WHAT WE DO
Toughening your Brand for Tough Times
By Lynn Upshaw
Until mid-2000, everybody was a .300 hitter. US corporate earnings grew at an annual rate exceeding 20%. Productivity was at twice the level of previous years. Stock prices seemed to shatter the Law of Gravity as the Dow and NASDAQ skyrocketed to over 11,000 and 5,000 points, respectively. Then things began to unravel, and there’s no need to chronicle again the declines that followed. Let’s just say that the US economy has slipped into recession 20 times since 1900 and you may have an opportunity to live through #21 very soon, the efforts of the Fed notwithstanding. Consequently, now would be a great time to assess the battle worthiness of your brand(s).
One topic that rises rapidly to the top during such an assessment is the concept of value. In our last US recession (July ’90 – March ’91), the term “value” was redefined as something much more than a synonym for “cheap” as buyers began to see value in higher-end, quality products and services. Today, value can be found (at least in some customers’ minds) in a $72,000 Lexus LS430 as easily as in a Target storewide sale. In the tough times ahead, the surviving brands will define value in perfect alignment with what their most loyal customers believe is of most value to them.
Genuine value requires genuine quality, and quality is much more leverageable in the form of superiority. In today’s economic environment, marketers who settle for simple differentiation as an ultimate brand goal are creating an opportunity for more aggressive competitors. In an uncertain economy, some marketers believe that consumers and B2B customers cannot afford to pay for a premium-priced brand with a reputation for superiority. Just the opposite is true. Buyers in such times often avoid wasting their money on products or service solutions that may be “unique” but fail to deliver superior performance. Genuine value – the kind that buoys corporate vessels on rough seas – calls for quality at a reasonable price, not lower pricing for parity performance.
Another axiom that often gets mislaid in stormy weather is the fact that virtually every purchase decision is emotionally based in some way. That emotion can be channeled into brand preference if prospects see the brand as a trustmark they can count on when they are financially challenged. Volkswagen bounced back from horrible sales declines a few years ago by re-creating the kind of superior brand persona that had made the brand a hit thirty years earlier. Apple’s “Think Different” campaign was a persona-driven customer retention invitation that laid the foundation for a successful launch of the iMac and G4 offerings. Harley-Davidson, Sears, Nike, MasterCard, and IBM have all employed emotion to strengthen their market positions It’s a good bet that these strategies will serve their brand masters well even when there is less disposable income in the marketplace.
On a more tactical level, it is critical in wobbly economies that marketers understand the difference between unproductive and productive awareness (a skill never mastered by some of the late great dot-coms). Productive awareness is focused on those markets and prospects that have already shown an interest in purchasing your breed of brand. These loyalists must then be given a new set of reasons to stay tethered to the brand, and those reasons must be explicitly relevant to the new economic times that are crashing in on us. Such persistently astute brand marketers as Nike, IBM, and Southwest Airlines find a way to deliver their messages in the most impact-efficient manner possible in good times and not so good times.
Unfortunately, one slippery slope to avoid is viewed by some as unavoidable, namely, relying on discounting and price promotions that can permanently devalue a brand. While short-term distribution or share battles may require some tactical trimming, discounting can become a potent narcotic that ultimately increases the already rising pressure on earnings. Consider how the McDonald’s brand was hurt by playing the value meal game with the likes of Burger King and Taco Bell in the early 1990s. Or more recently, note what happened at Dial Corp. when the company overstuffed the channel with discounted inventory that ultimately created havoc with corporate earnings. Successful long-term brand builders do not dilute their brand identity, even to prevent short-term share loss.
Paradoxically, the single most important move a brand marketer can take when facing economic challenges may be within the company itself, rather than out in the marketplace. In difficult financial times, every single member of your brand team – and every single co-worker in your company – must be rabidly obsessive about defending and growing your brand. Now is the time to send your people through comprehensive brand training workshops that help them understand why brand building is business building. Now is the time to rally the troops with rousing brand events. Now is the time to have the CEO speak and act with passion about the sanctity of the brand and the need to create a brand momentum that will protect the company against the ravages of a recessionary economy. Strong brand-driven companies such as Starbucks, Charles Schwab, Sun Microsystems, and IKEA are better prepared to cope with difficult financial markets because their people have a better grip on what their brands are, and how they can best be deployed.
We have feasted off of the good times for the past decade and now we must make do with rations of our own making during the winter ahead. May the best-prepared brands prevail... and prevail they will.
©2001 ASM Communications. Inc. Used with permission from Brandweek
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