How many companies do you know that say, “Our people are our most important asset”?

Does that mean that they are at least as important as their customers? The question is, do these same companies spend as much time and energy on their “Internal Value Proposition” as they do on their “External Value Proposition”?

Marketing & HR – Boon or Bane?

If we were to examine a typical Profit and Loss Statement, we would find, among other items, these two areas under General and Administrative Expenses: Marketing (or something similar) and Human Resources (or something similar). Both can be viewed in one of two ways:

1. A Revenue Generator

2. A Drag on Profitability

In fact, it’s not always one or the other. Often, they are both, and they do not necessarily function independently of each other.

If we look at line items in Marketing, they are typically advertising, public relations, direct mail, social media, and the like. When we boil down all of these functions, it’s about resources for making a promise to prospective consumers about the product.

When we look at Human Resources, there are many functions, such as onboarding, payroll, benefits, and talent acquisition. Reduced to their essence, it’s about resources for making (and keeping) promises to those whom the enterprise employs.

People Are Always Responsible for the Product

Before I worked with organizations in my present role, I oversaw marketing within enterprises.

The word on me was that I could outspend an unlimited budget. Doing what? Making promises – getting people to take a chance with their hard-earned money on our product. Although a lot of my experience in those days was in service-based products, the notion of generating trial is similar in product-based enterprises as well.

An industry that demonstrates my point is tourism and travel. Ski resorts are an excellent example. If you are a prospective customer, what are the promises you often see online, in commercials, and in magazines? Magnificent photos of spectacular vistas, snow-covered mountains, smiles, and sunglasses. What an appeal! In reality, when it comes to fulfilling that promise, for many, the last mile to the ski resort occurs in a car. When the customer finally arrives at the resort, often early in the morning, who is the first ski resort employee the customer is likely to encounter? The parking lot attendant, naturally. That employee, typically among the least well-paid, most under-informed and possibly most under-motivated, is completely in charge of creating the first step to an indelible customer experience. Is that first taste of the customer experience engaging or off-putting? Had management invested more in their internal value proposition, would the scales have tipped in favor of engaging?

Only One Chance to Make a Good First Impression

I’d be willing to wager that the marketing department, in crafting and deploying those incredibly attractive promises, easily outspent the labor cost and HR fringes for every one of those parking lot attendants. Gallup’s most recent engagement survey found that roughly only one third of American workers were “engaged”. If two out

of three customers responding to the terrific promise got a “meh” first impression (or worse), what do you think the ROI would be on that fantastic promise? By contrast, best in class organizations get upwards of 70% engagement. So, was the HR expense a drag on profitability, or a revenue enhancer? And why? Marketers are some of the greatest storytellers in the world. They can target the right audience, craft the message to hit all the right notes, and generate tremendous expectations and a willingness to try the product. If it is true that when something goes right, 10 people hear about it, and when something goes awry, 24 people hear about it, then how long will it take for a good promise to make a “so-so” product look or feel even worse? What happens to the reputation of the enterprise, based on actual experience, not the “promise”? That gap between 35% and 70% engagement can have a substantial impact on revenues and profitability.

“Our People Make the Difference”

So, what is the fix? If an enterprise is going to invest in good storytelling, there should definitely be an equal or greater effort to ensure that the product exceeds the promise. In the case of service businesses, it means that the least well-paid must be just as engaged and motivated as anyone else within the organization. Those companies selling “things” ignore the personal piece at their peril as well. After all, who fabricates and assembles those

items, tests them, packages them, ships them, and so on? Isn’t it again often the least well-paid?

Organizations need to invest at least as much in their purpose, mission, vision, values, and why they exist as they do in making promises to their prospective customers in their internal brand.

What is the culture of the organization? The “way we do things here”? What do we value? Do we clearly understand what is expected of us? Do we know where we are headed? The quality of the pictures that leaders create in the minds of their employees is equally as important as the ones the marketers create for their customers. So, to generate the enhanced ROI for our marketers, take the time to invest deeply in the “most important asset” most organizations have: “their employees”. I will be sharing more on ways to cement the internal brand in coming posts on Mission, Vision, Values, and Engagement. See you then!


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