Branding Begins at Home

By Steve McKee

One of my firm’s clients – a regional pizza chain – rarely advertises, never discounts, won’t issue coupons, and doesn’t even deliver. Yet they’re one of the most beloved brands in town. The secret to their success? A powerful, genuine, carefully cultivated culture that recruits, hires, trains, and rewards polite, smiling teenagers who deliver consistently pleasant customer experiences.

The company is careful about whom it hires, how it acculturates new employees, and how it induces them to live up to the brand’s values. As a result, customers are happy to come back again and again—and pay full price. The chain generates sales per store equal to or exceeding those of the world’s biggest, most valuable restaurant brands.

Contrast this with an experience I recently had at one of those big chains. I asked a simple question about how big its soft drinks were—I wanted to know how many ounces were in each size, because these days you never know if what you’re ordering will come in a Dixie Cup or a gallon jug.

The kid who was waiting on me gave me a somewhat snarky reply: his words may have been “small, medium, and large” but his tone said “duh.” When I clarified my request, his retort was a masterpiece of indifference: “I. Have. No. Idea.” Then silence. No apology. No “let me check on that.” No nothing.

Granted, this was only one experience, but such a thing should frighten any brand doing business in the age of real-time tweets, reviews, and rants. Employees have always held a lot of sway on how brands are perceived but never more so – and with higher stakes – than today. It’s surprising that companies don’t do more to nurture corporate culture through genuine and sincere internal branding efforts.

The reason, I think, is that we too often consider branding in communications terms—advertising, public relations, promotions. In reality, there’s really no way to separate “the business” from “the brand.” A brand is the sum and substance of every experience customers have with a business. No clever billboard, touching TV commercial, or cute YouTube video can measure up to the impact of real-world experiences someone has with a brand. That’s why the most important target audience for any company is the people who have the brand on their business cards (or name tags, polo shirts, and ball caps).

Management guru Peter Drucker famously said, “Culture eats strategy for breakfast.” Nothing will turn even the best brand strategy into bacon quicker than an unhealthy corporate culture. Companies such as the local pizza chain understand this, but the biggest brands often don’t get it. They’re too preoccupied with external communications, driven by the incessant pressure to deliver short-term results, and hindered by internal silos. Cultural branding is one arena where the advantage definitely goes to smaller players.

The most notable example of this advantage has to be Zappos. Tony Hsieh launched Zappos, quickly expanded it, and turned the company into an attractive acquisition target by focusing relentlessly on culture. He rightly believed that brand and culture were two sides of the same coin. “If you get the culture right, most of the other stuff – like great customer service, or building a great long-term brand, or passionate employees and customers – will happen naturally on its own,” Hsieh said. He put his money where his mouth was.

Instead of spending millions on marketing, Zappos put in place a deliberate hiring practice involving multiple rounds of interviews, an intensive four-week training program, and a stint for every employee (regardless of department or job title) fielding customer calls. In an effort to ensure that everyone who clocks in at the company would truly buy in to its culture, Hsieh offered a $2,000 bonus to anyone who wished to quit during the training period.

That meant that the 99 percent of new employees who stayed on board demonstrated their buy-in (literally) by turning down $2,000. Hsieh became so confident in the commitment his employees felt to his brand that reporters who visited the company were encouraged to wander around and engage with anyone they wished to. Few big brands would be willing or able to make that offer.

Francis Schaeffer, a noted 20th century theologian, said that if you control the media, you control the culture. Hsieh did that by paying close attention to the signals Zappos sent employees from the day they were hired. This is branding’s first task, and it’s one way small companies can beat bigger, better-funded competitors.

Before you embark on your next big external branding campaign, consider whether your efforts might be better focused in the human resources department or company cafeteria—or in enhancing your benefits package, revamping your bonus system, or fixing your air conditioner. (Uncomfortable employees make for uncomfortable customer interactions.) Whatever the case, make sure you nurture a culture that corrects (or rejects) employees who operate outside the brand promise. Otherwise your advertising efforts may be for nil—or worse, backfire.

It may take time and it won’t be easy, but this is the best way to have the most impact on how your brand is perceived. Once a company figures out how to keep culture from eating strategy for breakfast, it can use them both to eat its competitors’ lunch.

Originally published on Bloomberg Businessweek

Steve McKee

Co-founder and author, Steve specializes in addressing the most meaningful problems. Call Steve when you want to change the world. He’ll have a thought (and some research) on that.

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