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 that value.

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 'safer' option.

Change

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.

Typical reaction

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 at all.

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.