Maintain brand image during tough times
When times are tight, the bottom-line is dictated by the value
consumers place in your brand, or how much they are willing to pay for
The value perceived by consumers and shareholder value are strongly
influenced by brand.
The brand can drive growth in an up-market or protect the company's
value in a down-market. One of the most important, but often overlooked
aspects of a tight economy is the insecurity consumers' experience.
During a bull economy, consumers have more disposable income, spend more
freely and take bigger risks.
However, a bear economy forces people to evaluate their purchasing
decisions with a critical eye towards value. Consumers' spending habits
change dramatically - they take inventory of their costs and related
benefits. If the value is not readily apparent, they could move on to a
During bad times, as consumers feel the pinch, they begin to search
for change. Companies need to focus on actions that take advantage of
the opportunities that change brings about.
Branding in a tight economic environment is all about investing in
consumer retention and attraction. Most companies cut back in every area
of the business and start slashing prices to accommodate the shifting
demand curve. While this may help in the short-term, this strategy can
actually damage the company and its brands in the long run.
Not everyone automatically loses out in an adverse economy. In a poor
economic climate, companies must recognise that consumer retention and
attraction is the name of the game.
You must invest in brand-building to win market share, not just
mind-share or margin. Those who fail to see consumers as an appreciating
asset may soon find their brands and business devalued or defunct.
Brands are valuable in good times and in bad. During tough times,
your brand may be considered by consumers who would otherwise not take
notice or see relevance.
As consumers begin evaluating their purchases on a different set of
priorities, heritage brands can use emotional connections to regain past
consumers who have moved on to high-end brands.
Abandoning or neglecting your brand as markets tighten, only makes
matters worse. Historically, companies who properly support their brands
with cost-effective measures can retain and even gain share in the face
of lower-priced alternatives.
These same companies will be best positioned to enjoy the fruits of
their labour when the economy inevitably returns to growth. Decisions
should be focused on spending wisely, but too often companies do nothing
A company's typical reaction to a slowing economy is to cut back and
wait till things are sorted out. Ironically, the companies end up
damaging their most valuable assets - their brands.
Implementing an internal program that encourages employees to 'live
the brand' brings a company together by providing clarity.
This simple effort can boost employee morale and ensure that their
efforts stay focused and on the brand.
Historically, companies which invested in their brands during hard
economic times retained their core audience, attracted new consumers and
emerged stronger in the end.
Branding cannot be reserved as an exercise in times of growth. To be
effective it needs constant maintenance, perhaps even more so in times
of crisis. Take care of your brand and your brand will take care of you.
Neglect it and you'll immediately feel the ill-effects.