Creating a Strong Internal Brand: You Can Take it to the Bank

It seems everyone is seeking ways to make the customer experience more personal, intimate and emotional. When even B2B marketers are trying to create “love” for their widgets, you know you are truly in the throes of the “Experience Economy.” If you’re a brand-builder looking to forge similar bonds with your customers in 2007, do yourself a favor - make a quick study of the companies and brands you personally like and dislike…and think about the “secret sauce” that makes them hum.

More often than not, you’ll find that it’s nearly impossible to forge emotional connections with customers if your own employees don’t feel emotionally engaged with you, their employer. Consumers expect the product to work - no gold star for that. It’s the energy, resourcefulness, attitude, and goodwill of your workforce that resonates with customers, creates a sense of intimacy, and keeps them coming back. Connecting employees to the brand in a positive way is the essence of an effective internal brand, which, when engineered elegantly, is as tangible as a brick wall, produces sustainable profits, and is a daunting challenge for your competitors to overcome.

When you take a closer look at relentless overachievers of any size, in any sector, you’ll find a highly engaged and energized workforce as the source code of those successful enterprises. To be sure, these companies do many things well: their products work consistently well, their marketing is innovative, and they keep a close eye on costs. None of these qualities, however, are the key to an overwhelming competitive advantage; that advantage resides in a workforce that inevitably goes above and beyond expectations. While this concept is completely intuitive and easy to grasp in concept, it’s one of the most confounding things in business to get wired correctly! Just ask the fleet of airline guys who have tried for years to duplicate Herb Kelleher’s model at Southwest.

Additional examples abound. Costco is the best merchandiser in the warehouse club space; consumers flock there at twice the rate of Sam’s Club hoping to find a treasure trove of unique and interesting products. (Surprise – did you know that Costco is the biggest seller of fine wine in the nation?) Yes, Costco matches Sam’s Club on price, but they blow them away on customer service. Why? A highly-engaged workforce. The average Costco employee earns 42% more than a compatriot at Sam’s Club, has better benefits, stays in the job longer and is less likely to steal. Clearly, they are more productive and resourceful, as well; Costco’s per store sales of $112 million nearly double that of a Sam’s Club. Costco CEO Jim Sinegal knows that in his commodity-like space, price certainly matters. But he also knows that sustainable customer loyalty is derived from the “quality” of the relationship Costco enjoys with its customer…not the price of the product.

Vernon Hill, Chairman of high-flying New Jersey-based Commerce Bank, was a former fast food franchisee who could never comprehend “banker’s hours.” Mr. Hill introduced a badly-needed convenience and service model to retail banking, living up to the brand promise of “America’s Most Convenient Bank” with the then unheard-of concept of keeping his banks open on evenings and weekends. To be certain, Commerce has handled Job #1 - the product works. Their branches are more visually appealing, there are extra drive-thru lanes to speed service, kids can count pennies in the coin-counting machines, and the branches (uh, stores) are almost always open, often until midnight in New York City.

More importantly, however, Commerce emphasizes service over price. Like Costco, Commerce has more rigor in how they onboard only the “right” employees, pay them more and expect more in return. Hill knows that a better retail experience - not a fractional difference in a CD rate - drives growth…and he has been right thus far. Commerce is the nation’s fastest-growing bank, with same store deposits increasing by 19% over the past 28 quarters and earnings per share growing by 21% in the past five years. JD Power & Associates rates Commerce as the #1 U.S. retail bank, ranking highest in customer satisfaction, convenience, accuracy, products, transactions (all channels) and fees. It seems even cynical New Yorkers appreciate friendly treatment as much as anyone; the bank’s expansion into the Big Apple and nearby Long Island has been a stunning success.

Danny Meyer, owner of such revered New York City eating establishments as Union Square Café and Gramercy Tavern, recently echoed these views in his best-selling book Setting the Table. Meyer served up the “secret sauce” ingredient in his internal brand, writing: ”we work hard to hire people whose emotional skills, even more than how they cook or serve wine, make them predisposed to deriving pleasure from the act of delivering pleasure. Long after our guests have forgotten how much they did or did not like the food, they’ll remember how we made them feel.”

Many on Wall Street think Jim Sinegal and Vernon Hill pay their people too much and don’t charge customers enough. I suspect some might feel the same about Southwest and Danny Meyer. Resisting the “what have you done for me today” pressures of Wall Street, these legendary brand-builders have focused on building a culture and an internal brand that will sustain profitable growth for decades. The lesson – or should I say recipe - is consistent through each case cited: combine the functional benefits of a product that consistently works with the emotional benefits produced only by an extraordinary workforce, and you have the makings of a resilient and formidable brand. Stick that mixture in the oven, nurture it like a soufflé...and good luck to your competition!



Creating a Strong Internal Brand: You Can Take it to the Bank - To learn more about this author, visit Rob Rush's Website.

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