Importance of Investing in Brand During a Downturn
Branding in a down turn is all about investing in retaining your customers, (and attracting new ones) and keeping those lines of quality communication open to both employees and customers. You may have considered or even cut budgets to accommodate a shifting demand curve but cutback strategies such as this can actually do more damage to your company and it’s brand, especially if this involves team, or sales & marketing budgets.
During down turns, the bottom line is dictated by the sense of value consumers place in your brand or more precisely, how much they’re willing to pay for that value. Historically, companies who invested in their brands during challenging economic times retained their core audience, attracted new consumers and emerged stronger in the end. It has also been proven that such cutbacks impact and prevail into the following economic cycles after a recession, which is a worry for the longer term growth curve.
Market Share
Investing in brand-building wins market share, mindshare and margin. If you fail to recognise your consumers or employees as appreciating assets, you’ll soon find your brand or business becomes devalued, or worse defunct.
Many progressive thinkers view recessions as an opportunity space because recessions expose brand weaknesses in companies – this is because consumers become much more selective, more price-conscious, far less forgiving and often abandon brands which fail to give them clear, relevant and meaningful value.
Downturns then are excellent times to steal or solidify market share and build your brand value, as weaker brands die off or falter and the remaining strong brands become a beacon for consumers ripe for change.
Invest to become Brand-centric
A clear brand proposition is far more important than ever as consumers look for new ways to work within their shrinking budgets. Visionary companies often recognise this and use this time to seize/build market share while their opposition are in ‘pull back’ mode. To use an analogy, to win a war, you lead from the front, not from a fallback position.
Why not use this slow down as an opportunity to reassess and strengthen your brand to drive increasing value for customers. Support your brand with cost-effective and proactive measures that continue to retain or even gain share off your competition who jump into the fray to compete on pr
Take these examples,
- In 1987 Nike, following the ‘87 US Stock Market downturn, actually tripled their marketing spend and emerged from the recession with profits nine times higher than going in.
- Pizza Hut also took advantage of this recession, promoting themselves heavily, while market leader McDonald’s, cut back. This investment significantly paid off and narrowed down McDonald’s category lead.
Focus and resources to strengthen your market position and brand
Companies who cut back and ‘wait things out’ end up damaging their most valuable of assets, their brand. This inaction begins to cut those communication and relationship ties and trust which bond a consumer to that brand in their minds and hearts.
Consistent Delivery of Brand Promise
Consumers form opinions about your brand, whether you proactively manage that experience or not. Investing and spending are not same, CEO’s must maintain strategic perspective and invest in being brand-centric (with team and customer) to rebound stronger.
Basically your brand and business are in a position to either contribute to this ‘fear’ mentality or diffuse it. Brand Equity is only built through consistent delivery of your brand promise over time and connections made during times like this are more often stronger than those made in times of prosperity. The reward is improved consumer trust, commitment to your brand and loyalty.