Inside-Out Branding

TMI is the company with which we are affiliated, Janelle with TMI US and Paul with TMI New Zealand. The heart and soul of the TMI brand always has been to inspire profound behavior change so that our clients (individuals, teams, and organizations) can better meet their objectives. In order to do this, TMI as a company has paid serious attention to its own internal behaviors.

Many of TMI's consultants joined the company because of the profound impact a TMI program had on them while they were participants. They liked the experience so much that they were drawn to teach TMI's branded products. TMI has successfully pulled and pushed its consultants and staff to live the behaviors that are taught in TMI programs.

TMI: an Internal Analysis

One of TMI's programs, Time Manager, places an emphasis on quality that has been carefully thought through. For example, our program directors will spend hours setting up a seminar room. When they're finished, all the participant materials have been placed on tables within a defined, measurable range. The brand impact on the participants when they first walk into a room with this type of setup is persuasive that TMI is an organized company. If you visit an international TMI meeting, you will see approximately 150 people using the Time Manager planning tool, or working the same principles on Microsoft Outlook or their PDAs.

TMI also offers a program called A Complaint Is a Gift. People inside the organization really do say thank you when they hear complaints—most of the time.

Humor is highly prized as a cultural value in TMI. A lot of time is spent entertaining each other at international meetings, sometimes to the point where we fall out of our chairs with laughter. As a result, many people have been with the company for decades. TMI, while not perfect, is pretty consistently branded from the inside out.

From Time Manager Workshops to Culture Change Consulting

By the early 1980s, TMI had already achieved a remarkable brand status in Europe with the Time Manager product. So, it was not too surprising that Scandinavian Airlines (SAS) came to TMI for help with branding and changing its culture to be an on-time, business airline. This work with SAS was later recognized by the American Management Association (AMA) on the occasion of its seventy-fifth anniversary. To note the event, AMA compiled a list of the seventy-five most significant decisions its members believed helped define the very nature of management. Number one was the decision by Moses to bring the Ten Commandments down from Mount Sinai. Another of those seventy-five decisions was that made by CEO Jan Carlzon to implement TMI's company-wide service brand initiative at SAS. Every single SAS employee went through a two-day culture change program that set the stage for how the airline was to deliver the SAS brand, targeted to business travelers.

One aspect of this process that so impressed AMA was that the same message was delivered in cross-functional groups. For the very first time, a mechanic could be found sitting next to a pilot. A vice president could easily be surrounded by ticket agents and janitors. This intervention was, as far as is known, the first time (1981) that the same program messages were offered to everyone in a large, major corporation.

Part of the notoriety of this process resulted when, the following year, SAS was named the world's number one airline. What really caught everyone's attention, however, was that SAS went from a major financial loss to a huge financial profit in one year's time. The two-day TMI brand experience program focusing on individual behavior that pulled the best from people was not the only step that SAS took to change and refocus its brand. Managers led and completed 120 internally generated projects that ensured SAS delivered what it was advertising, the on-time business airline.

Approximately a year later, TMI landed the contract to educate 38,500 British Airways (BA) employees in a program called Putting People First. That phrase became government-owned BA's mantra. Prime Minister Margaret Thatcher wanted to privatize the airline and sought the highest possible stock price. A year following TMI's intervention, British Airways was named the number one airline in the world, and shortly thereafter the airline was successfully privatized. Some twenty years later, old British Airways hands still talk about the strength of the uniquely BA service culture that was created. Here's how Sir Colin Marshall, CEO during that period, described the strategy behind his decision:

I guess the importance of brand management came home to me during my Norton Simon days, when I was responsible for Hunt-Wesson. That experience ... helped me realize that instilling a brand culture is very important in a service business because a service business is all about serving people who have values, ideals, and feelings. It helped me realize that we needed to see the product not simply as a seat but more comprehensively as an experience being orchestrated across the airline. That orchestration was the brand. ^[3]

Inside-Out Brand Model

While conducting this work with SAS and BA, TMI began laying the groundwork for a model that today we call Inside-Out Branding. It is a model that spells out the requirements of successful culture change projects and also helps explain why so many customer service interventions and branding projects fail.

Quadrants 1 and 2 in figure 4 represent organizations whose business models require limited customer-staff interaction, such as Coca-Cola and Morton Salt, both dominated by manufacturing, distribution, and brand development. Most consumers of Coca-Cola, which because of its brand differentiation belongs in quadrant 2, never interact with representatives from the Coca-Cola Company. To begin with, Coke rarely tastes different, bottle to bottle or can to can. About the only time consumers have problems with Coca-Cola is when they get a flat one dispensed through a tap. Coca-Cola and Morton Salt have effectively used traditional brand marketing communication (marcom) strategies to differentiate their brands to the general public. This has saved them from performing like a nondifferentiated quadrant 1 commodity.

Figure 4: Inside-out brand model

Marcom typically emphasizes product promises, or pull marketing. Quality is implied if not explicitly stated. Customers are told what to expect from a product. If done well, marcom "delivers" customers to try products and services. Manufacturers of products such as Coca-Cola pay greater attention (and advertising dollars) to the messages that entice customers to decide to make a first-time purchase than they do to creating an experience where on-brand service delivery helps cement repeat sales. Once the product is in hand, continued advertising entices the customer to make repeat purchases.

The return on investment (ROI) statistics that advertising agencies cite regarding successful marcom interventions are almost exclusively about quadrant 2 products. Quadrant 2 is where most of the world's successful brands can be categorized. Of the top 100 brands, only 25 are service brands. Yet the service economy accounts for over two-thirds of the developed world's gross domestic product. ^[4] We predict this 25-to-75 ratio will change in the next decade as more and more service companies become adept at branding their service and thereby build brand equity.

Three Defining Market Challenges

Today's quadrant 2 marketing world is affected by three defining market challenges prevalent since the early 1990s.

1. The standout challenge. It is increasingly difficult and expensive to make a brand stand out from the crowd today solely using advertisements. So many products are essentially the same that the consumer has come to the conclusion if one brand is not available, then another will do just fine. To be noticed, some ads are so clever it is impossible not to watch them on television. Their cleverness, however, sometimes makes the messages so obscure that the viewer has no idea what product or promise is being advertised. Inundation marketing as practiced in the past has less impact today than it did in the past.

2. The proliferation challenge. The sites where advertising can be placed have exploded in number. Consumers see and hear ads everywhere—on television, on radio, in magazines, in newspapers, on moving vehicles, all over the Internet, flashing on elevator video displays, embedded in movies, on flyers, on billboards, on products, and even cut into hairstyles. The once-dominant major television channels are being challenged by strong cable stations, and most homes receive hundreds of channels. When promotion includes hiring young people to stand at a stop light and loudly discuss a certain product so passersby can overhear the conversation, then proliferation is probably too mild of a word to describe what has happened to marketing.

3. The consumer cynicism challenge. Many consumers are cynical about the sheer volume of advertising messages luring them in a certain direction. The public has become much more educated about its consumer rights, and it expects advertising promises to be delivered. ^[5]

Quadrants 3 and 4 describe organizations whose products and services have highly concentrated personal customer contact, including retail stores, the hospitality industry, technology companies with a great deal of customer technical support, professional services, health care, education, banking and finance, government, insurance, and entertainment. These types of industries have little chance at success if they do not pay attention to how their brand is delivered by staff.

Because of the higher margins possible with differentiated offerings, most companies would obviously prefer to occupy either quadrant 2 or quadrant 4. The alternative is to compete primarily on price. Businesses that sell their products with limited personal customer contact can use direct and specific quick marketing fixes to gain market share and build brand equity. Businesses that want to create a branded service experience, however, have a much harder row to plow. Efforts must be ongoing. They must be systemic, impacting every aspect of the organization. And they depend upon delivery by empowered staff. In short, to succeed in quadrant 4, businesses need to brand their service experiences in very clever ways. They must also generate a service culture with committed staff and effective service delivery processes.

Classic Marketing Mistakes When Defining Brand Space

Many marketing professionals believe that branding is predominantly, or even exclusively, a marketing function. Furthermore, they see branding residing exclusively in the marketing department. We recall talking with a group of executives whose senior vice president of marketing was not on board with the service branding effort the company was instituting, especially as it was being encroached on by operational staff. At one point in an animated discussion about brand space, he asserted, "What are you talking about? Our brand is our logo." His comments were met with gasps and then stunned silence from his colleagues around the company.

They were light-years ahead of him. He had clearly missed the point of what this nonmarketing, branding team was attempting to do. The team would have better agreed with UK Renault Brand Manager Marx Waller, who put it this way: "Brand management is essentially about culture change." ^[6] Unfortunately for the vice president of marketing, the CEO of the company heard about his remarks, and he is no longer with that company.

Let us review how we have described a brand: an identity and reputation shaped by the beliefs that consumers have about products, services, or organizations. Such beliefs are formed as a result of all the interactions that the public has with the product, staff, and organization. This imperative must be a critical consideration for marketing specialists within service organizations with a high level of customer interaction.

Indeed, we believe that the influence that each and every staff member can have in shaping the perceptions about a brand is becoming progressively more important. Today's customers are able to interact directly with a much wider range of employees within organizations. One telling example of this expanded communication is e-mail, a massive means of communication that is often informal and colloquial. Every one of these interactions can have an impact on shaping perceptions about a brand.

While branding as a concept is peeking its head out of marketing departments, in order to be fully communicated, branding must reside "everywhere" in organizations. Fiscally responsible organizations must use the power of brand to differentiate their products and service offerings from competitors'. ^[7] This requires, at a minimum, intense communication and cooperation between marketing (to lead the branding effort externally) and other departments (to lead the branding effort internally). ^[8]

^[3]As interviewed by Steven E. Prokesh, "Competing on Customer Service: An Interview with British Airways Sir Colin Marshall," Harvard Business Review (November 1, 1995): 100.

^[4]See Nicholas Kochan, The World's Greatest Brands (London: Macmillan, 1996), and Christopher Lovelock et al., Services Marketing (London: Prentice Hall Europe, 1999).

^[5]For a complete discussion of the death of push marketing, see John Ingall, "Exploiting the Brand Experience," Admap, no. 426 (March 2002).

^[6]As quoted in Tyrell and Westall, "The New Service Ethos."

^[7]Seventeen out of twenty brands fail in their first two years of being introduced; those numbers are not that dissimilar from how many companies fail in their first two years. Susanna Hart and John Murphy, eds., Brands—The New Wealth Creators (New York: New York University Press, 1998).

^[8]This is particularly true today when ad agencies are aware that advertising does not have the pull it used to have. First, there are so many more places to advertise; no one placement gets as wide exposure as it used to, except perhaps events such as the Super Bowl, which is astronomically expensive for ad placement. Second, television watchers either mute or ignore their sets when a commercial comes on. Third, marketing experts now know that people like to "discover" their own brands, found through word of mouth. See "NBC Hopes Short Movies Will Keep Viewers from Flipping," New York Times, Business Section, August 4, 2003.