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MANAGEMENT
How to achieve brand
traction
HSBC has continued to infuriate its shareholders over increases in the
remuneration packages of its top executives over the past four years.
HSBC argued, including in their most recent annual report, that its top
executives are on salaries signiﬁcantly below the average of their peers
at other global institutions, and that such increases are necessary
in order to attract and retain top talent.
This raises an interesting question:
how was HSBC able to build one of
the world’s leading ﬁnancial services
brands with such miserly pay? My
research on the remuneration of
employees suggests that it is due
to HSBC’s stellar brand that it is able
to pay below the industry average.
In the same way that strong brands
don’t need to compete on price for
customers, they also don’t need
to compete on pay for talent.
THE PULLING POWER OF STRONG
BRANDS
Consider the following data for
retail bank trainees in one of the
largest markets in the world. The
leading bank was rated 26% above
the industry’s average brand index
score, whereas the number six
brand, a leading global but lagging
local bank, trailed it by 25%.
I was able to examine hiring data
for their trainees − where hiring
branches were located at exactly
the same building blocks. Trainees
at the top brand bank earned 1.6%
below the industry average. Those
at the number six brand earned
7.8% above the industry average.
To add insult to injury, the
quality and productivity measures
of the top brand’s lower paid
trainees were higher. In other
words, the stronger brand was able
to hire better people for less. This
is a relationship that exists across
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industries and managerial ranks.
Given that people costs make
up more than two-thirds of a
typical retail bank’s operating
expenses, these numbers are
signiﬁcant. Unfortunately, they are
rarely considered as part of the
returns to brand or branding and
therefore escape the notice of the
boardroom, where sales ﬁgures
prevail and discussions rarely centre
on issues such as brand.
Boards may even consider
branding as ﬂuff. This may not
come as a surprise given that only
about one in ten chief executives
at global ﬁrms have ever worked
in marketing. What this means is
that brands are often stuck in the
communications box, managed
by marketers who do not speak
the language of the board, and
who are often low in the corporate
pecking order.
When boards fail to recognise the
potential power of branding, they
can be more likely to make strategic
decisions that damage the brand
and undermine the long-term value
of the business. One example of this
is where boards take cost-cutting
measures, such as outsourcing
activities to low-cost centres, at the
expense of quality control, cultural
issues and customer intimacy.
These kinds of efﬁciency pressures
can permeate an organisation.
I have come across more than
one ﬁnancial institution that has
the brand promise ‘we listen’, but
incentivises its call centre staff based
on the number of calls handled
per hour. These kinds of trade-off
between brand and efﬁciency are
seldom clear-cut, but they are biased
by the functional perspectives of the
decision-makers.
PEOPLE ARE THE BRAND
The brand is not just a logo,
advertising, or a tag-on bit of ﬂuffy
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‘When boards fail to recognise the potential power
of branding, they can be more likely to make strategic
decisions that damage the brand and undermine the
long-term value of the business.’
‘…the stronger brand was able to hire better people
for less. This is a relationship that exists across
industries and managerial ranks.’
marketing material; it is at the
centre of a successful organisation.
And the processes that are core to
the business − people, operational,
and ﬁnancial − need to be aligned
to deliver a differentiated strategy
and brand.
Unfortunately, a study by
consultancy The Brand Inside
indicated that for 60% of sampled
organisations it was unclear who
was responsible for building the
internal brand in order to support
the external promise. It also
revealed that different departments
seldom, if ever, come together to
synchronise their efforts. This is
why I led with the remuneration
data above – to win attention
for brand outside of marketing,
especially in the area of human
resources. Firms need to recognise
that it’s people, not advertisements,
who deliver the brand to the
customer.
As Amazon’s Jeff Bezos has
remarked: ‘A brand isn’t about what
you say … it’s about what you do.’
People also destroy a brand. Various
measures show that over twothirds of customers defect to other
companies because of the way
they were treated by employees
or because of indifference shown
by a company employee. Most
executives acknowledge this. Yet,
a recent survey by The Brand Inside
on the alignment of the ‘three Bs’
− business, brand, and behaviour
− showed that less than one in
ﬁve organisations agreed with the
statement, ‘Our brand promise
to customers has clearly been
translated into desired behaviours
across the whole organisation’.
FS FOCUS ISSUE 54 | NOVEMBER 2011
Achieving alignment of the ‘three
Bs’ is a joint outcome of marketing
taking on a new role − driving
internal change and coordinating
the delivery of the brand promise
across functions − and HR taking
on a more strategic role, one where
it is central to delivering the brand
promise and ﬁrm strategy.
Indeed, the most powerful brands
have built a corporate culture that
underpins their brand or brands.
This creates an authentic customer
experience that leads to a difﬁcultto-imitate competitive advantage.
It also implies that there is no such
thing as the optimal corporate
culture − only one that effectively
delivers a company’s differentiated
brand and strategy. Recognising the
effect of a strong brand on people −
and of people on brands − is a good
starting point for aligning efforts
across corporate silos such as HR
and marketing.
LINKING BRAND AND STRATEGY
A critical shortcoming that ﬁrms face
in developing powerful brands is
the woeful disconnect between their
marketing and HR functions. Instead
of championing the brand, HR is
often responsible for commoditising
the ﬁrm’s own products and services
by having a generic people process.
Recruitment adverts are more
bland than on-brand, with different
logos adorning the same tired copy
next to near-identical images of
dynamic and diverse young adults.
Job descriptions, key-performance
indicators, development
programmes, incentives and rewards
tend to look similar across many of
the competitors in a given industry.
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In addition, many people have
similar educational and social
backgrounds and (often) have
worked for one or more competitors
in the past. Company values such
as innovation, trust and customer
focus are largely shared among
competitors. Even the current HR
buzz topic of ‘employer branding’
misses the point. It is typically
associated with generically creating
a great place to work, but it is not
about creating a differentiated
organisation in a strategic sense. This
begs the question: if not through
its own people, how does an
organisation create a differentiated
brand?
‘Firms need to recognise that
it’s people, not advertisements,
who deliver the brand to
the customer.’
Most ﬁrms within a competitive
set have a similar brand positioning
because they target the same
customers − to differentiate
themselves they must therefore
deliver the same brand promise in
a better way. Building brands from
the inside out is, in my experience,
the greatest opportunity that
ﬁrms have to do this: through the
behaviour of their people.
This requires a process that takes
employees through the ‘six As’: from
attention, to awareness, acceptance,
advocacy, action and adherence. The
action needed to engage people at
each stage depends on the particular
situation, for example, business as
usual, a brand turnaround or
a merger.
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Consider MD Anderson, the
world’s leading cancer treatment
centre. A new brand-based
induction programme more than
halved its ﬁrst-year employee
turnover and increased patient and
physician satisfaction. This result
echoes ﬁndings from research ﬁrms,
such as the Corporate Leadership
Council and Gallup, which identiﬁed
that employees’ understanding of
the link between their work and
company strategy is the single
biggest driver of their engagement
at work.
A global research study by
a professional services ﬁrm further
highlights the intimate link between
HR and marketing. Based on
global analysis of three data sets
− employee, brand and customer
− they found that brand-based
training was the most signiﬁcant
predictor of customer satisfaction
and brand ratings.
Finally, one of my clients,
insurance ﬁrm Axa, went through
a rebranding effort starting in 2008.
Axa aimed to become the top ﬁrm
in its sector by being ‘available’,
‘attentive’ and ‘reliable’. At the time,
the Axa brand was not trusted by
customers and was seen as being
‘cold’. In response, Axa created a
taskforce made up of people from
its marketing, HR and internal
communications teams. The ultimate
goal was to change the company
culture and build a power brand.
To do this Axa’s cross-functional
team worked together to translate
the core brand attributes into
behaviours and then created
metrics to monitor these. This
had a signiﬁcant effect on Axa’s
customer satisfaction index, which
has improved each year since the
rebranding was performed.
The Axa brand also became rated
the top global insurance brand by
consultancy Interbrand in 2009.
ESTABLISHING BRAND TRACTION
With visible top-level sponsorship
and long-term engagement,
companies can align their
organisations and culture to deliver
the brand promise from the inside
out. This leads to what I call ‘brand
traction’, but requires a shift in
mindset and an alignment of
systems, structures and processes.
Brand traction is achieved when
people engage in self-replicating
behaviours that consistently deliver
the brand promise. Then HR
becomes a true brand champion and
marketing’s greatest ally.
Professor Nader Tavassoli
Professor of Marketing, London
Business School and Non-Executive
Chairman, The Brand Inside
www.thebrandinside.com
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