Value and communication with all primary stakeholders are the muscles of brand building.
Travis Kalanik leans over his desk with his hands in his hair and his elbow on his desk. He clutches his hair in frustration. He is watching a video Bloomberg has got their hands on of him arguing with a broke San Francisco Uber driver over the complicity of the company in the driver’s hard times. This further strains the relationship with his partners, the drivers. And his relationships with his investors and employees and already strained with news of allegations of misogyny and sexual harassment. He closes the laptop screen down. At least the relationship between Uber and its customers is still healthy. (More info: BMB editorial on Uber’s troubles.)
It is easy for us, like Travis, to focus on the relationship between a company and it’s customers when talking about branding, but it is important to realize that your business has distinct reputations with all of its primary stakeholders: investors, employees, partner organizations and customers.
For example, Apple has an exceptional brand with their customers and investors; it has the highest measured brand equity and is currently the most valuable company in the world. But it is known for having a reputation of being harsh to its partner organizations, and hard to work with. Manufacturers, retailers, and banks have all been on the record saying that Apple uses its desirability to dictate terms and push their agenda at the expense of the partner.
Primary stakeholders are typically defined as the people affected by an organization’s actions, but I find this too broad. I define a stakeholder as anyone who would be affected if the company was suddenly to go away. By that measure, the company was creating some value (or liability) for them. These people can be classified into four groups: investors, customers, partner organizations, and customers.
All of the relationships have an exchange of value and an exchange of information. The exchange of value is the essential of the two; the person is not a stakeholder unless you exchange value, no matter how much you communicate with them. See how long your employees stick around if you stop paying them, or conversely, how long they last if they stop contributing. Similarly, relationships with investors, partner organizations and customers will deteriorate if the value exchange ceases.
“[R]elationships are more like muscles – the more you work them, the stronger they become.” – Kieth Ferrazzi 1
Value exchange is when one side of the relationship gives up something in exchange for something they value more. Investors trade capital for future growth or dividends. Employees exchange their time and effort for money. Partner organizations typically exchange something that allows business to continue in exchange for reimbursement. Customers exchange money for having their problem solved.
We often think of brands being built in media and advertising because we see their billboards and Superbowl spots, and we believe that our business’s brand would be just as large if we had that marketing budget. But this is a fallacy. All real brands are built on value exchange; every time there is an exchange of money for problems solving a brand grows. The larger the transaction, the more the brand grows. A company will not have a brand if they don’t make something of value to people no matter how much a company advertises. A brand can grow with the communication channel, but it pales in comparison to exercising the value channel.
Let’s explore these relationships individually:
Types of investors: angels, venture capitalists, private equity, mutual funds, m&a customers
Value from investors:
Value investors expect:
- Benefit for the world
Communication from investors:
- Board of directors.
Communication investors expect:
Types of employee: staff, contractors, contract workers, freelance employees, staffing agency
Value from employees:
Value employees expect:
- Self actualization
Communication from employees:
- Human resources
Communication employees expect:
- Performance review
Types of partners: supplier, retailer, distributor, bank, regulator, trade organization.
Value from partners:
- Access to customer
- Patent licensing
Value partners expect:
- Benefit to their customers
- Compliance (regulators)
Communication from partners:
- Corresponance (phone / email)
- Laws (regulators)
Communication partners expect:
Types of customers: shoppers, clients, voters, donors, audience,
Value from customers:
Value customers expect:
- Problem solving
Communication from customers:
- Customer service.
Communication customers expect:
1 – Never Eat Alone: And Other Secrets to Success, One Relationship at a Time, by Keith Ferazzi