It’s not pretty out there.
Recent economic events do not paint a rosy picture for anyone trying to grow a business. Credit has tightened. Consumer confidence is down. Bad news has rippled through every segment of the economy, and what happens next is anyone’s guess.
Call me crazy, but I believe these down-cycles are actually net-positive. Why? Because they teach us to do more with less and to evaluate every dollar that we invest. These are lessons that will serve our brands for years to come.
Out of necessity, it’s a great time to adopt a fresh mindset. Take this tough market as an opportunity to consider avenues and approaches that may not have been on your radar even a year ago.
The following are some “dos and don’ts” for steering your brand through a tough economy.
Don’t go dark.
An Association of National Advertisers survey, released in August, found that 53% of marketers expect to cut ad budgets in the next six months. As a means of guarding short-term profitability, many companies have already zeroed-out their marketing spend.
The data is quite clear, however, that companies that spend through a downturn tend to emerge stronger once things inevitably pick back up. If your competitors go dark, this is a prime opportunity for you to gain share of voice and market. Take advantage of the chance to hammer home your strengths and benefits while they’re silent.
Quick: Which of your marketing activities provide the strongest returns? If you don’t know, your management doesn’t know, and they will come looking for such seemingly “soft” money soon (if they haven’t already). Once they do that, you’re in danger of violating our first rule above.
Look at each element of your marketing mix to determine what’s driving the business. Then apply that knowledge to future mix decisions. And share that information with the powers that be. This should be a habit, even in the best of times, and it’s not too late to start now.
Begin with the end in mind.
If you’re not managing the brand toward a clear positioning, a tough market will quickly expose that shortcoming. Positioning forces you to define your target, benefits, differences, character and brand equity. All of these help you make better brand investment decisions.
If you don’t have a positioning, once again, it’s not too late. I recommend crafting a matrix in which you assess the perceptions that your competitors currently own. This will tell you where you can and cannot play. Clear-eyed assessment of your present and future strengths will then tell you where you can not just play, but win.
Get focused and get creative.
Once you’ve defined what you stand for, concentrate your resources on that core idea, especially if your budget has been trimmed.
But “more focused” doesn’t mean “less creative.” I encourage you to brainstorm ideas for both your communications and your experience. Work with a small team to generate plenty of ideas in a “money is no object” scenario. Then evaluate the output, asking questions like: Which ideas can be modified to deliver 80% of the value at 20% of the cost? Which can be implemented quickly and at minimal cost, but with strong expected value?
You don’t need to reinvent the wheel. If you’ve been slow to adopt emerging media, for example, it may be time to remedy that situation.
Finally, keep your pants on.
I’m referring here to pricing and promotional strategies, of course. (What did you think I meant?) Fight the urge to drop prices or engage in “push” activities like short-term trade promotions. These are the kinds of things a sales team I’ve worked with referred to as “dropping our drawers.”
Price reduction means margin reduction, and may even undermine brand loyalty, because you’ve implied that you overcharged in the past. Trade deals, if not pulled through the chain, simply move your inventory to another place of business, a short-term fix if there ever was one.
A version of this post appeared in the October 17, 2008, Business Courier of Cincinnati, in the column “That Branding Thing.”
About Matthew Fenton: Matthew founded Three Deuce Branding in 1997 with a simple mission: “To help good people build great brands.” He’s a former CMO who repeatedly led underdog brands to dramatically outpace the market, and now he does the same for the clients he serves. Businesses with revenues of seven figures or more trust Matthew to help them achieve “brand clarity” through core brand strategy and positioning. Matthew is also a highly-rated speaker. Contact Matthew here. He’s based in Chicago.
Copyright 2008 – Matthew Fenton. All Rights Reserved. You may reprint this article with the original, unedited text intact, including the About Matthew Fenton section.