Brand Delivery - For Free
As we talked about the other day with my United Airlines experience, brand consistency often comes down to an individual’s delivery. With all people-facing brands we are at the whim of the brand representative. Thinking about it from their point of view for a second, they have to be incentivized to deliver that brand experience consistently. If we imagine the most successful service brands in the airline industry, Jet Blue and Southwest come to mind in the US and maybe Virgin and Singapore on an international scale. What gives those people greater pride in delivering a unique and consistent experience that elevates their brands?
Ponder that for a while and then overlay yesterday’s news from London where British Airways announced they were asking their staff to work for free for a month to help get them out of the financial hole they’re in due to the economic crisis. In truth, their voluntary pay reduction would be amortized over a 6 month period, but which ever way you cut it, the airline is asking its staff to deliver the brand for a lower incentive. The CEO, Willie Walsh, is clearly behind the initiative as he was first in line to volunteer to work for free for a month. As he’s on £735K a year, critics say he can afford to lose £61K for a month.
In my mind, this could galvanize a “circling of the wagons mentality” and a determination to survive, which could result in a push for even higher levels of customer service. This would happen if the staff felt an affinity for what BA stands for beyond just their pay packet. I’m not sure if this is true.
A more likely result is a disaffected and pissed off workforce who lack the incentive to deliver the BA brand consistently in the air. This has massive implications for the BA brand, which has been determined to differentiate based on a a “full service” promise vs. low cost, no frills competitors. What looks like a short term cost cutting policy could result in longer term detrimental damage to their brand.
What do you think? Would you be prepared to work for your company for less money to help it out of a financial hole?
Note to Egg Strategy employees reading this post - this is not a cheap attempt at testing the waters for a “BA style” wage cut. We just hired more people, remember!
June 18th, 2009 at 1:31 pm
Thanks for the great post, Richard.
I agree that this is likely to have adverse brand value implications. So much of a service organization’s brand value comes from its employee culture, and so much of that is built around a mutual agreement of work terms between the firm and the employees (balance of salary, benefits, work conditions/environment, etc.). Upsetting an established cultural equilibrium is sure to take its toll.
One way they could have approached this differently would be to offer these employees (underwater) stock options in exchange for their service. This would be perceived as a more ‘mutual’ exchange of compensation…One which truly aligns the goals of the organization to those of the employees. This just might have gotten those wagons a circlin’.
June 18th, 2009 at 3:30 pm
Well, the analogy to our business is a good one. We sell smart people. BA sells accomodating people. How much is the consumer supposed to think these services are worth if they know for a fact they are free?
June 19th, 2009 at 7:43 am
Very interesting question Alison. I think if I were served by accomodating people I knew were working for free, I personally wouldn’t value the service any differently. However, I would now associate that value entirely with the employee(s), and not the firm/brand. Any such disconnect in the eye of the consumer can only do harm to the brand, in my opinion.