Staff build (and destroy) brands: December 07, 1998 issue of New Thinking

December 07, 1998 New Thinking:
Staff build (and destroy) brands

Website content management

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December 07, 1998

Staff build (and destroy) brands

By Gerry McGovern

"U.S. corporations now lose half their customers in five years, half their employees in four, and half their investors in less than one," according to Frederick F. Reichheld, in his 1996 book, The Loyalty Effect.

I don’t know about you, but I think these are quite extraordinary figures. Surely, American corporations are worried that this situation exists? And is it any different in Europe or elsewhere?

There is a strange irony in Reichheld figures – customers are more loyal to American corporations than either staff or investors are! Do staff and investors know something customers don’t? And how long will it take the customer to find out?

Customer Relationship Management is all the rage these days. It’s a new name for old stuff. It used to be that companies looked after their customers as a natural part of doing business. Somewhere in the downsized Eighties, as the knives were out and slicing, that simple philosophy got cut. Now, in the enlightened, pre-millennium dawn, it has been rediscovered like some magic formula that will boost profits and value.

Looking after your customers means firstly looking after your staff. Loyal staff make for loyal customers according to a recently published study by Towers Perrin. Reporting on the study for the 1to1 Marketing newsletter, Britton Manasco wrote that, “The research suggests that companies with employee turnover rates of 10% or less have as much as a 10 percentage point customer retention advantage over companies with employee turnover rates exceeding 15%.

"The implications are huge. Increasing customer retention just two percentage points can add six percent, or $60 million of value to a typical insurance agency with $1 billion in revenues, according to the study. A five-point improvement can add $140 million in value.”

Peter Jerram, writing for NewMedia.com, has stated that an essential step in building a brand on the Internet involves getting your employee focused and motivated. “In the physical world, branding is typically the province of a small group of brand strategists and product managers,” Jerram wrote. “In cyberspace, however, hundreds of workers may be posting to the corporate Web site in ways that can influence brand perceptions.”

"When you develop a brand program, the primary audience is employees," Ken Morris, president of corporate communications firm Siegel & Gale stated. "They must understand what the brand promises so that they can translate and interpret."

According to The Pubs Group, “the corporate side of branding is a significant cultural act. Your corporate culture -- the way everyone in your company thinks, feels and acts about their role in the relationship -- forms a critical side of the triangle.

"This will manifest itself in the way you structure customer service, in how you make difficult changes to the way you do business, in how you include your customers in your business decisions and how you reach out to your current and prospective user base. You can't fake this with clever copywriting either. Corporate culture starts at the top, permeates throughout your company and manifests itself at every point of customer contact. For better and for worse.”

For better or worse indeed. On the Internet, staff can be your ally or albatross. It’s your choice.

Gerry McGovern

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On the Internet, staff can be your ally or albatross. It’s your choice.