As recession and other economic crises loom over every country, it adds another layer of concern to brands around the world. Along with supply chain bottlenecks, currency devaluation, and other business restrictions, brands have to think about keeping their consumers while they cut down on many costs. A recession is a difficult time that can be turned into a productive one with proper strategies. From the previous recession in 2008, we find some interesting insights into brand building and consumer preference. According to a Harvard Business Review from 2009 called How to Market in a Downturn, building and maintaining strong brands that customers trust is the best way to flourish through a recession. In the last global economic crisis, Johnson & Johnson and Colgate-Palmolive remained strong with their stellar branding. Therefore, instead of cutting down costs and offering short-term advantages, companies should take this opportunity to refurbish their purpose to offer better branding and bonding with customers.
Refining the Why
Every brand starts with its core values, mission, and purposes. However, along the way, purposes can change based on their impactfulness, brand image, and customers’ insight. While the economic crisis slows down trade, positive outlooks can help businesses remain stable through it all. Reframing the brand’s purpose during the slowdown can help brands turn this boon into a blessing. We can look at the reasons for this from multiple angles. When an economic crisis hits, customers can be divided into various types depending on their purchasing power and consumption level. But most of them will try to switch companies to save up or decrease costs. This is an opportunity where brands can invest in preventing them from switching. Investing in rebuilding brands will also minimise risk and maximise growth.
A crisis also shifts the mindset of consumers, especially in this century people are striving to be more compassionate and considerate towards various issues. If your brand didn’t have a purpose that directly helped any cause, this could be the time to look into it. It will also influence the consumer to invest and contribute towards it. If consumers see good intentions and transparency in the process, they will be encouraged to stick to the same brand. It creates a common ground between a brand of choice and the consumer to contribute to the same cause.
While refining or defining their purposes, brands should follow a few guidelines and strategies. Previous periods of recessions give us interesting data and insights based on which companies can make informed decisions to redefine their core values and build a better brand.
Values Matter
If COVID has taught us anything, people should be more empathetic and attentive to social and environmental issues around them. Even though people’s purchasing patterns and preferences have changed during this time, it is evident that they still care about health, the environment, and society. A Mckinsey study that portrays consumers’ feelings and shopping patterns stated that especially the younger generations (millennials and gen z) said that their choices are influenced by environmental, social, and governance factors. More than two third of younger consumers said that their preferences have been influenced by at least one of the ESG issues. To keep up with more aware customers, companies should focus on addressing social agendas through their branding. It is no longer profitable to only offer discounts to keep consumers loyal.
Accountable to Commitments
To keep committed consumers in the long run, companies should fulfil the commitments they make. They should prioritise their purposes as well as evolve them. Chipotle can be an example of how brands should prioritise their purposes. Chipotle has always lived up to its “Food with Integrity” tagline through a 91% recycling rate, gender-racial pay equity, and buying millions of materials from local markets. Their commitment to purposes was proved during the lockdown. When most brands were struggling with keeping their values, chipotle stuck to it. They achieved a 51% waste diversion rate, purchased organic ingredients, and donated millions to young farmers. On top of that, they set new goals to maintain sustainability and reduce waste. In return for their consistent commitment, chipotle gained long-term trust and enduring loyalty from their customers. Other brands should also value loyal consumers, in fact, more than new consumers, as stated in a Harvard business review from 2015. The review explains that customers who are fully connected and engaged with a brand are 52% more valuable than those who are not. Older consumers also bring more revenue than newer ones.
Apart from garnering trust from their consumers, they should also try to protect the purposes with adequate growth. It boils down to keeping a balance between growth and values. Brands should focus on impactful strategies and advertising to promote the values they adhere to. In that way, they can target newer customers who are looking for a better alternative. Companies should actively take this recession as an opportunity to build these impactful short-term strategies to return with a high growth and stronger reputation.
Embrace the Vulnerability
From 2020, the entire world is facing unprecedented loss. Consumers already know that companies are facing a difficult time. So, it would be wiser to share a grounded perspective while embracing vulnerability. Instead of sharing only numbers and offers, businesses should try to build an emotional connection. It would bridge the gap between companies and customers who are sceptical of businesses’ purposes. Companies that are staying strong but also sharing the challenges they are facing are expected to get long-term loyalty from their customers.
Combining creativity and innovation
Video conferencing platform Zoom saw a huge spike of 200 million in their daily user number. And this isn’t the first time that innovation and creativity saw a boom during an economic crisis. In 2008 brands like WhatsApp, Uber, and Venmo were created when there was a need to involve technology in our daily lives. As we gradually turn towards AI, technology seems to be the best tool for higher productivity. Brands that can use this as a tool will be able to bounce back harder after the recession with more competition and productivity. Technology can improve brands’ efficiency as well as create stronger customer relationships. Through AI, app, and software development, companies can customise customer profiles and better understand their needs. While technology has been massively used for reaching new consumers, it can also nurture the old ones and prevent them from switching brands. Personalised data on customers’ needs helps brands understand whether their purposes are impactful.
Global crisis, whether it’s a pandemic or an economic turmoil, is a reset button that lets brands refresh themselves, their purposes, and their image. Instead of cutting costs in sharing their stories or building the brand, taking a strategic approach will increase their growth even during the time of a recession. It takes tools, mechanisms, wit, and good intentions to stay strong through the storm. Brands should be more confident and transparent in sharing and connecting with consumers. There will still be consumers who can’t afford to stay, but once the economy rebounds, a stronger brand image will make consumers revisit. Any crisis will hit every business and brand; it matters who cares about their consumers in the long run. Core values shouldn’t just be a part of their website but should encourage them to move forward to create a better tomorrow.
Author-Afrina Asad
