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America’s most reputable companies: What Amazon’s doing right that Apple isn’t

By Tina Irgang

A new report out this week ranks the companies American consumers view most favorably. Unsurprisingly, Amazon took the top spot. Rather more surprisingly, Apple didn’t even make the top 100.

The annual U.S. RepTrak 100, published by Cambridge, MA-based research firm Reputation Institute, bases its rankings on responses from more than 80,000 consumers across the U.S., collected during the first quarter of 2016. Consumers were asked to rate companies on a variety of factors, including their products, governance, innovation, workplace and corporate citizenship.

The top 10 look as follows:

  1. Amazon
  2. Hallmark
  3. Samsung
  4. Kellogg’s
  5. Sony
  6. Johnson & Johnson
  7. Rolex
  8. Intel
  9. Netflix
  10. The Walt Disney Company

As Business Insider has noted, the omission of Apple, one of the world’s best-known consumer brands, contrasts markedly with another annual ranking, Fortune’s World’s Most Admired Companies, which lists Apple in the top spot. However, it should be noted that Fortune’s methodology is quite different. Rather than surveying consumers, the publication asks executives, directors and securities analysts to rate companies.

Reputation Institute argues that Apple has failed to crack the top 100 because its public reputation is largely limited to its products: “While Apple has strong, and even excellent, scores when it comes to products and services, financial performance and innovation, it fails to deliver on workplace, governance and especially citizenship.”

Consumers simply don’t know much about Apple beyond what products it makes. Of the consumers responding to the survey, 33 percent said they were unsure about whether Apple is a good corporate citizen (meaning it supports philanthropic projects, green initiatives and the like), and less than half (42 percent) said they believe Apple provides sufficient information about itself.

Does Apple’s reputation matter?

Arguably, Apple is nevertheless doing pretty well. After all, the company posted a record income of $75.9 billion in the first quarter of 2016.

However, there are signs of weakness: Apple’s success depends heavily on iPhone sales, notes Bloomberg Technology. That’s a problem because the fourth quarter of 2015 saw iPhone sales decline for the first time, amid a global slowdown in demand for smartphones, according to TechCrunch.

What’s more, as the smartphone market reaches saturation, companies are turning to artificial intelligence as the next big thing — and that’s a market where Apple lags behind its competitors, notes The Guardian. In fact, it’s not clear that Apple has another product lined up that could ever match the success of the iPhone.

So if consumers find a product they want more than the latest iPhone, it might spell trouble for Apple.

Reputation Institute’s findings suggest that customers are more likely to engage in positive behaviors toward a brand (saying something positive about it, recommending or buying products) if they view the company itself positively — rather than just its products. For example, 56.9 percent said that when they decide to buy a product, the company’s reputation matters more than that of the product.

What’s Amazon doing right?

Much like Apple, Amazon is constantly working on improving its products and services. “The internet age has created a data explosion, and savvy companies like Amazon use all that information to keep optimizing their products, services, processes, operations and communications,” says Tom Caporaso, CEO of Clarus Commerce, a Connecticut-based ecommerce provider.

But Amazon may have a stronger long game when it comes to anticipating what customers want. The company embraces “a laser-like focus on fulfilling the evolving needs and interests of today’s consumers,” says Caporaso.

That has included a venture into artificial intelligence with Echo, a Bluetooth speaker and virtual assistant.

Of course, Amazon isn’t without weaknesses. An in-depth 2015 New York Times article about its obsessively competitive workplace culture likely contributed to a significant drop in the company’s score in the “workplace” category, according to Reputation Institute’s report. Amazon also dropped in the leadership, governance and citizenship categories.

The takeaway? Consumers are becoming savvier about the companies they buy from, and expect to see those companies do more than make great products. As a result, corporate social responsibility and transparent governance are quickly transforming from a bonus into a requirement.

 Tina Irgang is the production editor for SmartCEO. Contact her at tina@smartceo.com.