Johannes' blog

Brand management starts with your own employees

Working for a Brand Management software company (Frontify), I got intrigued to study the available body of research on brand management. While there is a plethora of research on creating a valuable brand, I found that the concept of employee-based brand equity (EBBE) is often overlooked and undervalued. In the following, I am trying to explain the concept in more depth and why I think it's valuable.

The effect of a company's brand is hard to measure, but a successful one has a tangible impact on pricing. For example, the brand Nike can charge more for a product that might be equal in quality but from a no-name manufacturer. Red Bull has similar production costs to any other energy drink producer but charges more. From a research point of view, this results from brand love, defined as the degree of passionate, emotional attachment a satisfied consumer has for a particular company. This means we have a dynamic relationship with certain brands that can develop to become something like a love for this entity. It is quite crazy to imagine that these are basically corporations with thousands of people behind them. Brand love, in turn, leads us to be more loyal to a brand so that when we are given a choice between two producers, we will pick the one we like better — it makes sense. The other piece is that we are more likely to recommend a brand to our friends and family (word of mouth), thereby becoming a promoter of that brand which is basically the most authentic marketing (which is also free, by the way). So brand love can be translated into a company's financial impact. In research, this is also referred to as financial equity. While brand love and loyalty are referred to as consumer-based brand equity. It's a softer concept, but nevertheless, it describes the number of people who really love your brand.

Drivers of brand equity

Now Employee Based Brand Equity (EBBE) is one among many drivers of brand love and consumer-based brand equity but arguably one that is less prominent in research. While brand love has been predominantly studied from a consumer perception point of view (Drivers of the brand experience, how important consistency is, etc.), EBBE is not as prominent. It describes the concept of a company‘s employees becoming promoters of a brand. Research has figured out a relationship between how employees perceive a brand and how consumers perceive a brand. EBBE is predominantly driven by internal brand knowledge sharing (namely information generation and knowledge dissemination), which allows employees to better understand the brand's values and how they can be implemented. In this regard, it's also essential to call out that consistency is not as important for building successful brands as one might think. With greater knowledge and employee identification, EBBE mainly manifests with better role clarity for employees and also a higher brand commitment. Employees' word of mouth, employee satisfaction, and intention to stay with a company is positively affected by an EBBE.

In sum, EBBE is an essential driver of actual brand equity that translates to financial brand equity. Yet, EBBE is an overlooked factor in building successful brands.