During a recession, brands must adapt. For some it's a matter of survival and for others it can be an opportunity to get ahead of the competition.
As the world begins to recover from COVID-19 businesses face a harsh economic landscape. So how can you ensure that your brand remains viable in tumultuous economic conditions?
In this episode, our experts offer insights on what lies ahead, tips on how to weather a stagnant economy and ideas for how to invest in your brand even when budgets are getting tighter.
*This transcript has been edited and formatted for readability.
Is a Down Economy a Good Time to Invest in Your Brand?
Chris Wilks: Obviously the world is going through massive changes right now. There's a lot of uncertainty regarding the coronavirus. Most people aren't back to their normal work environment yet, and frankly, most business leaders are wondering what this new world is going to mean for their companies.
So my first question to you guys is this, is right now -- as we're facing an economy that no one is really sure about -- a good time to invest in your brand?
Bo Bothe: Absolutely. There's never a bad time to invest in your brand, it just depends on what you're investing. I think early on in the crisis investing in your people, internal communications -- ensuring everybody's on the same page -- focusing on making sure your customers know where you stand and what's going on, I mean, that was probably the right approach.
So when you say investment, it may not be a financial investment, it may be an investment in culture, it may be an investment in just general communications, or it may be an investment in strategy that drives the brand.
Now that we're fully into this, I think investing in getting in front of other people is probably a pretty smart thing to do. How you do that has to be authentic, transparent and smart.
What channels you use to do that are going to be limited based on the current situation and the assumption that many are either working at home or furloughed, or may not be working. And so you're taking all those things into consideration, but yeah, honestly, you're always investing in your brand, whether it be culture and communication internally, or external promotion and visibility.
Jonathan Fisher: Yeah, I think Bo said it really well. I would add the fact that when you're not investing in your brand, somebody else is largely taking control of the conversation in the marketplace without you. That can be internal communications and "water cooler talk" or fear and rumors that get spread with lack of communication, or it can be the competition taking advantage of your absence in the marketplace, on social channels, at trade shows and ads or whatever it might be.
So we always like to remind clients that those conversations are happening without them, regardless of what they do, unless they are consciously participating in those conversations.
Chris: Yeah, Bo hit on it, it's always a good time to invest in your brand, whether it be financially or just spending the time to really hammer down your core values and your mission and your vision. But ideally, you want to do this stuff prior to this crazy upending of the economy, right?
Bo: Yeah, absolutely. I mean, I think that speaks to what Jonathan was talking about. Brands can be:
- reactive (which is probably where you don't want to be)
And I think the proactive part of it protects your brand in the long run.
The Role of Your Brand in an Uncertain Economy
Bo: I remember when BP rebranded and they did that whole green energy thing a million years ago, they came out with this crazy flame flower logo before going green was even a thing. And then they had horrible mishaps after, five years after, 10 years after. And, I remember studying while I was in business school, their stock price didn't take the dip that you would expect it to have taken, just because they had spent years and years trying to transform their brand.
Now sadly, I think they had years and years of just horrible track record prior to it, so it was really hard for them to navigate that completely. But the whole idea of Beyond Petroleum and all that kind of stuff was to protect the brand in a downturn.
So when September 11th happened and then oil crashed again, and then the other oil crash in 2016, there's not much of a blip on them because they had done some work upfront to change the perception of their brand.
Jonathan: I would use my own analogy here, having been sequestered, if you will, for a number of weeks. If you think about your own behavioral changes that you've gone through, where are you investing your time and your money? It's with those brands that you have become most loyal to, right?
You want to see that those local restaurant chains or bars survive. You want to ensure that your favorite products are still on the shelf. You're going to do your best to not substitute unless you have to. You're going to rely on your most trusted advisors for all of these crazy regulatory changes and financial implications and tax requirements as they're moving so rapidly. Do you really want to take the time to start a completely new untrusted relationship out?
So those brands that were strongly positioned in the buyer's mind going into this are going to be those brands that are most likely to capitalize and accelerate coming out of this process.
The Challenges of a Weak Brand in a Down Economy
Chris: Yeah, and you guys actually kind of wrote my segue for me because my next question was going to be, why is a strong brand important in a stalled economy and what can it do for you? And you guys have touched on the positives that can come out of that. On the flip side, are there negative consequences to not having your brand in order in a stalled economy?
Bo: Oh, sure. Jonathan and I were actually talking about this on a call a little while ago. Two years ago, I don't know that we could've made this jump as seamlessly. And separate the technology, the materials, having good people and people with good intentions, just the fact that we had gotten both our financial ship in order and we had gotten our cultural ship in order helped.
We have a very clear vision for our organization. We have a very clear idea of what our values are and what our mission is, and where we're headed as an organization. We had all that stuff buttoned up. We had developed channels for us all to communicate with each other.
And separate the technology that we had put in years ago -- going to laptops and mobile -- our culture, in general, allowing for work at home for flexibility, I think that pivot, the technical pivot was easy. There was some trepidation on my part, at least culturally. Wondering "Can we keep such a tight, friendly culture, collaborative culture together?" That has taken a lot of work over time to make this jump as easily as we've made it.
And I don't say that lightly, we've made this pretty easily. We've got 34 people working remotely and we haven't skipped a beat. Obviously we'd love more business. We'd love for that spigot to come on, but our team has really stepped up.
And part of that's just how transparent we've been in managing our brand, the work we've done for our brand drivers and really driving home our mission and values and vision, and the associations we've built around the brand of where we need to be, who we need to be with, how we need to be, are a big part that.
And I think that's really helped us, and as we see it, helped or hurt some of our customers and clients and our peers, as we've kind of paid attention to what's going on with them.
Jonathan: I think one of the mistakes is companies that don't recognize what the total scope of a brand is. A lot of companies isolate it to their standards manual or their logo or their tagline, or they may think of it as their ad campaign in some cases.
Companies that are actively investing in their brands are investing in those things that drive that customer satisfaction, that drive that retention, that drive that loyalty, that drive that likelihood to upsell, cross-sell, promote, refer, and at the same time, not say negative things about the business.
And so, companies that don't appreciate, for example, values as part of their brand strategy are giving up a huge opportunity to control that behavior from the inside out. A brand starts with that promise, and that promise has to be lived on the inside before it can be consistently institutionalized on the outside.
We always use the example that if your customers appreciate your speed and your value, but your values don't recognize rapid behavior or quick thinking or high responsiveness, then those messages don't end up consistent through the organization.
What Your Brand Prepares You For
Bo: I think that segues perfectly into what you've prepared yourself for, right? Knowing your brand. I think Jonathan's absolutely right, people mistake a portion of the brand, the brand drivers, the external pieces, as the whole brand. And it's not.
It's your associations and where you spend time, and the channels you use. And then it's also the value drivers, the mission, the vision, the values, the way you act and behave, all of those things, the way you deliver the products, speed or technical use or any of that kind of stuff. I mean, all of those things go into that brand.
The brand that you've established prior to the change is the brand you're going to have to live with post-change, at least for a while. And we've seen this in our market. There's a crazy furniture guy, not the one you'd expect here in Houston. It's not Gallery Furniture. He's always kind of set a pretty good brand about helping the community and doing things.
But the Exclusive Furniture guy, "where low prices live" and he's always jumping around and stuff. And then all of a sudden his commercials shift to, "Well, here at Exclusive Furniture, we really care about your safety and security."
And that's not the brand he established for the last 25 years. And so the authenticity is not there, that people will turn them off, or he's going to have to spend time to make that shift. To Jonathan's point, the brand that you're establishing early and the actions that you take around establishing who you are, they project out into whatever new normal there is, and it's really hard to change that behavior or the perception that comes from that.
Jonathan: You have a chance right now to invest in these downturns on the things that maybe weren't perfect going in because they will be stress-tested. They will be exacerbated and increase geometrically when you are under stress.
One of my dad's favorite pieces of advice that I remember from many years ago, prior to getting married, was he said, "Son, if there's anything that's bugging you right now before you're married, it's going to bug you a whole lot more after you're married."
And so, I think there's a parallel there that you could sort of draw on through this, which is, you might as well fix it now because it's probably going to be accentuated even further down the road. And I don't think you want that to be your legacy when you look back on this.
To Bo's point, it has to be an authentic move and investment but left unaddressed, it will only compound the issues that you faced going in.
Chris: Yeah, and not to downplay the seriousness of the negative impact that this has had, but in a way, this can be an opportunity to sniff out some of the shortcomings of the brand and work on some of those things.
One of the things that we noted in our research for this episode is there were some studies done on the heels of the 2008 mortgage crisis. And one of the findings that came out of that was that 60% of brands that go dark during a recession actually slide back on at least one customer metric. So going quiet or pulling back all of your external communications is kind of a proven way not to work.
But what are some of the benefits of a strong brand during a recession? I mean, we know that the purpose of a brand is to get people to buy more at higher prices for longer periods of time. Do those remain? Are there any extended benefits? I mean, what do you guys think about that?
Shifting Focus in a Challenging Economy
Bo: Yeah, Jonathan talked a little bit earlier about loyalty, which I think it goes both ways, right? There are brands that we're loyal to, that we want to see stay in business in a time like this, that we're going to prioritize over others. And I think that the work you do prior to something like this, that allows someone to prioritize you over others, is important, right?
And so, you may have moved beyond "buy more stuff at higher prices." This may be the phase where it's "longer periods of time," where you're focused on maybe the pricing needs to adjust.
The stuff we're seeing with Ford and other car companies where they're foregoing the pricing component to retain the customer and, in turn, build their brand around a more helpful, more communal kind of message. And I think that is authentic. We've seen them do that before. It makes sense. The benefit is it gets someone locked into a five-year contract on paying for a car. I mean, they can move inventory, they can do that kind of stuff.
So I wouldn't say that a lot of this stuff is completely altruistic. I think we'd be naive to think that companies are just helping first responders just through the goodness of their hearts. I mean, of course people and individuals do that, but on the brand side, over periods of time, there needs to be some sort of return.
That return can be a healthy community, it can be the association with doing good, but those things have to be well thought out because as we've talked about before, they can't be disingenuous and because it could blow up in your face. There could be blowback if it's not well-received, if you're picking winners and losers, or if you're not perceived to be someone that really cares that much. And so, you have to be careful with that, but again, very managed.
But at this point, it's the "longer periods of time" is what a brand should be looking at. How do I retain loyalty? How do I retain this customer? And then on the other side of it, how do I help this customer maintain their health so that they can be a customer long term? I think those are some ways you could look at that.
Jonathan: I've heard somebody describe it as the "new abnormal" coming out of this process. And I think that there's sort of, there's a natural curvature to these processes. We've seen it for a hundred years now. And I've personally, in business, been through six different recession-type events. So I can tell you that when we talk about investing in the brand or talk about things that you're not doing, you cannot assume that status quo going forward will be what it was historically.
If you haven't already made the adjustment in your service offerings, your sales processes, your staff augmentation, your call-centers, your technologies, your product features, or whatever else it might be, to plan for the new abnormal, then you're already behind your competitors, number one.
And number two, in terms of very tactical discussions for the moment, let's just say search optimization, well, we know that those keyword analysis and strategies take a while to organically build up. So you can't wait until the market is back and then start the optimization processes then or, again, you'll be behind the whole market in that regard.
So now's a really good time to step back and rethink kind of your current product architectures and your current process structures. Maybe what was a hot seller before will no longer be a hot seller now, or maybe things need to be bundled up, or maybe things need to be repositioned to change their value adds or their incentives.
We have a client that is a chair manufacturer that I'd described as the Mini Cooper of chairs. Tremendous customization, all that. Well, one of the little known facts prior to this marketplace was that they offered a microbial, heavy-duty, industrial clean chair solution. Well, I have to believe that coming out of this, people are going to want to clean and sanitize as much of their offices as possible. And they are uniquely positioned with a product that before was not super attractive to a mass market, but I believe going out has the potential to be a huge seller for them.
So those pages were not front-and-center on their website. Those keywords were not prioritized in their strategies. Their content marketing and other marketing strategies need to adjust. And you can't wait to start making those placements in 120 days and expect to have this new positioning that you might otherwise have if you get in front of it. So I think really that future state planning is critical at this point.
Bo: I think Jonathan's absolutely right about that. You talked about BodyBilt, our chair client, we've also got a banking client, Pioneer Bank, they really stepped up big for American small business. And they could say, "We did a lot of loans," or they could say, "We stepped up big to help small businesses stay in business." Which is a better story there? And what can they do with that moving forward?
I mean, they were being genuine. They're not making a ton of money on these loans, but the reality is, they care about small business. That is their brand. Taking advantage of it right at the beginning is important, but if they don't do anything with it moving forward, if they don't strike while the iron's hot, somebody else will.
I think having a good view of your market is going to be important right now too. What are the other brands in your market right now? The big banks are taking a beating, probably unjustly, for some of the practices that people said they used to give loans, when in reality, they were all just trying to manage how to handle a new process.
All that kind of goes into brand perception in a period like this. So that opportunity, the forward-thinking, the thinking about what's next, I mean, if you haven't been doing that for the last four or five weeks; if you didn't, once you stabilized your business, start thinking about what's next, you are behind and you may be significantly behind with the shift that the economy will make because of this.
Tips for Brands Should Move Forward in a Down Economy
Jonathan: So have those strategy conversations now, have them early, have them often. This is a playing field is changing on a regular basis. Don't think you can set your plan and forget it, and then pull it out of the drawer 90 days from now and expect it to still be viable. I think this is kind of an ongoing dialogue and you need to make small agile moves right now in your approaches to what's happening.
And if you do that and stay on top of it, then I think you'll be truly investing in the future state of your business and you'll accelerate faster and you'll pull ahead of your competition.
Chris: Yeah. So another piece of research that we found actually talked about four strategies or four tenets to maintaining brand trust during a stalled economy.
- Show up and do your part
- Don't act alone
- Solve, don't sell
- Communicate with emotion, compassion, and facts
Outside of those 4, is there anything else that you guys can think of? Are there any tips that you guys would want to mention in terms of how to manage your brand in a time like this? Or do you take issue with any of those?
Bo: I don't really take issue with any of them. I think they all make sense. I mean, authenticity is going to be key.
Keeping your head up. I took enough defensive driving when I was younger to know to aim high in steering. And I think that's a key for this, is to keep your head out on the open road, but also you have to check your rearview mirrors to see what else is going on.
I think that's a good analogy for what people need to be doing right now because, to Jonathan's point, this is a fluid situation. It changes daily. Different things are going to happen with different states. It's chaos.
The more you can be solid on what your plan is and what you want to do, and the stronger you can be about how to make that work moving forward and adjust as needed, I think you're going to be in better shape as we move forward.
Jonathan: I was on a call the other day with about forty other business development professionals from many different companies and one of the things that was brought up and discussed repeatedly was that we should not look at the current situations as problems, but as challenges. And when we present the conversations internally to our teams, it's "what is the challenge here and how are we going to approach this challenge?"
I think there's a lot of negativity and there's a lot of despair and there's a lot of emotional stress in the marketplace right now. That applies to your business, your employees, your families, your spouses, your loved ones that may be sick or potentially at risk of being sick.
So I think having the right mindset through all of this, regardless of the strategies and the tactics, and regardless of whether you're early or late to the game, is about approaching everything from the perspective of this is an opportunity and it's a challenge.
Chris: Well guys, I think that about wraps us up today. I really want to thank you guys for your time. This has been really great, and I think our audience will find it pretty insightful. So thanks guys. Stay safe out there.