It is commonplace to say that the customer is the most important element in a business model and hence you should love your customer, but I advise that you love your employees more so that they can love your customers.

When we think of marketing, the first thing which comes to our mind is customers and the ultimate aim of marketing being customer satisfaction. Conventionally a customer is an external entity and all marketing efforts are targeted towards this external entity and we term this as conventional or external marketing. However, conventional marketing misses a point in neglecting an important market- the internal customers or the employees. 

Marketing to the internal customers and internal branding is critical in building a brand and brand equity, nevertheless, I have observed that it is neglected by most companies who do not mind spending millions on external branding and building brand awareness, associations and loyalty and ultimately a strong brand equity with external customers.

Let us start by asking why is internal branding so important and what is it. Internal branding involves directing our branding efforts towards our internal customers-the employees, and building brand awareness, associations and loyalty amongst them like we do for our external customers. This alignment ensures that the employees are loyal and engaged to the brand and they deliver the brand promise to the external customers thus contributing to the overall brand equity.

Brand Equity is the value of a brand or the premium the brand commands and is a widely used concept for business organizations. It is a multidimensional concept and is conventionally defined from two different perspectives; from the perspective of the organization or the financial perspective called the Firm Based Brand Equity and from the perspective of the customers called the Customer Based Brand Equity. The financial perspective considers the worth of the brand to the firm and treats brand as an asset which creates future earnings and positive cash flows for the firm1 . 

Whereas, Brand Equity from the consumer perspective has been defined as the effect

1Simon, C.J. and Sullivan, M.W., 1993. The measurement and determinants of brand equity: A financial approach. Marketing Science, 12(1), pp.28-52. 

of the brand knowledge on the customer’s response to marketing actions and how the customers react in presence of the brand than in absence of it2 . A brand will have positive Customer Based Brand Equity if the consumers respond more favorably towards the product or services in presence of the brand than in its absence. Apart from these two perspectives on Brand Equity, there is also a third perspective, the Employee Based Brand Equity, which looks at Brand Equity from the perspective of the employees in the organization and is defined as the differential effect a brand will have on the employee’s work behavior and attitude3 . When the employees perceive value in the brand, it is reflected in their work behaviors which adds to the overall Brand Equity as the employees are a link between the customers and products and services. Employee Based Brand Equity impacts the work behaviors and attitude of employees which has an impact on the quality of interaction between the employees and customers. The employees who are involved in the process of value creation and delivery play an important part in brand building and creation of Brand Equity. The three perspectives of Brand Equity interact and are interdependent, and consideration of all three aspects of Brand Equity is important for organizations for a holistic approach to brand management. 

Internal branding can help in building strong Employee Based Brand Equity which leads to manifold advantages for the organization. Some of the advantages include; strong positive word of mouth from the employees, engaged employees who are better prepared to deliver the brand promise to the external customers as they understand the brand well, brand loyal employees who are attached to the brand leading to higher retention, better teamwork and breaking of organizational compartmentalization, better hiring as employees are more willing to work with firms with Employee Based Brand Equity.
 
Conventional marketing and marketing only to external customers is now a practice of the past. Creating and sustaining a competitive advantage today requires co-creating value with internal and external customers. Employees who understand and are attached with the brand are more prepared to manage the customer touch points better. Hence, it is time that organizations start paying more attention to Internal Marketing and Employee Based Brand Equity and the HR practices move beyond the conventions and start focusing on internal branding in recruitment, training, compensations, appraisals and other HR functions.

2Keller, K.L., 1993. Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing, pp.1-22.

3King, C. and Grace, D., 2009. Employee based brand equity: A third perspective. Services Marketing Quarterly, 30(2), pp.122–147.

Source: liberty of HR Thoughts