How to protect your brand in a recession
Your company’s brand is a long-term asset that has taken time to build. You have invested a lot of money and effort to date to get to the awareness level that you own in the marketplace. So don’t be quick to take action and make decisions that decrease its value during hard times. Competitors can quickly replicate your product or service performance; they can meet or beat your prices; and they can enter your channels and markets freely. But your competitors cannot quickly duplicate the relationships and confidence that you have built up with your customers and clients.
Are you thinking about cutting your marketing budget? Nearly 77 percent of marketers indicated that they plan to reduce their media budgets this year. That staggeringly high number is a warning of things to come. The 141 marketers surveyed were members of the Association of National Advertisers and represent a range of industries, including pharmaceutical, financial services, consumer package goods, retail, computers and technology.
If you are forced to make changes and budget cuts because of the recession, here’s how to protect the integrity of your brand as it relates to your all of your stakeholders.
Employees: I mention employees first because if you have a disgruntled and nervous team, they won’t be interacting with the rest of your stakeholders appropriately, causing doubt and speculation on the status of your business. Tough decisions have to be made in a recession and some of them will directly affect your employees. To cut costs you may have to freeze salaries, stop hiring, defer pay increases, cut back on travel, training, etc. You can minimize the impact of these actions and the potential ill will if you act as soon as possible to share and communicate with your employees about the emerging situation. By communicating early and often, employees will have time to absorb the news and factor it into their personal development plans and family finances. Act early and engage employees throughout the organization.
Because employees spend their workday in the trenches, they have a different perspective of the business and how to help. Challenge them to come up with alternative action plans that will enable the company to not only survive, but to come out of any slowdown stronger than ever. Remember, if you don’t keep them informed, and there is information void, it is human nature to fill that void with something. That something may be inaccurate information that can be repeated. And, that may not be beneficial for your brand.
Customers and clients: This is the time when your customers want to hear from you. It is human nature to keep your head down, get the work down and forget to communicate. If you are quiet, your customers will assume you are in trouble and may start making alternative plans.
Partner with your customers and be proactive in looking for win-win solutions. Discuss what you’re doing to maintain service and quality levels, and what you’d like to do to control or reduce costs while creating more value. If a key customer is having trouble and forced to start cutting costs, show that you are a true partner and present ways you can help. That might include a 10, 20 or 50 percent reduction plan in your services. Being proactive will show that you are a true partner, true to your brand.
Also, step up your marketing activities to add selected high-margin new customers while your competitors are relatively less active. You can grab a lot of market share right now without increasing your budgets. Keep in mind that most customers leave their current suppliers due to perceived indifference.
Vendors and suppliers: The vendors/partners that are important to the success of your business are experiencing the same pressures as you are. You don’t want them to fail, as re-establishing processes and expectations with a new supplier is an investment in time and resources you may not have now. One way to create a “win-win” situation is to proactively find ways to get costs out of your mutual business relationship and put in greater value. Explore the activities and steps that both organizations engage in for each piece of business, and ask “What value does this add?”
If there is no clear-cut answer, you should see if some activities can be avoided or modified, and resources shifted to higher “value-add” activities. When the climate improves, your vendors will remember how you worked with them to get through tough times, and your brand and reputation will be burnished as a result.
Investors: Keep the people who have an equity stake in your business fully informed. Many of your equity
investors may also be your employees, vendors, and members of the community. Communicate early and often. By sharing what the organization is doing to proactively meet the challenges of a slowdown, you can manage expectations and protect the company’s integrity.
Community: Community activities and contributions are often among the first victims of budget cuts when times turn tough. This is where you have an opportunity to shine. During a recession, the media often looks for good news. By keeping programs, events and sponsorships in place (maybe at a reduced level) you may get some positive media coverage and the community will think well of your brand long after any recession has run its course. Again, the key here is to proactively communicate with your community partners.
By now you’ve noticed that a pattern has developed. The golden rule of any branding program is to treat each stakeholder of your company as you would want to be treated. Don’t surprise them. By communicating with each stakeholder group early, you shape their expectations so that their experience with the brand more closely matches the brand’s promise. This is the essence of brand integrity.
Do what’s needed to protect your brand’s reputation, and you’ll have done what’s necessary to get the best long-term financial outcome. Don’t forget that communication should go hand-in-hand with any changes you need to make. The companies that have maintained good relationships and tightened up operations will be well positioned to soar when the economy starts recovering, while other companies are stuck repairing the damage.
Marlene Olsen is president of Olsen & Associates, a public relations agency in Reno. Contact her through http://www.o-apr.com.
Heather Ashbridge, who started with Nevada State Development Corporation in 2008, previously served in several roles with the organization, including assistant vice president and loan officer. She is based in NSDC’s Reno office.