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Q4 2016 results: Why do people love Lego and hate Saxo Bank?

Love and hate are harsh terms that perhaps shouldn’t be used when talking about companies and people’s perceptions of them – after all, as we said before, love’s got no business being used in the world of marketing and, well, business. But when we evaluate companies’ brand and reputation, and their perceived Corporate Character, the main index we look at is the level of trust and affection they enjoy in the marketplace – and on that measurement, among the 120+ companies we monitor in Denmark every month, Lego always seems to come first and Saxo Bank last. Why is that?

Of toys and bank accounts

It’s true that most of us are not aware of many Saxo-fans out there, and we don’t mean the musical instrument! Jokes aside, it’s clear that comparing a toy manufacturer with a bank is not exactly fair: people have a personal and playful relationship with games and toys, one that can extend way beyond their childhood – hence the phenomenon of Adult Fans of Lego. A bank, on the other hand, is considered a “necessary evil”, a rational service that is not typically associated with strong emotions. This is fair enough and starts explaining the difference in scores between the two companies, but our data shows that there are other toy manufacturers that are not nearly as trusted and liked as LEGO (e.g. Playmobil, ranked 52), just as much as there are other banks that are not nearly disliked and distrusted as much as Saxo Bank (e.g. Arbejdernes Landsbank, ranked 61). So clearly there’s more to it than the difference in sectors and the nature of the product.

To try and answer this question, we should first explain our methodology in a bit more detail.

Why it’s important to be trusted and liked

At Caliber we believe that companies that are driven by a unique purpose and act with integrity have a strong and lasting character – in the same way, that people do. Our experience and research clearly show that this leads to being more trusted and liked by other people, and for companies, this means winning more loyal customers and employees, and more dedicated ambassadors among other stakeholder groups – helping secure the performance and viability of the business. We consider “driven by a unique purpose” to be a testament to a strong corporate brand, and “acting with integrity” to be the hallmark of a strong company reputation. These, therefore, form the building blocks of our methodology, which looks at brand and reputation dimensions as driving trust and affection, which in turn build consideration, preference, and advocacy.

As part of our real-time tracking program, we monitor the public perceptions of more than 120 companies in Denmark on a monthly basis on the different aspects of their brand and reputation. Since, as mentioned above, our research indicates that being trusted and liked is the main driver of people’s behavior and goodwill towards companies – we focus on that as our main index, while also trying to understand how brand and reputation dimensions help build these emotions of trust and affection. Looking at the development of our metrics we can detect key characteristics of those companies who succeed in forming this emotional bond with the public, and those who don’t.

One interesting thing we find again and again is that a strong brand and a strong reputation go hand in hand when it comes to earning the trust and affection of stakeholders. In fact, 53% of people’s trust and affection towards companies is influenced by an organization’s corporate brand (how authentic, relevant, differentiated, and inspiring it is perceived to be), while 47% is explained by the corporate reputation (perceptions of the company’s products, innovation, integrity, and leadership).

What’s more interesting, as you can see in the figure above, is that it’s not the tangible elements – the company’s actual offering, innovation, and leadership – that matter most to people. Rather, it’s the softer elements – being able to relate to what it stands for (Relevance), feeling it’s a company that does what it says (Authenticity), and having a sense that it behaves responsibly (Integrity). In other words, when it comes to trusting and liking companies, and therefore wanting to buy their products, invest in their shares, work in their offices or recommend them to others – the soul of the company matters more than the body.

Yours, body and soul

This of course means that to get their audiences engaged, companies need to convince them not only of their tangible attributes (like the quality of their products or the speed of their innovation) but also of the fact that they stand for something people can relate to, and that they behave authentically and responsibly. Can this help us better understand the vast difference between how Lego and Saxo Bank are perceived? It sure does.

Lego has been admired by the public for many years not just for its great toys, but also for what it stands for – a company that inspires and develops the builders of tomorrow, and a company that believes in – and fights for – children’s right to learn through play. It has worked hard since its beginning in 1932 to put actions behind these words, making it come across as an authentic company with a strong sense of integrity.

Saxo Bank, on the other hand, suffers from the lack of a perceived “soul” – while it’s recognized by the public for being an innovative bank, it scores lowest in Denmark for Integrity and Relevance. This, more than anything else, makes people distrust and dislike it more than they do other banks.

One day at a time

As the saying goes, reputation takes years to build and minutes to ruin. Public perceptions can indeed prove fickle, which is why we monitor them on a daily basis and analyze them weekly and monthly – to identify how events, activities, and stories that reach people affect their perceptions of different organizations. What we’re also learning is that getting the public to trust and like organizations is a complex process with many complementary aspects. It is not a question of one (or several) successful PR events, marketing campaigns, or breakthrough innovations. It is a life-long challenge for the company to develop a strong and lasting corporate character through defining a true purpose, engaging with internal and external stakeholders, and backing up words with real actions.

It’s only those companies who can deliver “body and soul” that will earn their stakeholders’ loyalty and advocacy. We’ll keep following companies in Denmark and elsewhere to see how they develop in this arena – and will keep an eye out for that day when Lego is no longer the first and Saxo Bank no longer the last…

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