BRANDS ARE JUST ABOUT WHAT HAPPENS ON THE OUTSIDE

In this era of total branding little distinction should be made between employees and customers.

It is a common myth across the business community that brands have a lot to do with what happens on the outside of a business and not very much to do with what goes on inside. This is profoundly wrong. Brands are everything to do with what happens on the inside.

Brands are about much more than appearances

Many people wrongly assume that a brand is just about the logo, the packaging or the advertising and as a consequence are inclined to see the brand solely through the lens of how the brand looks. For these people, brands are the business equivalent of clothing or apparel. If you want your business to be well received (goes the theory) then the best thing you can do is change the way the business looks and smarten up your act. To think this way is to entirely misunderstand what is meant by a brand and, worse, it is closing down a potentially powerful source of competitive advantage.

Great brands tend to spend nearly as much time focusing on their employees as they do on their customers and there is a really good reason for this. Studies have shown time and again that there is a powerful link between motivated and engaged employees and strong commercial outcomes.

Why it pays to focus on the inside

The most celebrated of the models that demonstrate this link was developed at Harvard Business School and it is called ‘The Service-Profit Chain’. This model effectively establishes relationships between profitability, customer loyalty and productivity. The links in the chain (which they regard as akin to propositions) work like this:

Profit and growth are stimulated primarily by customer loyalty. Loyalty is the direct result of customer satisfaction. Satisfaction is largely influenced by the value of services provided to customers. Value is then created by satisfied, loyal and productive employees. Employee satisfaction in turn, results primarily from high quality support services and policies that enable employees to deliver better results to customers.