The strength of emotional value
Apart from traditional company losses, organisations are also willing to take a punch when it comes to brand equity. Investment in their market position and perceived customer value seems the last thing on their minds as one emergency follows another uncertainty. Business leadership in times of crisis is - somewhat understandably - reduced to managing the rational part of things and trying to preserve the status quo. In industries under pressure, the focus on reducing risk of becoming a part of a sad statistic of failing companies prevails and becomes the highest priority. Almost without exception, volatility in the market leads to a decrease in new initiatives, brand supporting efforts, marketing spends and investment in growth.
Paradoxically, organisations investing in their brand during uncertain times not only seem to survive more easily, but they also appear to flourish when their competitors are going under. Strong brands are an essential driver for trust, awareness, conversion and loyalty at the best of times. Logically, they also outperform their competition when the going gets tough. Do you think Nutella sells one less jar of their iconic sandwich spread when the retail price goes up five percent? Does a brand like Nespresso become less attractive to their target audiences in times of war? Do managers at Nike quiver in fear when their purposeful brand is presented with growing political turmoil? Does Ferrari experience trouble marketing their latest supercar model during a recession?
To answer these rhetorical questions: no. Love brands are embedded deeply in the fabric of their respective markets. They carry emotional value for their customers, far surpassing the transactional nature and rational reasoning usually associated with buying a commodity product such as chocolate paste, a cup of coffee or sports apparel. Luxury car brands even reported a rise in sales numbers during earlier crises.
Years of careful strategic positioning, empathic communication and clever customer experiences make strong brands close to recession proof. This foundation enables them to charge a premium for their goods and services, even in times of crisis. It allows them to invest in relationship building with their relevant target audiences, regardless of tougher times. It helps them to grow in market share, while those around them are forced to cut costs.
Three principles to keep at heart
First and foremost: stay empathic. When things are rough for you, they probably are for your customers and employees as well. Don’t hesitate to convey the message of understanding and shared concerns to both internal and external target audiences.
Try to adapt brand communication and experiences based on the shifting needs, dreams, fears and motives of your stakeholders. Invest in building relationships now more than ever. Chances are people are more likely to embrace this relationship as they are looking for footing and grant your brand their trust and loyalty when things stabilise over time.
Secondly: keep communicating. Sure, acting like nothing is going on in the world around you is probably a naive tactic, and the tendency to save money in the marketing department is high. But the average recession lasts no longer than a year.
The short-term benefit of halting marketing and communication efforts never outweigh the damage in the long term. Rekindling the fire between your brand and your target audiences when you deem the coast to be clear again equals a scenario in which you start from a disadvantage compared to your communicative competitors.
Sustainable relationships aren’t built in a few months, but it takes only a few days to extinguish the love and years to re-establish.
Principle number three continues on the first two, and focusses on using a lower demand for products and services to rethink your market position and devise a strategy that allows you to thrive after the crisis.
Take the time to listen to what your customers really want and provide them with an answer that surpasses the rational arguments. Think of ways to adapt your future brand experience to a changing demand and evolving motives for interaction with your brand.
It is a matter of perspective: where one organisation sees a crisis as a source of downscaling, damage control and rash decisions; successful brands see an opportunity to do what no competing brand has the nerve to do.
