British consumers are increasingly turning to social media sites to 'hashtag' and 'bashtag' brands, rather than calling their customer service centres.

Brands also feel the change, and are starting to work out the best ways to engage and tackle the social media customer.

Echo Research and Fishburn Hedges identified six actionable insights that well-known brands, such as Barclaycard, BT and Sainsbury's often practice, such as 'choosing the right battle - but entering it fast' and 'not letting social media define you'.

But how did we reach this conclusion? To start with, Fishburn Hedges ran an online poll with 2,000 consumers nationwide, followed by in-depth interviews, conducted by Echo Research, with several blue-chip companies, including PepsiCo, HSBC and Oasis.

The social media savvy brands were more than happy to speak to us about topics including: their use of social media, who is responsible for their social media sites, whether they've ever experienced a customer backlash and how they dealt with it, and how they publicise their use of social media sites.

At Echo Research, we often conduct qualitative interviews to get to the heart of an issue, while probing and prompting our way through a series of questions and answers. We find that this traditional - analogue! - method is still one of the best for understanding a customer, stakeholder or opinion former, to ensure that an opportunity or threat is understood in depth, so that clear recommendations can be accurately passed to a client.

However, as our research shows, qualitative research works exceptionally well when hand-in-hand with quantitative research. The findings are more substantive and robust, yet also are rich with ideas and opinions. On this occasion, merging the insights from customers and brands offered a truly holistic picture of the current situation from both sides of the cash till to ensure that the findings are more insightful, powerful and genuinely actionable. We also have the technology to make sense of social media through our Echo Sonar platform, sorting the digital wheat from the chaff, enabling brands and companies to understand whether there is genuinely a storm brewing or whether it's just in a teacup.

Dan Soulas explains how what stakeholders think of your brand is responsible for an average of 31% of US share prices.

Few CEOs would question that corporate reputation ranks amongst their most important assets. However, hardly any would be able to say exactly how much it's worth.

More importantly perhaps, few would be able to say with any confidence that they knew exactly what they should be doing to manage and ultimately maximize the value it represents.

Our research, however, reveals that:

• Corporate reputation was adding close to $3.4bn of shareholder value to companies across the S&P500 as at August 2011.
• The proportion of a company's market capitalization attributable to reputation averages 31% across the S&P500.

In fact, a rise in the value of corporate reputation in the last four years has laid the foundations for the share price recovery that we see today. Although many corporate reputations suffered in the turmoil precipitated by the failure of Lehman Brothers in 2008, reputation has been an important driver of stock price growth since then.

Our analysis shows that in the immediate aftermath of the 2008 market collapse, the average contribution of reputation to company value in the S&P500 fell by 3 percentage points to 13%. Since then, it has grown steadily in absolute terms and now represents 31%.

Naturally as reputation has grown its share of company value, some companies have performed better than others. The average contribution of reputation of the largest 20% of companies (by market cap) tracked is 45%. The top performing organizations are Apple and Google with a 58% contribution.

By contrast the contribution of corporate reputation in the bottom 20% of companies analyzed is only 13% and, in many cases, poor reputation is destroying value and reducing market capitalization.

The bottom line is that corporate reputations are now underpinning investor confidence in companies' ability to deliver the economic returns expected.

On the whole, the larger, and arguably more "communications sophisticated" companies, are more successful at creating value through their corporate reputations.

Nevertheless reputational value can be a fickle friend and can, and sometimes does, change quickly. Although the reputation contribution of the companies common to both our 2011 and 2010 studies increased by an average of 11%, individual changes ranged significantly.

The 10 largest risers registered an average increase of 28 percentage points while at the other end of the spectrum the 10 largest fallers declined by 11 percentage points.

What chief executives really want to know, however, is how corporate reputation can grow shareholder value.
Our analysis shows that on average, a 5% improvement in the strength of a corporate reputation of an S&P500 company can be expected to deliver an increase in market capitalization of close to 3%.

Furthermore, a better reputation will also increase the investment community's confidence in a company's ability to deliver the returns it promises.

The bottom line is that investment in building corporate reputation pays dividends and investment in understanding which particular components of reputation offer the greatest returns will enable companies to maximize them.

In the first of Ebiquity's 3 sessions on 'brand optimisation' at BrandMAX, the discussion was about Reputation, more specifically about how social media means that there is an increasing need for Marketing and Corporate Affairs to better align their efforts and activities.

Our panel represented Marketing (Nigel Gilbert, Virgin Media), Corporate Affairs (Dominic Fry, M&S) and brand (Khaled Ismail, Tetrapak) representing both the B2B and B2C sectors. The session chair was Matthew Gwyther, editor of Management Today.

'We boobed' said the ad that M&S ran just 48 hours after the story broke that they were charging shoppers more for larger bra sizes. Dominic described how Marketing and Corporate Affairs worked swiftly and cohesively to minimise the negative impact on the brand's reputation following the story gaining traction in social media and subsequently mainstream media. They engaged the social media groups that were formed, reduced prices, apologised and turned what may have lost them market share into a share gain. "Reputation protection is a key focus for us," he said.

Nigel Gilbert described the relationship between Marketing and Corporate Affairs at Virgin Media as 'unusually close'. He said that the immediacy of the media business necessitates such closeness.

Describing his time at Lloyds Banking Group, he said he witnessed how they went from trusted High Street name to a 'pariah' during the banking crisis in 2008. It was he said a 'salutary lesson' in how to move from 'neutral to negative' in one bound. He went on to describe how 'trust is the key to reputation' and how the name change to Virgin (from NTL:Telewest) improved perceptions of by 30%. "This says a lot about the Virgin brand," he said.

He was very complimentary when asked about Sky in the context of News International and the phone hacking scandal. He knows that the scandal did have a negative impact on the Sky brand because Virgin constantly monitor Virgin and their competitors reputations and social media sentiment.

Khaled described how Tetra Pak go to great lengths to ensure that all areas of their business are aligned and that their staff do things 'the Tetra Pak way'.

He agreed with Nigel that the trust of all stakeholders is the single most important thing, "If the Nestle, Coke or Danone consumer loses trust, we can all go home." He described reputation as the 'cushion' that means stakeholders give you the benefit of the doubt in a crisis.

The panel were asked about the role of CSR (Corporate Social Responsibility) in building reputation. Khaled talked about how Tetra Pak had been active in the area for a while but now consumers were demanding that they 'turn up the volume' on it. Dominic was frank about Marks & Spencer's challenge to generate an emotional response from consumers on its 'Plan A' initiative for them to make a commercial gain.

They were asked whether the inevitable cost-cutting drives many businesses are facing, might threaten initiatives that businesses put in place to build and protect reputation. 'Potentially' was the reply. Dominic talked how he manages this threat at an executive level and how risk audits help inform such decisions.

The session was hosted by Sandra Macleod of Echo Research, Ebiquity's Reputation & PR arm.

'CR' or 'CSR' or 'corporate sustainability' - whichever name you like best, Echo has a new qualification in it.

Last month I sat with French, Swiss, Greeks, Russians, Lebanese and Chinese in a Brussels hotel debating what good sustainable behaviour means and how to become better guides to our clients and colleagues on best CR practice. We'd come together at the global Centre for Sustainability and Excellence to stay abreast of the latest thinking about living and communicating corporate responsibility (CR). It was a chance to consider companies' greatest lapses into unacceptable behaviour, and their more elevated moments.

What became clear to me as we talked was how important 'due diligence' on reputational risks is. The mistake some companies make is to question stakeholders directly themselves about these things. But if the definition of reputation is "What people say about you when you've left the room", then doing your own investigations may not be the best way of getting at the unvarnished truth.

I was impressed to see how much value the workshop's moderators set by research. They saw it as a big tranche in the cycle of running a good CSR programme. The phases of identifying stakeholders, their needs and expectations, the opportunities and risks that might come from them, were all on the agenda.

Communicating and assessing success were said to be vital too - how the social and mainstream media deliver an echo of CR, as a distorted noise or a perfect sound replica.
CR reports were thought to need a test-bed of reader comment about how unique or transparent they are, or else risk being so much 'white noise'. Numbers alone are not illuminating, people said; measuring even distant 'echoes' and perspectives qualitatively gives important feedback on the journey ahead.

The risks from supply chains, and the need to measure supplier conformity to standards, came over as the 'hottest and hardest' topic. Here again, having access to research teams in remote and culturally disparate territories was important in winning intelligence about risks. It was about knowing how different stakeholders march to the beat of different drums, and comparing and reconciling the drumbeats - and for that, a good understanding of cultural relativity was crucial.

After writing a mini-thesis on the ideal CSR programme, and two hard-working, lively days in Brussels, Echo acquired another accreditation to add to the letterhead. (see above)