As I write this article in the safety of my home during ‘lockdown’, the world is in the middle of the Covid-19 pandemic, which has claimed the lives of 165,939 worldwide so far and is continuing to rise.
Given these desperate times, it may seem that there are far more important issues to concern ourselves with than marketing and managing brands. However, as businesses struggle to stay afloat and individuals watch their careers and livelihoods vanish into dust, we, as trained marketers, need to take this opportunity to step-up and play our part.
To get through the immediate lockdown crisis, it’s understandable for firms to shift to survival mode and focus on the short-term by reducing overheads and protecting employees. As part of the cost-cutting exercise, a common response is to cut the marketing budget and shift focus away from long-term brand-building, ready to be reinvested in economically healthier times. In my opinion, this is a mistake.
Once the lockdown ends, a recession will inevitably follow and with it, intense competition. Taking a big picture approach and continuing to maintain salience in our brands will help firms differentiate, generate profits, and essentially, kick-start the economy. Brands are powerful instruments of strategic marketing and through careful nurturing and consistent long-term investment in brand awareness and brand image, they can be a key driving force of increased market share and long-term profitability.
Evidence from previous downturns has consistently proven that companies who continued to invest in their brand during a recession, emerged from it in a significantly better economic shape and recovered quicker than other competing firms. (McGraw-Hill, the IPA and Kantar)
What makes brands so special?
“Products are made in a factory, but brands are created in the mind.” Walter Landor
The value of brands has been well-documented both by academics and practitioners for over 20 years. The common thread to all the brand definitions is that, unlike a product or service, a brand delivers value (or equity) beyond the functional level.
A brand is more than just a product, because it can have dimensions that differentiate it in some way from other products designed to satisfy the same need. These differences may be rational and tangible – related to product performance of the brand – or more symbolic, emotional and intangible – related to what the brand represents.
The benefits to our clients are that our brands reduce perceived risk in buying situations, lower search and transaction costs and create positive images in their mind-sets.
These attributes benefit our firms, in that, unlike financial and physical assets, they are difficult to imitate and so deliver a competitive advantage and facilitate premium pricing. Previous research has shown that brands establish a positive effect market share, customer perceptions of product quality, shareholder value, customer evaluations of brand extensions and resilience to product-harm crisis.
Focusing on Brand Equity
Brand equity is a concept used to indicate the value of a brand and can be perceived as a bank of future profits that stem from previous brand building activities. For brands to increase equity, they must build awareness (to ensure consumers know the brand exists and what it stands for) and create strong, favourable and unique image associations and feelings among target consumers.
In 2009, George Christodoulides defined customer-based brand equity as “a set of perceptions, attitudes, knowledge and behaviours on the part of consumers that results in increased utility and allows a brand to earn greater volume or greater margins than it could without brand name.”
Selecting the relevant associations and marketing tactics depends on what each brand is trying to achieve and will be different from firm to firm. If there has been one benefit gained from ‘lockdown’, it has been the opportunity for us to take a step back, quietly contemplate the big picture and reassess those decisions.
COVID-19 and the subsequent recession will present challenges, but for brands that can continue to trade, there are a few ways to continue to build brand equity, protect and capitalise on its value and deliver growth into the recession ahead.
Help turn the crisis into an opportunity
1 Maintain and / or increase advertising investment
Advertising has a long-term impact. Evidence from past recessions has shown that brands who are willing to capitalise on a marketing opportunity and maintain advertising budget gain ‘Excess Share of Voice ‘(Nielson, IPA Report 2009) and grow higher market share relative to competitors. Therefore, advertising in a recession makes sense – albeit adapting messaging to remain sensitive and relevant. Added to which, not only are ‘lockdown’ audiences currently larger and more pre-disposed to advertising, there are also better media deals to be taken advantage of as other brands are pulling back. If a firm can increase advertising budget during recession, they are likely to generate a better return on investment.
2 Fine-tune your brand and service portfolio
It’s the role of the marketer to ensure a professional services firm has the right services to sell to the right consumers in the right places and times. This is an opportune moment to review our service offerings and brand architecture, such as our targeting, positioning and codes. Optimal support should be given to the service lines which are in-demand and relevant.
3 Deliver a compelling value proposition
It may be tempting to offer price reductions and discounts during a recession – these can, however, have a detrimental effect on brand equity and price integrity. Therefore, communication should be carefully crafted to promote the value our brands offer clients (and their strong, favourable, and unique associations) in relation to competitors.
4 Revisit budget plans
As marketing departments face reduced funding and pressure to justify marketing plans, this is a prime opportunity to reassess our marketing approaches and activities. Budget reallocations can allow imaginative, new ideas to surface and eliminate past approaches that no longer provide ROI.
5 Get closer to your clients
COVID-19 has had a huge impact on our lives and will, no doubt, change what our clients’ need, can afford, where and how they work and shop, and how they want to interact with us. We need to build even deeper, more meaningful relationships with our clients to learn more about what they are experiencing, understand any permanent or temporary shifts in the new reality for our loyal profitable client-base and to ensure our brand and service offerings continue to resonate.
We don’t know what the other side of this crisis will look like, but it’s fair to say we will never be quite the same. Not all businesses will survive these challenging times and those that do may come out the other side profoundly changed. But I do believe that brands matter and can make a meaningful contribution, even in times of human crisis. With good management, brands can emerge stronger and more valuable than ever and it’s our role as marketers to deliver on that promise.
“The coronavirus crisis will test us all, but marketers need to think long-term and keep building their brands, protecting their staff and honouring their values… It might seem superficially mercantile to discuss brands, pricing and customer behaviour as we stare down the barrel of a pandemic. But the practical reality of global economic trade means that we need to market now for the good of all mankind.” Mark Ritson