It’s payout time for companies with high Brand Competitiveness

Dr Chris Baumann

  • Associate professor, Macquarie University
Dr Chris Baumann is an associate professor at Macquarie University in Sydney, researching competitiveness, education, East Asia and customer loyalty. He has authored more than 50 refereed journal articles and conference papers with more than 350 citations. He has been awarded for his research and teaching, including from the Australian government for enthusiastic approach to education. Dr Baumann is also visiting professor at Seoul National University (SNU) in Korea and at Aarhus University, Denmark. He introduced ground breaking concepts: Competitive Productivity, Latecomer Brand, Premium Generic Brand (PGB) and the ‘country of origin of service staff (COSS)’ effect. He has a long-standing relationship with Simon Fraser University (SFU), Canada, as MBA Alumni and research collaborator.

Much has been written since March about the changing and challenging environment and how brands can navigate through the COVID-19 crisis to survive.

There is abundant advice from branding academics and practitioners on how brands should react during times of crises in general. But COVID-19 could well be an unprecedented crisis ‘off the scale’, with challenges far beyond the timeline of the pandemic itself. Suggestions on how to manage the crisis externally include:

Staying in contact with customers in times of social distancing     Adapting processes to comply with government regulations and restrictions and with customer expectations Reducing uncertainty among customers Adapting the brand positioning Responding in brand communication Pushing for digital transformation Engaging in corporate social responsibility (CSR).

There’s also plenty of advice from human resources academics and practitioners on how the crisis and related uncertainty affects employees and their wellbeing, and what companies and brands can do to support their workforce to satisfy basic needs of safety and stability, both shaken by the pandemic.

While focusing on current actions is necessary, we know the past behaviour of a brand in relation to its workforce also has considerable impact on long-term success. And as we navigate through this latest crisis, it’s emerging an even stronger impetus than before.

Competitive behaviour

In our resource and competence-based theory, and in line with service-dominant logic (SDL), we’ve brought forward the idea of ‘brand competitiveness’ (see Winzar, H, Baumann, C and Chu, W, 2018) as vital to customer-based brand value (CBBV) and the competitiveness chain.

Brand competitiveness results from superior resources or competences and how they are managed. This is inextricably linked with an organisation’s workforce. Employees are a primary source of competitive advantage for brands in addition to price, product and service quality, and a vital element in creating brand competitiveness.

Branding academics have repeatedly validated the positive effects of employees’ brand-related attitudes and behaviours, resulting in employee-based brand equity. This, in turn, generates customer-based brand equity (CBBE), and ultimately firm performance through profitability, market share and company share prices.

Yet many brands continue to underestimate the impact of employee-focused branding and do not invest sufficiently in employees and internal branding, despite theoretical and empirical evidence of its relevance. There are a number of reasons:        

  • Limited understanding of the relevance of internal and employer branding         
  • Misunderstanding of employee-focused branding with internal communication or even internal advertising          
  • Focus on short-term profitability            
  • Resistance to change.

In contrast, brands that have proactively engaged in internal and employer branding activities – and invested in building a trustful relationship with their employees in the past, thus resulting in high employee-based brand equity – have substantial competitive advantages in the current pandemic.

Because employees who are cognitively and affectively engaged with the brand they work for will also support that organisation to manifest the right behaviours with customers during times of crises.

The right mindset

Employees with a high level of brand understanding and knowledge are the ones who recognise brand as important to the organisation’s success and who know their own behaviour contributes to this strength. It is these employees who exhibit a higher level of commitment and emotional attachment towards the brand, thereby engaging in brand-supporting behaviours (Piehler, R, King, C, Burmann, C, and Xiong, L, 2016).

The importance of employee brand understanding, identification and commitment in realising brand citizenship behaviour can’t be understated.

These might manifest in not taking advantage of the need to work remotely (and not watch Netflix as opposed to do actual work from and at home), putting in even more effort to support the brand and make sure it survives, making voluntary sacrifices in terms of temporary salary or staff benefit reductions, and so on.

Long and short

Loyal staff will no doubt expect a ‘return on investment’ (ROI) for their loyalty post-pandemic. Yet as history sadly shows, long service with an organisation is often not rewarded.

People have memories of who was supportive, loyal and ‘chipped in’, but companies do not. Our concern is loyal employees now ‘going the extra mile’ to keep their organisations afloat in the disruptive COVID-19 environment might be forgotten in the mix up of (often) hastily conducted reorganisations with departures and new arrivals of key staff.

Looking forward, true ethical brands should do all they can to prevent this from happening; staff that now support the brand through this crisis must eventually be rewarded for ‘taking one for the team’ during COVID-19.

Looking backward, the current crisis may represent payout time for those who have created high employee-based brand equity based on previous investments in staff and internal branding collaboration. Brands that have engaged in building trustful relationships with their workforce have a competitive advantage right now.

It’s these organisations that should find it easier to navigate the crisis and come out faster and stronger than businesses focused on short-term profitability that avoided such investments and thus have low employee-based brand equity.

But wherever your organisation sits now, creating brand competitiveness is ultimately a long-term objective. It cannot be achieved via hastily made decisions or restructuring in a panic or during crises. This approach all too often affects staff mental and physical health and cognitive ability, and staff who are not feeling well do not perform well – not well in the frontline, or the back office. And they certainly don’t contribute wise decisions as mid-level managers.

Customers can ‘feel and see’ these aspects, since they often experience the brand through frontline staff, whether it’s a physical or virtual interaction. They can tell whether an employee’s ‘heart’ is in it or not. If it’s a yes, brand competitiveness is maintained and arguably enhanced; if not, your brand competitiveness is in jeopardy.

This has to be kept top of mind during times of crisis such as the COVID-19 pandemic. Panic is, after all, a very bad advisor. 

- This article was co-authored with Dr Rico Piehler, a lecturer in the department of marketing at Macquarie University. It appeared in CMO magazine, issue 2, 2020.

Tags: brand strategy, marketing strategy

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