People Are What Make Successful Brands.
Internal Branding: the Key to Brand Success
by Achim Wirtz
Although hundreds of thousands of Swiss francs are invested in brand development and millions more in launching a new brand, only a fraction of such funds go normally to internal information campaigns. The usual practice is to introduce a market campaign to employees and briefly explain the brand promise on the Intranet or in a newsletter. Employees are then instructed, without further fanfare or ado, to live up to the brand values.
But let’s take a look at a different approach taken by one of the world’s great marketing specialists: Apple. As we all well know, Apple is synonymous with groundbreaking innovations that have revolutionized a number of business sectors. Apple’s product lines have achieved cult status in many countries worldwide. But perhaps what distinguishes Apple most is that sales in its 327 stores represent a substantial source of company earnings. Last year its own-store business volume rose to over 16 billion US dollars. The turnover per square meter is the highest in the US market – many times greater than most other retailers achieve and twice as much as recorded by Tiffany, the second highest retailer.
The reason for Apple’s success can be explained by anyone who has visited one of its stores: the enthusiasm of its sales people and technical gurus is palpable, and it’s infectious. When you talk to them, you interact with the Apple brand in human form. And Apple’s employees deliver the goods, literally: sales teams, technicians and back-office staff generate sales of USD 473,000 per person. Other electronic retailers in the USA average barely USD 200,000.
Internal Branding ensures that employees know and understand the brand values that they follow and apply them in their decisions in a customer-oriented way.
It synchronizes a company’s structures, processes, resource allocation, culture and leadership philosophy, as well as employee behavior and communication activities.
As a package of measures, Internal Branding harmonizes all the activities that together influence employee conduct in relation to the brand promise and brand performance.
Why are Apple’s employees so effective?A prime reason is that the brand attracts employees who are enthusiastic about the products. And the company creates employees who serve as convincing ambassadors for the brand. Staff turnover averages just 10%, which speaks for itself. People only stay in jobs that are fulfilling and enable them to achieve their career goals. Apple familiarizes new trainees with its brand mission, “Enriching people’s lives.” And as specialists – not just salespeople – they are encouraged to live up to this mission every day. Later we’ll return to Apple and address some further aspects of its impressive success story. Now let’s turn to the basics underlying this success.
Internal Branding: how to connect brands with people
What improves employee job performance? It’s a mixture of desire, ability and empowerment. While these alone have nothing directly to do with the brand, as soon as a company begins to promise specific benefits through its brand, the motivation, qualification and delegation of responsibility of employees become key to the brand’s success in relation to customers and other stakeholders. And that’s when internal branding comes into play. This involves developing and delivering a consistent set of ways of empowering employees to offer the customer a consistently good brand experience that fulfills the brand promise.
The foundation of internal branding is laid during the brand’s development phase. If internal branding is not an integrated part of the brand strategy, there’s a high risk of brand values being developed purely from a marketing perspective. Along with external quality criteria, such as strategic conformity, differentiation or relevance, brand values must be communicated internally to, and understood by, all employees, who can then transfer them to customers. If the interplay between brand promise and brand experience doesn’t work, the brand is vulnerable, and its contribution to company success endangered. This is not only true for service-oriented industries like the hotel sector. BMW’s promise of “Pure driving pleasure” isn’t only conveyed by employees with direct customer contact. It must also be brought to life by buyers, HR specialists and finance people as much as by the designers. The brand promise is created by the company as a whole, not just salespeople or call center staff.
When a brand’s values have evolved, they need to be embedded within the organization. Firms often try to do this using formal internal comms channels. However, this process needs to be supported by targeting employee management through incentive systems, education and training. It needs to be reaffirmed by management communications across the company hierarchy. Communicating brand values passively on posters, gadgets, a section of the Intranet, or glossy brochures doesn’t sufficiently influence the brand-supporting behavior of employees. It must be clear to customers that brand values pervade the entire organization and its systems. In addition to brand values being embedded in an organization’s culture, processes and systems, another factor that contributes to successful internal branding is high-quality communication.
Internal Branding: how to win employees over to the brand
The core message that a brand conveys to stakeholders is often too abstract or impractical to benefit the internal groups being targeted. In firms with separate divisions, the core message needs to be modified into division-specific messages for it to be understandable and binding. It has to be reapplied for each functional area to trigger the appropriate initiatives and implementation. There are systems and processes that do this, but they cannot be gone into here due to reasons of space. Nonetheless, regardless of how you go about implementing them, one thing remains crucial – core messages must be expressed well. In internal branding, they must be simple, tangible and comprehensible. They must engage the emotions and grab attention; such messages are far more effective than rational and descriptive ones. Surprise tactics cannot be used at the expense of credibility. Another key factor is often overlooked: the acceptance and motivation that comes from the hope of joint success and internal recognition. Such acceptance and motivation arise when employees are continuously shown, and told about, the connection between the brand, their own contribution, and the success of the firm.
The success of internal branding depends on using communication channels, media and event formats in a broad, systematic and long-term manner. This too is often overlooked. A one-off promotion of an internal campaign sends signals that quickly disappear. Internal branding is only effective long-term when management keeps it constantly on the agenda, treating it as a priority, and when they employ methods like social media in a targeted and genuine way. A blog from the CEO is effective even if it’s only updated monthly. Direct, personal engagement with staff by leadership and identifying company managers who personally embody the brand values are more important than mere frequency of communication. New research shows that setting standards and systems is less effective in influencing employee behavior than managers who actively exemplify brand values.
Internal Branding: the investment pays off
When brand values are understood, accepted, incorporated and, finally, acted on by every employee, the brand’s success in the marketplace automatically follows and the company’s entire added-value process conforms to a model that brings the entire organization to a higher energy level. This reduces frictional losses through joint understanding and eventually increases the effectiveness and efficiency of the added-value and marketing processes.
The efficacy of internal branding can be demonstrated by the earlier example of Apple. Apple’s success is partly due to a set of intangible resources, such as the cult status of the brand, which ensures an endless stream of qualified and motivated applicants for jobs at the firm, and a corporate culture that gives every job a high status within a shared mission. “When you are working for Apple you feel like you are working for this greater good,” an employee was quoted as saying in The New York Times. A selective recruitment process ensures that the right people join the organization. They are inducted into the Apple world in courses lasting from several days to several weeks and, step by step, turned into ambassadors for the brand. Employees get to know standards and systems, and experience the enthusiasm of management through direct contact. And they are prepared to pay a price for this. Many new employees accept a lower wage because they can see the fruits of their labor from day one. This combination of factors, which would be extremely hard to replicate, means Apple can even afford not to grant commissions to store employees.
When internal branding is consistently and intelligently implemented, it can increase company performance and raise profits more than most other measures. That alone is sufficient reason to invest as much to promote the brand internally as is spent on external brand promotion.