Ideas for Leaders #466

How to Build Brand Equity Through Employee Engagement

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Key Concept

From the friendly retail clerk helping a customer to the highly paid consultant who delivers groundbreaking solutions to the business unit, employees can directly impact a company’s brand equity. Therefore, any employee-related policy or resource decision — from training to lay-offs — is in effect a branding issue. 

Idea Summary

Employees can impact a company’s brand equity. A friendly clerk in a store or an effective IT project team that delivers to the satisfaction of the customer are two positive examples. Employees, of course, can also impact a brand’s equity negatively. In the age of social media, for example, companies have had to quickly fire managers or even executives who have posted or tweeted ill-advised, controversial or insulting comments.

Employee contribution to brand equity is not limited to business-to-consumer industries. In business-to-business firms, employees also play an important role in defining and confirming the brand — perhaps even more important than in B2C companies. B2B customers often develop relationships with specific employees — the sales rep, the project manager, or the logistics specialist with whom the customer works closely to define and deliver the solution they need. These employees themselves become elements of the brand. If these employees were to leave, the company’s brand equity is substantially reduced.

Two professors from the University of Houston and Vlerick Business School conducted in-depth interviews with marketing and human resources executives from 15 U.S. and Canadian companies active locally as well as internationally. Their focus: how organizations assess employee contributions to the brand, and how those organizations enhance and encourage employees to make such contributions.

Employees make a key contribution to the brand when through their skills, knowledge and behaviours they differentiate the brand from competitors. For example, brand differentiation is what drives loyal customers to keep coming back to a store — and that loyalty-inducing brand differentiation is connected to the employees in that store. Thus, one way to calculate the brand equity contribution of employees is to calculate the difference between the profitability of a loyal customer and the profitability of a one-and-done walk-in — then multiply that difference by the number of loyal customers you have.

Another measure of brand equity is the conversion rate: the ability of employees to turn non-purchasers into purchasers. The issue is not just transaction profit; the buyer is also more satisfied because he or she did not ‘waste’ a trip to the store only to walk away disappointed. Turning prospects into buyers takes training and innate skills; thus hiring the right people, and retaining them through an employee-friendly culture is once again key to building brand equity.

While brand differentiators are often employees who come into contact with customers, any employee in any department is a brand ambassador. Brand ambassadors send a message to customers, prospects, potential employees and anyone else through every action they take and every statement they make about the brand. They can also explicitly evangelize the brand.

Business Application

How can companies ensure that their employees will be positive elements of the brand by becoming the brand differentiators and ambassadors that increase the company’s brand equity? Here are some fundamental steps:

Know which employees are enhancing your brand equity. There are many ways in which employees increase brand equity — superior front-line customer service employees, trainers effectively increasing the skills of employees, or managers creating a work environment attractive to the best employees, to name just a few examples. Identify the employees who represent your brand best: these are the employees you want to keep.

Hire the best. Hiring the best is often not just a function of a company making the right choices; it’s also the ability to attract the best to your company. Companies must strive to be employers of choice. Displaying corporate social responsibility is one way to show potential hires that the company’s values match the lofty statements on its publicity materials.

Train to delight. The best companies will not just train employees to satisfy customers, but will train them to go further and ensure that customers are delighted with their transactions and relationships with the company.

Listen to employees. It’s no good extolling the virtue of a brand if employees disagree. Employees should be consulted on the brand’s strengths and weaknesses — and steps should be taken to ensure that all employees believe in their brand.

Keep their commitment. One way to keep employees committed is to celebrate their contributions. Another way is to ensure that employees collaborate and support each other. Employees rarely look forward to coming to a workplace in which they face antagonistic co-workers or managers.

Communicate continuously. Never let your employees forget that they are the brand.

If skilled and engaged employees are at the core of a company’s brand equity, then any policy that impacts those employees in some way will impact the company’s brand. Any conversation about employee engagement or customer satisfaction is, ultimately, a conversation about the company’s brand. And any cost-cutting decision must look beyond the financials or the head-counts: what’s the hit on your brand equity?

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Authors

Institutions

Source

Idea conceived

  • December 2014

Idea posted

  • December 2014

DOI number

10.13007/466

Subject

Real Time Analytics