According to Britt, computing power has given us “new tools and a thriving analytics industry.” I agree, without great data, it is tough to understand a customer’s value and how much we should be investing in attracting or retaining that customer.

Think how much more we would understand about the LTV of the customer by applying analytics. So why are marketers and companies slow to adapt? Jie Chang, VP of Analytics & Customer Insight for Ancxiom’s Global Consulting Organization, quoted in the article, says “…they’re (marketers) often slow to adapt to most game-changing trends.”  “We saw the same kind of things with the Internet in the first 10 years.” (Yikes). “There are so many priorities competing for budget that they think ‘If we can do without it, then let’s do without it”. (Sadly so true… from my experience) Cheng also states…“Once things become measurable and attributable then the marketing organization – in particular, the CMO himself – is held accountable for whether they are spending wisely and generating a return in multiple of their spending.” (Shouldn’t we be?)

Cheng goes on to say “They have to think of the consumer’s view of the company rather than only the company’s view of the consumer.” (YES!!) My experience shows through research that they are most always perceptual gaps between internal and external perceptions, which need to be addressed. One only learns about those gaps through research and analytics.

Cheng suggests there are four stages that companies go through on their way to Math Maturity: Descriptive; Diagnostic; Predictive; and Prescriptive. To learn more go to delivermagazine.com, June 2011.

I thought the article insightful and valuable and would like to hear your thoughts. If you wish to receive my eNewsletter email jane@jfsbranding.com, or visit my website at www.jfsbranding.com.

Similar to a company’s external brand, an employer brand must be managed consistently and exists whether a company actively manages its Employer Value Proposition [EVP], or not. The disciplines used for managing a corporate brand are increasingly used by the human resource and talent management community to attract, engage and retain talented candidates and employees in the same way marketing applies such practices in attracting and retaining clients.

Employer brand management must incorporate every aspect of the employment experience, and the people management processes and practices that shape the perceptions of existing and prospective employees. It supports the external recruitment of the right kind of talent sought by an organization to achieve its goals, and the subsequent desire for effective employee engagement and employee retention.

Internal Marketing

Whereas employer branding focuses on the company’s employment experience, internal marketing focuses on communicating the customer brand promise, and the attitudes and behaviors expected from employees to deliver on that promise. Internal marketing, internal branding / brand engagement takes a more ‘inside-out’, value-based approach to shaping employee perceptions and behaviors.

Corporate Branding

A company’s corporate brand speaks to all key audiences – clients, prospects, investors, media, and partners – all stakeholders – including existing and potential employees. Employer brand is a facet of the corporate brand, not a separate competing brand. The two are inextricably linked and they have to be aligned.

Gaps

The comment, “it’s so hard to find good staff these days,” is an indication that it is becoming increasingly competitive to attract and retain talent (at all levels). With the increasing global shortage of talent driven by an aging population, increased mobility of workers, especially generation Y’s, migration, and technological advances, attracting the right talent for your organization will become increasingly difficult. Other gaps a company may have, include

• A collaborative process between Human Resources and Marketing to define the employer brand within the corporate brand context. Done well, the employer brand can reinforce and support the corporate brand and vice versa.
• Active management of a company’s reputation particularly with today’s advanced technology and rapid communication.
• The level of visibility and understanding of your employer brand proposition throughout the organization to meet your business and financial goals?

Value Delivered

Companies that spend time and money on employer branding reap the benefits. Just a few…

1. Companies that ‘live the brand’ spend less on advertising…companies like Starbucks, Sodexo, SAS, Philips and Google.
2. Companies with consistent, distinctive and deeply held values tended to outperform those companies with a less clear and articulated ethos.
3. Retention costs are significantly lower than the costs associated with hiring, training and integrating a new employee, not to mention time lost when the role is not filled.
4. Companies with a strong EVP/brand recruit the best talent and curb attrition
5. Employees more likely to be engaged and perform consistently at a higher level when employer brand is strong.

Employer brand management should be a priority for companies of all sizes. Remember, while an unsatisfied customer tells ten people about his experience, an unsatisfied employee tells a hundred.

One certainly cannot plan wisely without taking into account the economic and geopolitical realities of our environment. I concur with Howard that business owners and corporate executives must plan ahead by incorporating systemic risk into the planning process and performing detailed scenario planning to manage the quickly alternate low growth/low inflation & high growth/high inflation cycles. In addition, business owners and executives should:

• Maintain a flexible organization in terms of balance sheet, P/L and organizational structure
• Develop & maintain a strategic war chest
• Position the company to take advantage of strategic opportunities
• Minimize operating costs
• Prepare for increased taxes of all kinds
• Minimize financial leverage, and many more key activities

Whether your company is in the planning, restructuring or implementation stage, it should take a conservative financial and organizational posture in order to assure survival as we slowly move to more stable times, yet be prepared to take advantage of strategic opportunities that will arise as a result of other companies’ misfortunes.

Howard Fletcher, Strategic Advisor
Structuring for Growth in a Volatile Economy
howard@howard-fletcher.com 562-685-9921

Image Drivers and Brand Reputation

One of the first and most direct points of contact a company has with its customers is through its employees. At each level of an organization, employees have an opportunity to influence the perception of a company’s brand during these critical points of contact. This impression is called brand image, or brand reputation and the impact of this contact will be either positive, or negative or somewhere in between.

A company’s dedicated and able workforce is an important asset in developing customer loyalty. Long-term relationships and customer loyalty are directly related to the level of service and brand image created through daily contact between the company’s customers and its employees. This translates into a competitive advantage for an organization. The value of customer loyalty is not absolutely quantifiable, but according to the Coalition for Brand Equity it costs four to six times as much to win a new customer as it does to retain an old customer. For most companies –no matter what product or service they offer-the major factor in keeping existing customers happy is the service they receive from employees. Whatever their position, employees have two jobs, one is the work they perform, the other is conveying the corporate image. The second job as Ambassadors of the Brand is to communicate the company’s corporate identity to the outside world. For better or for worse, the image of the company employees project to customers is whatever those employees believe that image to be.

Developing Committed Brand Ambassadors

Employees, who serve as strong brand ambassadors, must be integrated into a corporate brand management program. The responsibility of an organization is to develop an effective means for communicating the company’s corporate identity to all employees. The second piece of the effort is to ensure that employees effectively communicate the brand image to customers.

To create a strong network of employee ambassadors, a company must establish a communication component involving both employee education and feedback mechanisms that include employees in decision-making and engender a sense of brand ownership. Only when employees understand their roles as brand ambassadors, and receive recognition and reward for their roles, can they be integrated successfully into a corporate image program.

Most major corporations have programs and structures to communicate their key positioning and brand messages associated with their brand. This effort helps to mold a corporate culture that can successfully articulate and execute on a brand’s promise. Corporate culture is the image and perception developed through a company’s internal communication. Corporate communication programs shape how employees present the company to the world at large, and whether they will be ambassadors of commitment or indifference.

Building a Brand Infrastructure

There are many ways a company can build a corporate infrastructure that supports the role of employees as brand ambassadors. A successful infrastructure can be achieved by
• Integrating the corporate brand strategy into the company’s overall communication strategy to employees
• Developing a set of brand principals that survive change
• Incorporating and articulating the historical perspective that has made the company great
• Instilling the philosophy of employees as caretakers of eternal brand assets
• Imbuing the qualities and principles that constitute the brand into the corporate culture
• Understanding and communicating the company’s customer profile
• Gathering employee opinions
• Projecting a clear focused image
• Providing strong feedback mechanisms
• Involving employees by defining, recognizing and rewarding their roles as brand managers
• Ensuring that employees who are to embody the image fully understand it, fully accept it and fully feel that they have a role in making it happen.

Major companies realize that strong brands cannot be built without the ongoing support and management by employees. They are critical to its success. Programs must be put in place to make it happen. There is no other way!

Steps taken to improve the bottom line may have proved financially successful, but may have negatively affected the company brand. Lack of focus, smaller budgets, and low employee morale all contribute to poor brand differentiation, relevancy and execution.

The solution is to redouble efforts to understand what customers need today, their perceptions about your company, product or service, and the communication channels each customer segment uses to learn about you.

‘Real’ customer engagement is gained by

• Building an emotional connection by personalizing your brand
• Closing the gaps between internal assumptions and external perceptions to establish relevancy
• Clarifying communication messages so your brand is perceived as distinctive
• Choosing the appropriate communication channels for each customer segment
• Executing your brand promise with excellence

Good marketing companies use the availability of customer information to their advantage. They reinforce their basic brand messages and keep these messages up-to-date and relevant. They may alter communication channels to keep up with evolving communication tools, but they don’t change their basic communication objectives.

Customers use certain products or services because they trust that brand to deliver what they are looking for, consistently. They form brand opinions from the messages they see and hear. When the promises made and inferred in these messages, both functionally and emotionally, are satisfactorily delivered, loyal customers are born and reinforced. Great brands have been built over time by using strong, relevant and consistent communication messages.

Whether the economic malaise ends sooner or later, smart companies will begin evaluating the relevancy of their brand and their ability to successfully compete now.

Thank you for your patience. Jane

Typically these unexplored non-customers have not been targeted or thought of as potential customers by anyone in the industry. That is because their needs and the business opportunities associated with them have somehow always been assumed to belong to other markets.

Look to the long-held assumption that tooth whitening was a service provided by dentists and not by oral care consumer product companies. Until recently, oral-car companies never looked at the needs of these non-customers. Then they did, they found latent demand ready to be tapped. They also found they had the capability to deliver safe, high-quality, low-cost tooth whitening solutions and the market exploded.

This potential applies to most industries. For example, the U.S. defense aerospace industry. The inability to control aircraft costs was a key vulnerability to the long-term military strength of the United States. Soaring costs combined with shrinking budgets left the military without a viable plan to replace its aging fleet of fighter aircraft. The U.S. military formed the Joint Strike Fighter (JSF) program. It searched the three branches of the military – marines, navy and air force – for the commonalities across the three branches that had previously disregarded. This process revealed that the two highest-cost components of the three branches’ aircraft were the same: avionics (software) and engines. The shared use and production of these components held enormous cost reductions.

By reducing or eliminating low value, competing factors, JSF was able to build one aircraft for all three branches that improved value performance and lowered cost, including price per aircraft. The new aircraft called the F-35 was superior to that of the top-performing aircraft for each branch and reduced the cost of each aircraft from $190 million to $33 million.

Kim and Mauborgne suggest there is no hard-and-fast rule to suggest which tier of non-customer should be focused on, but rather to target the specific tier which will yield the greatest results. And to explore whether there are overlapping commonalities across all three tiers of non-customers.

The authors do not suggest companies ignore the traditional method toward market segmentation and the retention of existing customers, but rather to challenge the existing, taken-for-granted strategic orientation.

Blue Ocean Strategy is a best selling book by authors W. Chan Kim and Renee Mauborgne on strategic positioning for sustained performance & profitable growth. They are cofounders of the INSEAD Blue Ocean Strategy at INSEAD and professors of strategy at INSEAD in Fontainebleau, France.

Follow next weeks blog when we will discuss the second tier non-customer and the potential for expanding your market share.

Blue Ocean Strategy is a best selling book by authors W. Chan Kim and Renee Mauborgne on strategic positioning for sustained performance & profitable growth. They are cofounders of the INSEAD Blue Ocean Strategy at INSEAD and professors of strategy at INSEAD in Fontainebleau, France.

VII. Declaring Victory Too Soon

After a few years of hard work, managers may be tempted to declare victory with the first clear improvement.  This is distinctly different than celebrating a short-term win and can have a disastrous effect. Until changes sink deeply into a company’s culture, a process that can take five to ten years, new approaches are fragile and subject to regression.

It is often a combination of change resistors and change initiators that creates the premature victory celebration. In the change initiators’ enthusiasm over a clear sign of progress, the initiatives die. They are then joined by the change resistors who are quick to spot any opportunity to stop change. Once the celebration is over, resisters point to victory, change comes to a halt and tradition begins to creep back in.

Leaders of success efforts use the credibility of short-term wins to tackle even bigger problems. They go after systems and structures that are not consistent with the transformation vision and have not been confronted before. They pay attention to who is promoted, who is hired and how people are developed. They include new reengineering projects that are even bigger in scope than the initial ones. They understand renewal efforts take years, not months.

VIII. Anchoring Changes in Corporate Culture

Change ‘sticks’ when it becomes “the way we do things around here.” Until new behaviors become rooted in shared values and social norms, they are subject to degradation as soon as the pressure for change is removed.

Two factors are particularly important in institutionalizing change in corporate culture

• First, a conscious attempt to show people how the new approaches, behaviors and attitudes have helped to improve performance
• Second, taking sufficient time to make sure the next generation of top management really does personify the new approach

One bad succession decision at the top of an organization can undermine a decade of work. Change efforts are messy and full of surprises, but Kotter’s work in Leading Change gives us a framework to guide leadership and companies through the transformation process.

Throughout the rest of March, we will look at how companies identify their non-users to create a strategy of growth and profitability.

V. Removing Obstacles to the New Vision

As the process progresses, successful transformations begin to involve large numbers of people. Employees are emboldened to try new approaches, to develop new ideas, and to provide leadership with actions that fit within the broad parameters of the overall vision.
A good guiding coalition empowers others to take action simply by communicating the new direction. But communication is not enough.

Obstacles to success must be removed and can be

• Organizational structures where job categories are so narrow they undermine efforts to increase productivity
• Compensation or performance-appraisal systems that make people choose between the new vision and their self-interest
• Bosses who refuse the change and who make demands that are inconsistent with the overall effort

In the first phases of the transformation, no organization has the time or power to change all of the obstacles, but the big ones must be confronted and removed. Action is essential, both to empower others and to maintain the credibility of the change effort.

VI.  Systematically Planning for and Creating, Short-term Wins

Transformation takes time and will lose momentum if there are no short-term goals to meet and celebrate. Without short-term wins, too many people give up or actively join the ranks of those who have been resisting change. In one to two years you should find

• Quality beginning to go up on certain indices or the decline in net income stopping
• New product introductions or an upward shift in market share
• Impressive productivity improvement or statistically higher customer satisfaction ratings

What ever the result, it is tangible and cannot be discounted by those opposing change.

In successful transformations, managers look for ways to obtain clear performance improvements, establish goals in the yearly planning system, achieve the objectives and reward the people involved with recognition, promotions and money. When it is clear that transformation takes a long time, urgency levels diminish.

Commitments to produce short-term wins help keep urgency levels up and force detailed, analytical thinking that can clarify or revise visions.