Magna Carta Africa Reputation Index zones in on telecoms: How telecoms companies can close reputational gaps

June 2017

    Managing corporate reputation is vital and can go a long way in improving consumer loyalty and assisting with stakeholder negotiations. However, companies need to begin by asking: What drives reputation? Where should they focus their attention?

    Telecommunications companies are not only facing threats to their reputations by falling foul of regulators, but also increasingly from consumers who are quite happy airing their grievances in the court of public opinion online.

    To assist corporates to improve reputation management and close gaps that exist between perception and reality, Magna Carta in 2016 invested in the development of the Africa Reputation Index, an instrument designed to measure corporate reputation in 5 separate industries, including telecommunications.  We started with a focus on South Africa and plan to roll the index out to additional countries in Africa in the future.

    315 South African consumers took part in the telecommunications survey. The results allowed us to derive the important drivers of reputation in the industry, rate how companies performed on these drivers, and allocate an index score to each organisation comparative purposes. The results not only allow companies to see how they perform, but more importantly, how they perform based on what consumers actually think is important.

    In this industry, the top driver of reputation is recommendation. For word of mouth (WOM) recommendation to happen, a consumer must want to put their own reputation on the line. Recommendation in this industry is synergistic with the deep personal connection consumer feel with their mobile devices. Our research findings show that no players in this industry are defined by recommendation. That is, consumers don’t see any of the companies as one they would recommend over any other.

    This is important to address. WOM is a natural form of communication that occurs when consumers feel that the company is listening to them and responding. It is related to many other drivers of reputation such as customer service, governance and trust. Because we know that consumers are less than happy with the available service offerings, a first place to start would be to look at how companies respond to consumers on various platforms.

    Interestingly, even though South Africans are campaigning for cheap data (#datamustfal) value for money was ranked #27 out of 44. While companies are not known for offering good value, this is less important than other drivers such as a good business focus and having good management.

    Drivers that related to ‘Good Governance’ had the strongest influence of reputation in telecommunications. This suggests that media reports have had a strong impact on how the public perceives this industry. With little differentiation between the major telecommunications companies, news is likely to shift industry perceptions as well as company perceptions. Companies in this sector struggle with perceptions around integrity – consumers who don’t trust a company are unlikely to recommend it.

    Corporate Social Investment has minimal influence over corporate reputation. This is not to say that CSI is unimportant, but other drivers have a stronger influence than CSI. CSI initiatives are often better known to employees than consumers, and perhaps there are other areas to address first before consumers feel that CSI initiatives can increase in priority.

    About Magna Carta’s Africa Reputation Index

    Magna Carta Reputation Management Consultants, in collaboration with Yellowwood, a leading marketing strategy consultancy, developed a Reputation Index with the aim of measuring corporate reputation in the African context. Data was collated using a robust research study from a sample of 1 304 South Africans. Respondents were asked to select an industry, identify different companies in the industry, and then rate the companies on a series of 44 reputational drivers that had been identified from the focus groups and in-depth Interviews.

    About Magna Carta
    Magna Carta is a seasoned African consultancy that thinks globally and delivers full reputation management solutions to organisations and individuals that take their reputations seriously. We have affiliates in 18 countries in Sub-Saharan Africa, and are part of the Omnicom group which has 265 offices in 100 countries. We have also been named African Consultancy of the Year 2016 by The Holmes Report.

    Founded in 1994, the year of South Africa’s democracy, Magna Carta understands the value of freedom and liberty for all people as well as the responsibility that comes with that freedom, and has since grown into one of Africa’s largest and most respected reputational management consultancies.