Successful Brand Strategies for the Recession and Inevitable Recovery
Wayne Attwell - Senior Brand Strategist, Bold Horizon
The news is full of doom and gloom stories, enough to make you lose hope. We're in a recession. We all know that, but what can you do to survive AND prepare your company and brand for success in the inevitable recovery?
Don't focus on the recession - rather prepare for the recovery! Survival in the recession requires discipline and courage. Success in the recovery requires vision and commitment, right now.
To succeed, right now you need:
- Discipline
- Courage
- Vision
- Commitment
RECOMMENDATION A (the obvious one)
Keep investing in your marketing programme at a similar or slightly higher percentage of sales revenue or projected revenue (the actual dollar value may be lower than your current spend however).
It's important not to expect the same results or ROI that you got before the recession - think of it as an investment in preparing your brand for the inevitable recovery. Your brand needs to be "top of mind" at that stage in order to enjoy maximum benefits and growth.
Become your own customer
If you're still doing some advertising (I hope you are) then you need to make sure your investment generates maximum results by ensuring that your brand strategy is right. Ask yourself these questions:
a) Are you talking to the right people? Make sure you are talking directly to your target market and using the right media titles, communication channels etc.
b) Do you fully understand how your prospects make purchase decisions? What do they value, what makes them buy from you and not your competitor? Without a clear understanding of these factors you're shooting in the dark.
c) Does your message and offering effectively address those prospects' needs, value system and buying criteria? You must match your value proposition to their needs - it's a marketing fundamental. Give them what they want, not what you think they should have!
There's a great saying that sums this up - "You can't be a bullfighter until you have been a bull".
RECOMMENDATION B (an alternative, low cost option)
a) Make a list of all customer "touch points" where your brand interacts with the market, your customers and prospects.
b) Review and analyse the list and then strategise how you can make the experience of interacting with your brand and company more effective and memorable.
Turn your customers into disciples
How can you excite and delight your customers at zero cost? I have just returned from a visit to South Africa, where for many years the level of service across most industries was, at best dismal. This time I was pleasantly surprised to find a huge improvement in service across all touch-points.
I guess the upcoming FIFA World Cup in 2010 has a lot to do with it, but the important thing is that I really enjoyed the retail service experience and how special I was made to feel. I now find myself telling everyone who asks about my trip, how great the service was (and not how bad the crime is). Now that didn't cost them a cent, but it sure added value to my experience of the "South Africa" brand. In fact, you could say I'm now a disciple by default.
Never forget that WOM (word of mouth) advertising is the most powerful form of promotion, and it costs nothing to generate, other than a bit of effort and discipline. In other words, you need to "out-service" your competitors!
Don't discount your product or service
A typical marketing response in a recession is to cut prices. Reducing prices in a recession necessitates a reduction in resource, ultimately leading to deterioration of service delivery. This is a downward death spiral!
Here are some interesting (scary!) numbers...
Roughly speaking, based on an initial profit margin of 33%, a 5% price cut requires around 15-20% increase in sales to make the same dollar profit (depending on whether you look at $revenue or unit increase). More startlingly, a 15% price cut could require up to 60% increase in sales to make the same dollar profit! Now 5% isn't exactly a show stopper and it's unlikely to do much for sales volumes. Even a 15% price drop won't generate additional sales revenues anything close to what is required to recover lost profit margin.
So if you were prepared to sacrifice 15% profit margin to get sales (typical recessionary discount strategy) then you'd be better off keeping prices at current levels and rather lose 60% of sales - the net financial result is the same. However, if you cut prices now you will find it much harder (maybe impossible) to lift them when the economy recovers. In effect, you erode your brand's value and trap yourself into a low-cost market position.
Price cuts may generate some short term gains, but they place you in a weak position to take advantage of or to maximise the inevitable economic recovery. The recovery is a given. It may take 12 months, it may take longer, but it WILL happen. How are you preparing your brand for it?
Torture your website
Your website should be a powerful sales lead generating tool. To get the most out of your website investment there are a few important things you need to have in place:
a) Your site must be optimised for effective search engine and Google results. This is not a given and most sites are NOT optimised (good news for you). The key aspects required to feature in Google are the URL page names, keyword relevance and density, meta tags and backlinks to your site. Without these, a high result in Google search is not too likely.
Basic optimisation of your website can be a once-off investment. You can turn your website into a powerful lead generating machine for a cost similar to that of a small direct mail campaign, a medium sized newspaper ad or a decent Yellow Pages ad. The great thing is there are no recurring costs (unless you want to further optimise your site).
b) Does the site structure encourage visitor inquiries? Is it intuitive, do you have a strong call-to-action, is it easy to make an inquiry?
c) Who in your team responds to web enquiries and how quickly do they respond? This is a key "touch point" for your brand. I recently sent an email to the international consumer goods giant, SC Johnson regarding one of its products that didn't seem to be performing as well as it used to.
The enquiry section of the website required me to download a Word template which I then had to populate, save onto my PC and email as an attachment! Honestly, you would think they would have heard of online submit forms.
It then took them about 3 weeks to reply, with the usual excuse that they had been so busy blah, blah, blah. So not only am I a bad advert for their poorly performing product, but I'm definitely NOT a disciple for their brand. Sadly, they have lost a golden opportunity to excite and delight me.
So in summary, here are the key success factors for marketing your brand in the recession:
- Invest in your brand
- Become your own customer
- Turn your customers into disciples
- Out-service your competitor (don't cut prices)
- Torture your website