Ever since the publication of Caliber’s 2017 first quarter Top 100 review in finans, we have been repeatedly approached by companies, journalists and other interested people with the same question: why are some companies trusted and liked, while others are not?
This simple question is unfortunately not straight-forward to answer. Indeed all companies are different, and find themselves in unique situations – though some general principles seem to be applicable to all, as we outlined back in May. Such situations can be crisis-related (e.g. PostNord and DSB), being part of a specific industry (like Nordea and the GAFA companies), or being of local origin (as with Danfoss, Grundfos and LEGO).
At the same time, there are often exceptions. So what exactly do companies who succeed in gaining trust and affection have in common? This is the question we try to address in this 2017 second quarter review of Denmark’s Top 100 companies.
The top 10 of the ranking looks very similar to Q1, with LEGO still leading the pack and “permanent members” such as Danfoss, Grundfos and Oticon positioned not far behind. The biggest winner of the 2nd quarter is without doubt the Norwegian food retailer Rema 1000 that has made a remarkable jump to become Denmark’s second most trusted and liked company.
Rema 1000 (+3,2 points; +6 positions; ranked 2nd)
Much has already been written about Rema 1000 and its revolutionizing concept of offering high quality at affordable prices. The focus on organic products that have been produced and shipped responsibly is attracting an ever-growing base of consumers across all social segments. In Q2 2017 Rema 1000 has continued to win market share on the Danish discount market, and several media are speculating whether Rema may soon take over Netto’s historical market leader role. The company has recently won in price-check competitions in everything from organic food to over-the-counter medicine, has invested in initiatives such as hybrid-car transportation and has continually demonstrated active involvement in the local community whenever a new Rema 1000 store opens. Rema 1000 currently seems to be a good example of a company that knows its purpose and lives its values in everything it does, be it product selection, pricing, transportation or community involvement.
This quarter’s biggest rises and falls
More stories of interest emerge when looking at the biggest risers and fallers this quarter:
DSV (+3,4 points; +11 positions; ranked 49th)
One of the biggest risers this quarter other than Rema 1000 is the Danish transport and logistics company DSV. Transport & logistics tends to be one of the sectors towards which people generally have negative and skeptical views – like energy and financial services. In Q1, however, GLS showed that even a logistics company can win trust and be liked by the public. In Q2 DSV has followed in it footsteps and moved significantly up the ranks.
DSV has been able to present solid financial indicators lately, much to the joy of its shareholders and the stock market. However, the general public has likely also reacted to some other important developments at the company: DSV has recently announced that it had entered a strategic cooperation with the Red Cross. This means that the charity’s heavy equipment can now be shipped at lower cost and, more importantly, much faster than before. When circumstances are such that even a couple of hours’ delay can mean life or death for thousands of people, this is no small achievement!
Additionally, DSV is currently testing hybrid trucks that are silent and less polluting, and which could one day replace the large fleet of diesel vehicles making an enormous difference to the environment and the people living next to motorways and warehouses.
DSV shows that a company can present solid financial figures while at the same time demonstrate consideration for the society in which it operates. This has been noticed by the Danish population whose trust and affection towards DSV are on the rise.
Telenor (-3,7 points; -7 positions; ranked 94th)
Something interesting is happening in the Danish telecommunication sector. Traditionally untrusted and unliked (it’s the only sector in which all 4 companies tracked are consistently ranked in the bottom quintile of the top 100 list), the 2nd quarter results show the mirror image of the 1st quarter: while in Q1 Telenor was the highest-ranking telco in Denmark and 3 (Three) was the lowest-ranking one, now the picture is reversed. Telenor has assumed the unfortunate position of the least trusted and liked telco operator in Denmark – and one of the lowest ranking companies in Denmark in general at 94th out of 100 – after having become part of the Kontant TV show. The program criticized terrible customer service and incorrect bills combined with aggressive behavior towards users who have not paid those incorrect bills. In the best tradition of such TV shows, a couple of “poor and helpless” customers stepped forward to accuse Telenor of ruining their otherwise perfect lives.
Telenor reacted promptly by employing additional staff to its customer call center, dropping registration of bad payers in RKI (the Danish credit rating database), and stepping up its positive visibility in the market by for example sponsoring an international marathon in Copenhagen. The damage to its reputation, however, proved too severe to be undone by these measures – though the next quarter results will show whether they helped the company recover with time.
The Telenor example shows that even a company with a relatively solid reputation (being the most trusted in an untrusted sector) can quickly lose its position by being seen as not living up to its promise or to people’s expectations. Treating your customers poorly is one of the greatest sins a company can commit when it comes to building character – and is often judged harshly in the court of public opinion.
Winning public trust and affection is a tricky thing – sometimes chasing it will lead you in the opposite direction. As we often say, trust and affection are the outcome of having a strong and lasting character. And character, in its simplest form, is about having a unique purpose and acting with integrity. In even simpler terms: create or deliver something that people want in a way that is unique to you, and do no harm. But demonstrating and staying true to character is a never-ending task, one that is not easy for a company to manage and enforce over time. Cases like Rema 1000 and DSV show the benefits of getting it right. Stay tuned to see how they and others develop throughout the rest of 2017.
If you would like to learn more about the public trust and affection towards your company, and better understand your position in the ranking feel free to contact us on [email protected].
ABOUT THE STUDY
Caliber believes companies that are driven by a unique purpose and act with integrity build a strong Corporate Character – which wins the trust and affection of their stakeholders, and secures the company’s long-term legitimacy and success. The Corporate Character Index is therefore made out of 2 questions (to what extent do respondents like and trust a particular company) that are posed to a representative sample of the Danish population through online panels. Answers are given on a 1-7 scale by respondents who are sufficiently familiar with the rated company, and are then rescaled to a 0-100 score. The survey is conducted on a daily basis, and scores are calculated in real time. Every month Caliber calculates cumulative monthly scores, and every quarter it calculates quarterly scores that are the average of the 3 preceding monthly scores. The 2017 Q2 scores herein are based on a total of 4.902 respondents and 38.475 ratings. The 100 companies were selected for inclusion in this survey based on their deemed prominence in the Danish market – using criteria such as turnover, employee base, public familiarity, market share etc.