I have worked as a marketing analyst and branding strategist for nearly 20 years. From working with individuals seeking to create a personal brand to multi-billion dollar international conglomerates who want marketing strategies that can be applied across the globe; I’ve had the good fortune to experience and learn about business as it pertains to a vast array of industries. In working as a consultant with hundreds of companies over the past two decades; I’ve come to believe that regardless the size of the company and industry there are principles to building success that are universal. When you look at historical successes and failures in the business world, it becomes evident that these principles are not only universal; they are absolute – they are truth. ~ The definition of “truth” as I am applying it to this article means “Conformity to fact or actuality” (another word for “actuality” is “reality”).
In business there are truths that are born of our understanding of numbers and math, truths born of the physical laws of our universe, and truths born of the social nature of our species and the constructs we have chosen in our societies. These constructs are formed by laws, accepted ethical and moral standards, and the adherence to principles provided by historical knowledge; all of which current cultural conditions are an extension of. Human society has always advanced its collective knowledge by assimilating the information learned by previous generations and expanding upon it. New discoveries are not actually new; they are an expansion into a new arena of understanding that is typically grounded in a previous discovery.
Our understanding of the world around us is constantly changing, expanding, and growing. Humanity has come to accept that change is a constant variable in any construct we devise; be it social, political, or economic. Change is a great variable to embrace if long-term success is your goal; but change has to be metered and managed to avoid making costly miscalculations which could instead prevent success and lead to catastrophic failure. We must often look into our history for relevant examples of success and failure (I am a firm believer in comparative analysis and historical modeling) for the knowledge they provide is a vital resource for establishing guidelines for growth.
Too often I’ve witnessed companies make decisions which have devastating long-term consequences for their brand. It truly amazes me when a group of highly successful and intelligent people choose to ignore historically established principles (be they political, social, or economic) when making decisions which could potentially cause irreparable damage to their company’s brand projection and/or perception and therefore limit their prospects for future success.
I’ve also seen a trend where after years of focusing on big-picture strategic data; many executives lose the ability to see past the various reports they rely on for data on their company’s status. This is where many take serious missteps regarding their company’s business operations which results in a lasting negative effect on brand presentation and client/customer brand perception, resulting in a downward spiral of diminishing market share. The unadulterated truth is that there appears to be a disconnect between logic and reality for many of these business leaders.
The following points outline the key arguments I make to companies with a large retail workforce to illustrate the faults in their approach to brand management.
• Actors, actresses, spokespeople, mascots, clever branding campaigns, ongoing branding efforts through any number of marketing strategies when presented through any number of media outlets, etc… work to reinforce key conceptual messages regarding your brand identity but they are not and never will be the face of your brand. Wherever your company has a point of contact with your primary customer base - the individuals who manage those relationships are the true face of your brand. They are the real-world brand ambassadors for your company and ultimately they have far more power regarding the delivery of your message than the best campaign Madison Avenue can produce.
• You cannot adopt the mentality that your employees are nothing more than numbers on an expense sheet or P&L. If you lose sight of the fact that they are individuals with similar dreams, aspirations, needs, and fears as yourself; you risk making decisions that can have irreparable consequences to your workforce morale and thus your brand presentation and perception. A severely damaged brand perception among your key target demographics will ALWAYS equate to a diminished market share; it will negatively impact your revenue stream(s) and if severe enough can end your business.
• Most large corporations trust the responsibility of their brand presentation to employees that hold the lowest positions in their personnel structure. Think about it. It’s a reality that crosses nearly all industries and market segments – the main customer interface in most large sales/service oriented business is conducted by entry and low-level non-management positions.
1. Think about a large retail chain - Now think about the people who are the day-to-day interface with the majority of that retail chain’s customer-base; cashiers, floor sales staff, and stock clerks - not store managers and regional sales administration.
2. Think about a large bank with thousands of branches - Now think about who has the relationships with the majority of each branch’s customers; tellers, bankers, and branch managers and not market directors, regional directors, or division presidents.
• Think about the irony that many of these highly visible national companies spend millions of dollars a month on expensive branding, marketing, and advertising campaigns. These campaigns are typically presented with a call to action to prompt customers/perspective customers to walk into one of their locations to shop their products/services. A retail location where the primary representative of their brand will become the first company representative they come into contact with. From this moment forward the majority of the customer’s brand perception will be influenced by and related to their perception of the company representatives they interact with. In the vast majority of retail businesses, from clothing stores to banks to cell phone stores to large appliance super-centers the first company representative these customers meet is typically an hourly wage or sales commission/non-management employee.
• It is a reality of human nature that if a person feels they were treated unfairly they are more likely to share that negative experience with others than if the experience was positive. Follow my logic here – if people are naturally prone to sharing negative experiences then why do many companies treat the people most responsible for setting the tone and establishing a brand perception with their primary client-base in a less than positive manner?
Let’s run through a scenario where a large company with thousands of retail locations across the United States launches a multi-million dollar branding campaign which marries some regional and national marketing initiatives capped with an advertisement (call to action) for a special promotion for those who come into one of their locations during an upcoming holiday weekend. This campaign is voiced by a famous actor and features a famous sports celebrity/athlete.
As expected there is a 3-5% increase in foot traffic into this company’s retail locations during the weekend. This represents a potential increase in business by 1-2% - equating to tens of millions of dollars. There’s just one problem; imagine how these new perspective customers are going to perceive this company’s brand when the person responsible for projecting the brand and establishing a relationship with the customer:
• Just got off an impersonal group conference call with a Division President who notified them that their work force was being cut in half with no notice.
• This Division President was too busy to give thousands of dedicated employees his full-undivided attention (for it was clear he was walking somewhere rapidly) as he thanked them with zero discernible emotion for their service; informing them that they’d find out in the next 24 hours if they were part of the 50% staying and assuming additional responsibilities while taking a pay cut or if they were part of the other 50% who would be unemployed in less than a month.
• Now imagine how that employee feels about their publicly traded company posting the highest stock dividends in the company’s history after 9 straight quarters of continued profit growth.
• Add the knowledge that their commission structure had been capped recently killing the incentive to work harder to earn more and causing many of their top salespeople to leave for other companies. That in the wake of these resignations new replacements had not been hired instead those left behind have been expected to work harder for no additional incentive.
• Imagine how they must feel to read that their company is spending $20 million dollars on a branding campaign focused around the company’s dedication to helping people make their dreams come true.
• Lastly, try to imagine what that employee feels about the company that is about to throw them away or worse offer them a “new position” in a greatly restructured division where they will have greater responsibility and accountability with less pay and smaller bonus incentives.
Can you imagine what message they will project to the customers they meet as they come to the realization that they are a disposable resource to a group of people who think numbers on a page can in any way quantify the contributions of an individual? Do you think that employee is going to present that company’s brand in a positive manner?
Here is the truth – the company in this case study has just wasted millions of dollars in brand development and support, marketing strategy and implementation, advertising design and placement only to undermine all of it by completely undervaluing and marginalizing the most important people in their workforce – the people who represent them with their main customer base/target market.
I admit it sounds a bit extreme and far fetched but sadly this is a real scenario that has actually happened inside a Fortune 500 company in recent months; a company that has a long history of claiming financial success through “the hard work, dedication and ingenuity of our diverse workforce.”
Can you imagine the confusion this mixed message has sent to the employees of this company that are directly responsible for projecting this company’s brand to their customer base?
There has been a discernible pattern of policy implementation by this company which many of their front-line employees (the ones who have the most contact with their clients) has perceived as "punitive" and "greedy" for they see the increased revenue they are producing and the resulting stock and dividend reports yet they've had their incentive plans cut and have experienced two waves of significant workforce reductions. It is evident to me that the administration of this company has lost their way and are now engaging in policy implementation which will have lasting negative effects on their brand perception and market share.
There is a direct correlation between job satisfaction and profitability. There are countless historical precedents which show that companies who reduce incentives, disallow the replacement of workforce attrition, and engage in workforce reductions during times of profitability undermine employee trust and morale. Enacting polices such as these (most commonly associated with increasing profit through expense reductions) sends a negative message to employees regarding the company’s perception of their value. Expense reductions should be considered carefully and only as a tool to get expenses under control.
Unfortunately many companies have taken to cutting expenses as a way to boost profit which is successful in the short-term but extremely damaging in the long-run.
True profitability and financial stability comes from revenue growth and is not born from cutting expenses which increase hardships for your workforce and erode morale and productivity.
Companies that downsize their workforce to boost profitability need to carefully consider their business growth/attrition rates. If a company, such as the one in the case-study above, cuts their workforce to boost profits and not to address business attrition, they leave fewer people to do the same amount of work as before. This means that employees become accountable for additional responsibilities and liability. If workforce reduction is coupled with a change in incentives which does not reward the employees that remain but instead further reduces their pay; it becomes a recipe for disaster where low employee morale, apathy, and even a desire to damage the company out of spite can take hold.
If the employees responsible for the main customer interface lose faith in their company’s leadership it will negatively affect their customer interactions and ultimately undermine growth and damage brand perception.
This is where an outside consultant fluent in internal marketing can be of great service in identifying the scope of the damage and devising a strategy for reversal. Internal Marketing is focused on the inner workings of a company and how brand perception is affected across different departments. When paired with an Integrated Marketing approach (where all aspects of a company’s business model are considered when developing strategies for business growth), Internal Marketing analysis can be a powerful tool in correcting internal employee brand perception.
For more information on how you can improve your company’s brand message, marketing strategies, and market position, please contact me!
© Copyright 2015, Jonathan Patrick Hyde, All Rights Reserved.