Do not neglect your brand during difficult times | Sunday Observer

Do not neglect your brand during difficult times

In a poor economic climate, companies must recognise that consumer retention and attraction is the name of the game.  Pic: Courtesy
In a poor economic climate, companies must recognise that consumer retention and attraction is the name of the game. Pic: Courtesy

When times are tight, the bottom line is dictated by the sense of value consumers place on your brand, or more precisely, how much they are willing to pay for that value.

The value perceived by consumers and actual shareholder value are strongly influenced by brand. 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 freely and take big 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.

During bad times, as consumers feel the pinch, they begin to search for change. Companies need to focus on action 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 mindshare or margin. Those who fail to see their 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 the emotional connections that already exist to regain past consumers that have moved on to ‘high-end’ brands.

Abandoning or neglecting your brand as markets tighten, only makes matters worse. Historically, companies which properly support their brands with cost-effective measures can retain and even gain 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 things out. Ironically, those 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-brand.

Historically, companies who 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 requires 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.

If you absolutely cannot afford to sustain your marketing spend, then at least take the time to think up some clever ideas. The process of innovation is often easier to manage and more cost effective during economic down-times. In difficult times, consumers are more thoughtful, more aware and more focused on what they need.

From a communications stand point, there is a real opportunity to start a new dialog with customers, strengthen those important relationships and connect at a deeper level. By showing off a clear understanding of customer’s current wants and providing some pleasant surprises, you will stand out from competitors who have let this facet of their business falter through inattention.