The stock market has been a little volatile over the last week. Hopefully, it will settle into a healthy market correction. Two years ago, I wrote about the importance of investing in your brand before the next market crash. I’m not predicting anything dire is about to happen this month or anything. And I don’t want to contribute to a self-fulfilling prophecy. But, traditionally, we experience an economic turndown every ten years of so. By that reckoning, we’re about due. It’s not a subject I dwell on but I was reminded about it when I read this recent Forbes article. Readers should rely on professional financial advisors to make their business and investment decisions. But we have had ten years of robust economic growth. Now the Fed is starting to tap the brakes, which is probably a good thing. But who know what effect our new trade wars will have once those dominoes begin to fall? Just sayin’. So now’s the time for small and middle-market businesses to ask, “What, beside price, will bond our customers to us once everyone starts to feel the pinch?”
Brand strategy has to rely on something more than pricing. Because when customers have less to spend, they start looking for bargains. Perhaps one of your competitors will cut pricing to maintain market share. If you can’t give your customer a compelling reason to pass up the bargain and stick with you, only two choices are left to you. You either lose the customer or cut your own prices to below those of your competitor. And that sets off a race to see who can lose the most profits the fastest. Not a very desirable situation. Now is the time to forestall that sad eventuality.
Why now? For two different reasons.
1 – Time
For most small to middle-market companies, it takes about six months to develop a solid brand strategy. Then expect another six months to implement the strategy. That’s the time it takes to develop logos, visual identities, packaging, websites, advertising, etc. So if you started today, it would be about a year before that strategy will even begin to start getting results for you. And the longer your brand works for you, the stronger it is and the more loyalty it builds among your customers. It takes time for the market to become aware of a new brand strategy. Longer still before it becomes valuable to customers. To establish an unassailable bond with your market takes even more time. So if you launch your brand strategy a week before the next recession, it won’t do very much for you. If the downturn hits three to four years after you launch, you should be able to leverage your brand to sail through the hard times.
2 – Money
(It’s always time and money, isn’t it?) Times are good now. And when should you invest in your business? When times are good, of course! Once the recession hits, you’ll be in a cash crunch just like everybody else. Then, you’ll likely to be hard pressed to allocate a budget to invest in developing a brand strategy. They say, in a downturn, advertising and marketing always get cut first. It’s not true. Branding gets cut first. Develop your brand strategy now while you can still free up some budget to do it. It doesn’t take much money. But it does take some.
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Here’s why it matters so much. Every business has a brand already, at least by accident if not by design. The businesses’ market – customers, vendors, employees, and everybody else whose perceptions of the brand are important to its future – already has experienced the business and has a set, aggregate opinion about that experience. But those businesses that have let their brands just sort of happen, without any thought or guidance, have no idea what their markets’ opinion of them is. No knowledge equals no control.
So, when the recession hits, and markets are wondering whether their reduced budgets could be better allocated, the businesses that have given their customers a compelling reason to buy from them, other than price, will be at a clear advantage. Businesses that have established no such connection with their markets will see their customers drift away to less expensive solutions or to other options that make better sense to them in a recession.
A strong brand can actually be described as a strong bond with customers. Customers who are used to a delightful experience want to repeat that experience. They come back over and over again – brand loyalty. And they resist forces that push them to break off the relationship. So start that brand strategy now when you have the time and can make the investment. I issued this same warning two years ago and since then, luckily, the economy has stayed strong. Can we stay lucky for another two years?
Best Branding Reads – Week of October 29, 2018
Brand Innovation: A New Disruption Theory
Don’t know what you’re doing? Great! You can be the next disrupter of markets!
Since 9/11 – Skull iconography on the rise in logo design
Happy Halloween everybody!
How Semiotics Helps Brands Encapsulate Value
I’ve never felt quite up to the task of writing about semiotics in branding. Luckily, the author here is fully qualified and clarifies some excellent points.
Four Elements That Shape Brand Experiences
Another excellent read from BSI. Covers a lot of territory in just four points.
Breaking: “Avatar” will no longer use the Papyrus font in its logo
No font is a bad font. But they get overused by lazy designers and penurious clients. Mistral is another victim. I’m looking at you Sandals Resorts.
Marvel Stadium plans revealed, but mystery surrounds re-brand
How to screw up a brand launch. More is expected of you, Disney.
Employers, your company brand needs to reflect your culture
As I always say: The same brand strategy that attracts your best customers also attracts your best employees.