Feeling the Pinch?Then it's time for some BRAND AID
One hopes, that in times like these, business management is focused on the overall health of a brand. However, a typical reaction to an economic recession, without a strategic approach in place, ends up damaging its most valuable asset: the brand itself. Nurture it and you'll always be safe; dismiss it and you'll see the immediate effects of decay and neglect.
Brand Advantages During a Recession?
It is important for any size business to understand that recessions need to be addressed positively. It may not seem realistic, but recessions do have their advantages. The importance of recessions in forcing change for the better cannot be emphasized enough.
When feeling the pinch of a recession how does one go about BRAND AID? Recessions are tough times and management/owners often find it difficult to face the pressures of receding bottom lines. Character is tested greatly by restricted cash flow and lower sales. The last thing anyone wants to do is to lose even a slight portion of hard-earned brand equity.
According to Anthony Pappas, CEO of the Pappas Group, “In these cash-tight times, marketing budgets and brand-building activities are often the first cost centers to get the axe. But rather than slashing the budget and crossing your fingers, refocusing your marketing and brand-building initiatives can help you stay top-of-mind with customers.”
Focus on the Overall Brand
It’s important to stay calm and not overreact to a temporary phase even when it looks as if it will go on forever. To do this, however, recessions require an increased focus on the overall brand. Once a brand has established itself, it can easily become complacent. Brands get a huge wake up call during a down-turn in the economy to turn the brand inside out and look at exactly what they are providing to the marketplace. Don’t hesitate and try to wait it out.
Now is the time to ask some very important questions, find and implement strategic answers:
- Is my product or service the best it can be?
- Where is my brand weak?
- Am I giving consumers good value for the money?
- Are there new options I need to be exploring for emerging markets that can be implemented at a low cost?
- How do I give consumers confidence in my brand during a time of immense insecurity?
- Am I reaching my customers effectively with the marketing dollars I have to spend?
After a thorough and honest brand review and audit stay focused on implementing these initiatives for success and healthy brand.
One of the important but often neglected aspects of a recession is the insecurity that it causes everyone. Brands can use this period of insecurity to make assurances of quality as well as other reassuring signs that help the consumer go through an uneasy period with greater confidence. The moral support that is provided by a brand at this time could go a long way towards building enduring relationships with the consumer. Consumers tend to cling even stronger to a known brand and or a comforting voice to help guide them toward a wise, prudent decision during tough times. Most importantly, remember the recession will go away but your brand won’t.
If you don't have a high quality product or service, let’s face it, you're not even in the game. Don’t bank on price being your competitive edge…because someone can always undercut your price. Focus on having a fair price that delivers value. The real competitive edge you have today is how you treat your customers. As Wal-Mart demonstrates daily “be passionate about your customers.” The one thing your competition can't take away from you is the relationship with your customers.
Even if brand sales are falling, be careful before announcing a drastic reduction in price and don't compromise quality. If market share is falling due to competitors discounting their brand excessively it may be a good idea for your brand to avoid discounting. No one wins a discounting battle. The damage that this sort of scenario causes to a brand can be irreparable when the economy eventually rights itself. Give your brand some credit as a viable long-term entity and inspire a positive brand association in the consumer's mind.
However, if the recession has led to new processes or cost savings that help deliver higher value to the consumer at a lower price then there is cause to think seriously about offering a permanent price reduction or value add. This would show the brand in a good light especially to consumers who are looking for this kind of benefits. The bonds that brands build with consumers at such times through strategic price reductions or value additions are powerful and distinguish a brand from low cost labels.
Stay Focused & Take Action
Further, Michael Dunn, CEO at Prophet, warns that it's actually more damaging than doing nothing at all. "The process of branding should not magically stop during an economic downturn. Keep in mind that customers and prospects are still forming opinions and gathering experiences whether you're proactively managing your brand or not."
Spend Marketing Dollars Wisely
Don’t overlook the importance of your online presence. Instead of simply spending less money in the same areas, spend it smarter by ramping up online marketing activities. It’s more cost effective and according the Pew Internet & American Life Project, 81% of Web users go online to research products or services before they buy. Those are your prospects. Get in front of them with more aggressive search and online advertising campaigns.
However, as you move more online, don't forget other branding initiatives. Many organizations, especially small and mid-size businesses, do away with brand-building activities — such as print advertising, public relations, direct marketing and broadcast media — in tough economic times, simply because their competitors are doing the same. Instead, use that herd mentality to differentiate your business. Step up brand awareness by having a presence in those channels just as your competitors are leaving them. You can often score media buys at a discount, and even modest investments can reap big rewards: Once the economy brightens and competitors rush back, customers will be familiar with you and long forgotten your competition.
Tough Times Don't Last but Tough Brands Do
Look at how successful brands like Coca-Cola, Microsoft, Mercedes-Benz, McDonalds, HP, IBM, Wal-Mart and more continuously reinvent themselves while staying relevant and retaining the trust of their customers. Their brands continue to succeed…no matter what! Small to mid size business can gain by learning from their successes and failures and emulate them at times like this.
The bottom line is that branding is essential to the overall health of an organization. Given that, smart marketers won’t ignore the facts. Instead, they’ll take action today, and leverage their brand and avoid losing valuable ground to the competition.
A great brand requires a mix of focused strategy and consistent corporate image, for information on graphic design services, consult our buyer guide.