,7

27,015,713,312,69,99,8

11,6

25,916,813,710,911,910,210,6

30,514,414,111,710,611,57,2

• Telefónica Movistar

• Digitel• Movilnet

• O2• Vodafone• T-Mobile

• O2• Vodafone• Meteor• Sky

• The dimension Products/Services has the highest influence (weighting) in this model for all countries. In Argentina, this dimension has the highest weighting of all countries.

• In most of the countries, the 3 dimensions with the least influence are finance, citizenship and innovation.

Quality of Products & Services

Customer service

Integrity in management

Performance Citizenship

Lideship

1st level: Company interaction with customers

2th level: Good internal practices and integrity

“MUST HAVE”

3rd level: other reputational factors

++

--

Rel

evan

ce

Per

sona

l exp

erie

nce

“NICE TO HAVE”

Our methodology… allows us to identify priorities01

New Paradigm...

»We are more exposed and more vulnerable, but….

»We have a BIG OPPORTUNITY!

Room for managing ReputationManaging Reputation is the capacity to conciliate

what I do & say with public perception

DO

PublicReputationSAY

Manage Manage

Manage

Room for managing ReputationManaging Reputation is the capacity to conciliate

what I do & say with public perception

DO

Media ReputationSAY

Manage Manage

Manage

PublicReputation

»Experience tells us that there is a connection between the image projected in the media and the perceived reputation.

»Media Reputation vs. Public Reputation

Room for managing ReputationManaging Reputation is the capacity to conciliate

what I do & say with public perception

DO

Media ReputationSAY

Manage Manage

Manage

PublicPerception

HOW DO I USE COMMUNICATION TO MANAGE REPUTATION?

Gap analysis

Media Profile

Public Profile

Strategy&

Goals&

Actions Recommendations

PERFIL MEDIÁTICO

31,3%

16,5%

5,0%

45,0%

2,2%2,0%

Resultados económico-Finacieros

Calidad oferta comercial

Reputación Interna Ética y RSC Dimensión globalde la empresa

Innovación

PERFIL MEDIÁTICO

RESULTADOS PRODUCTOS Y SERVICIOS AMBIENTE DE TRABAJO ORIENTACION SOCIAL GOBIERNO INNOVACION

The model

8,2 8,1 8,3 8,5 8,48,1

8,69,1

8,8 8,88,5

7,7

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

RESULTS PRODUCTS AND SERVICES

WORK ENVIRONMENT

RSC GLOBAL DIMENSION

INNOVATION

PUBLIC PROFILE COMPANY PUBLIC PROFILE SECTOR

15,80%

10,40% 7,40%

31,20%

20,60%

14,60%

19,80%

14,60% 10,80%

31,90%

11,80%11,10%

RESULTS PRODUCTS AND SERVICES

WORK ENVIRONMENT

RSC GLOBAL DIMENSION

INNOVATION

COMPANY PUBLIC REPUTATION SECTOR PUBLIC REPUTATION

Analysis - Public ProfilePercentage of relevance by atribute for stakeholders

Evaluation by atribute for stakeholders

Analysis - Media ProfilePercentage of relevance by atribute for media

Evaluation by atribute for media

31,3%

16,5%

2,0%5,0%

45,0%

2,2%

24,8%17,3%

1,0%

4,9%

51,0%

2,0%

RESULTS PRODUCTS AND SERVICES

WORK ENVIRONMENT

RSC GLOBAL DIMENSION INNOVATION

COMPANY MEDIA REPUTATION SECTOR MEDIA REPUTATION

6,75,8

5,2

9,09,6

9,2

6,8

5,46,2

8,69,4 9,3

0,0

2,0

4,0

6,0

8,0

10,0

12,0

RESULTS PRODUCTS AND SERVICES

WORK ENVIRONMENT

RSC GLOBAL DIMENSION

INNOVATION

MEDIA PROFILE COMPANY MEDIA PROFILE SECTOR

GAP Analysis (company)

14,6%

31,3%

16,5%

5,0%

45,0%

2,2%

7,4%

31,2%

20,6%

10,4%

15,8%

2,0%

Resultados económico-Finacieros

Calidad oferta comercial

Reputación Interna Ética y RSC Dimensión globalde la empresa

Innovación

PERFIL DE REPUTACIÓN PERFIL MEDIÁTICO

-15,5%

+26,2%

-14,4%

+12,4%-6,1%

+5,4%

Gap

INNOVATIONRESULTSPRODUCTS Y

SERVICESWORK

ENVIRONMENTRSC

GLOBAL DIMENSION

Relevance by reputation atribute

GAP Analysis (company)

Gap

Evaluation by reputation atribute

8,2 8,1 8,3 8,5 8,48,1

6,7

5,8

5,2

9,0 9,69,2

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

RESULTS PRODUCTS AND SERVICES

WORK ENVIRONMENT

RSC GLOBAL DIMENSION INNOVATION

Eval

uati

on

PUBLIC PROFILE COMPANY MEDIA PROFILE COMPANY

Diagnosis – Sector

0

5

10

15

20

25

30

35

5 6 7 8 9 10

Perc

enta

ge o

f rel

evan

ce

Evaluation

RESULTS PRODUCTS AND SERVICES WORK ENVIRONMENT RSC GLOBAL DIMENSION INNOVATION

Decision Matrix

• Gap Media /Public in RSC

• Gap Media /Public in Innovation

• Actions in managing internal reputation forwork environment

• Actions in managing the quality of commercialoffer and its perception

• Increase the number of informations on RSC

• Unfavourable informations about FinantialResults.

• Unfavourable informations about Quality ofCommercial offering.

• Favourable Information about Work environment.

• Information about Innovation

• Online Communication actions for RSC, WE,P&S

X REMOVE + INCREASE

- REDUCE CREATE

CR scope and team objectives

1

2

3

+ scope /Direct influence

-Scope /depends on other’s performance

CSR projects

1. Projects to assure Business Principles

1. Supply Chain2. Child Protection 3. …

2. Think Big1. ----2. ----

3. Digital confidence

##

#

Working with CommsBrief Comms areas on those levers which improve CR:

• Company hidden strengths• Company achievements • Other items which might improve CR

impact on governance & community RT dimension

Internal consultancy to help BU to:

• Be aware of situation• Results on time• Knowledge centre share cases “already tested” in other countries (inside Telefónica) or companies.

Working with Operating Units

Coordination objectives

Support objectives

Leads Rep Track in any single market (1, 2 or 3)

WITHIN COMMS, CR AND PR TEAMS

#

Project objectives

04

CR scope and team objectives

1

2

3

+ scope /Direct influence

-Scope /depends on other’s performance

CSR projects

1. Projects to assure Business Principles

1. Supply Chain2. Child Protection 3. …

2. Think Big1. ----2. ----

3. Digital confidence

##

#

Working with CommsBrief Comms areas on those levers which improve CR:

• Company hidden strengths• Company achievements • Other items which might improve CR

impact on governance & community RT dimension

Internal consultancy to help BU to:

• Be aware of situation• Results on time• Knowledge centre share cases “already tested” in other countries (inside Telefónica) or companies.

Working with Operating Units

Coordination objectives

Support objectives

Leads Rep Track in any single market (1, 2 or 3)

WITHIN COMMS, CR AND PR TEAMS

#

Project objectives

04