Brands May Profit If Companies Invest in Employees

Published on June 27, 2014

Bauer Professor Part of Team Researching Employee Contribution to Brand Equity

Betsy Gelb is the Larry J. Sachnowitz Professor of Marketing & Entrepreneurship at Bauer College.

Betsy Gelb is the Larry J. Sachnowitz Professor of Marketing & Entrepreneurship at Bauer College.

For businesses looking to differentiate themselves among competitors in the marketplace, the best investment might be empowering employees with training and a shared understanding of the organization’s brand, according to a team of experts that includes a C. T. Bauer College of Business professor.

Betsy D. Gelb, professor of marketing and entrepreneurship at Bauer College at the University of Houston, says the research was sparked by wanting to know what employees contribute to the value of a brand. Gelb and her research partner, Deva Rangarajan — a Belgian sales force management and customer experience management expert — interviewed marketing and human resources executives in the United States and Europe to hear examples of employee influence on initial purchase and repurchase by consumers and industrial buyers.

In research published in the University of California-Berkeley’s Haas School of Business journal California Management Review, the pair point out employees’ impact on brand equity as the source of the perceptions and feelings of potential and current customers toward a particular brand.

“The employees who influence brand equity are those who make the brand what it’s best known for,” Gelb said. “It’s up to top management to say what they want their company’s emphasis to be, but employees make it happen.”

Gelb and Rangarajan say that such employees are “elements of the brand,” but they may also be “brand ambassadors.” Their research indicates that brand ambassadors specifically go beyond assigned job responsibilities when representing their company.

Whatever role an employee plays, companies need to dedicate funds and training resources to ensure that employees understand how they can make the brand “special” to customers. It may involve going beyond product knowledge and demonstrating that a company is innovative, for example, or is identified with a particular national culture.

“It’s a bit of a challenge completing research like this because not everyone is willing to talk to you,” Gelb said. “It took us several months to complete, but the executives who participated were often able to offer concrete stories that can help other managers assess the importance of their employees in regards to branding.”

This ability to assess employee value matters greatly when a company is considering significant layoffs, Gelb notes. In all likelihood, layoffs are undertaken to cut costs, but sensible companies keep the employees who make the brand what it is, and the cost-savings of a layoff may be diverted to reward those employees and thereby keep them with the company.

“It’s up to the managers of these companies to provide that motivation for their employees if they want to see results,” Gelb said. “You can take a basic marketing class and learn a simple success model for business, but eventually you find that it’s more complicated than that. You have to understand that the cheapest solutions are not always the best ones when it comes to branding. Companies are finding that you have to invest in your employees in order to see positive results.”

By Danielle Ponder