We’re at the start of a global recession, with staggering inflation rates. As revenues decrease and costs increase, this could lead to tough decisions for you to make about business finances to cut costs and reduce losses.
Often many will start to cut spending on marketing campaigns and branding efforts. However, investing in branding is especially pertinent during times of business crisis, even though it may seem counterintuitive.
Still unsure what branding is? You may want to learn more about what successful branding can do for your business.
There are different forms of business crises, and they can be categorized into external and internal crises. No matter the crisis, effective branding can help your business survive through various uncertainties.
External: Economic Crisis
Recessions happen periodically, and they can have a large impact on your profits. As customers cut back spending due to economic uncertainty, revenue drops. Accompanied by inflation, you also have to manage rising costs of rental, utilities and even manpower.
The Harvard Business Review found that progressive companies that approach recessions with an optimal balance of defence and offense strategies significantly outperformed their rivals by 10% or more on top and bottom-line growth after a recession.
Good branding helps your company to remain relevant and top of mind. Even through a recession, customers who remember and identify with your brand have a higher chance of staying loyal.
This could help to mitigate the effects of the economic crisis. Customers eventually adapt to periods of recession and will spend on goods and services that they find meaningful or essential.
That’s why investing in effective branding strategies can help your business stand out from the rest when everyone is keeping low, hence emerge stronger after an economic crisis. Lets look a bit more at the real issue of a competitive landscape.
External: New strong competitive landscape/competitor
A new strong competitor in the market could shake things up and tempt your customers to take their business elsewhere.
For example, an established printing company offering traditional printing services the past few years could be threatened by newer companies using updated, sophisticated technology, or one that offers a wider range of printing services.
They could have more capital or cash flow to invest in human resources, the latest technologies and systems, or a strong marketing angle that successfully convinces customers to purchase their products and services.
This is where branding is of utmost importance.
Effective branding establishes your footing and business in the industry, market and helps to showcase and differentiate your offerings from your direct and indirect competitors. It helps your target audience to perceive and form your brand image in a way you desire and with time, even build an emotional connection and trust in it.
A market research study found that customers who feel an emotional connection to a brand have a 306% higher lifetime value. Creating a strong, loyal customer base helps to re-establish your position in the market even in the face of looming competition.
Internal: Changes in staff
Organizational changes are sometimes a necessary evil to optimize operational efficiency. Along with individual changes in personnel, it can leave both old and new workers confused and directionless.
This can affect day-to-day operations, especially if there is no clear common goal to work towards.
Having a strong brand identity and company vision helps to align different departments and teams in the company. It provides a clear outline of the company’s vision and values, so workers are clear of the bigger picture that they are working toward.
It can guide newer workers or team members in their onboarding process and reassures existing workers of the company’s brand values as well as the direction in which it’s working towards in the long run.
Internal: Irrelevancy, becoming dated
Another form of internal business crisis is the threat of your products or services becoming irrelevant or dated.
In such a dynamic world, it’s difficult to stay afloat with the rise and fall of trends and the newest developing technology. Social media trends and fads come and go. Your product or service could be in demand for a moment and deemed backward in the next.
In a fast-paced world, it is important to keep up and maintain an awareness of the changing landscape, especially the online landscape. As branding advisors, we do not create according to what’s trending. We think long-term, and provide tangible and workable solutions that keep a brand ahead of the curve.
A branding strategy takes approximately 2 to 4 months to develop. It’s a framework that determines how you present your business to customers and differentiate yourself from competitors.
There are 4 key stages in an effective branding project:
- Understand your current business, the challenges, threats, and opportunities. Refine buyer personas and find out more about the competitive landscape.
- Use different strategies and analysis to determine the USPs (Unique Selling Points) of the brand, brand positioning, and market strategy.
- Build a brand personality and explore the brand archetype.
- Build a visual identity that aligns with your brand strategy. This will result in a strong brand guideline for the company and staff to use in their communication collateral that adheres to the new brand direction.
Establishing a strong brand foundation and conducting enough research to understand your competitive environment is an essential first step in building a strong brand identity. It helps to inform your next steps and how you can set yourself apart from rivals.
Next, we can start to build a brand strategy. This includes several components, like defining your brand’s mission, vision, and brand values, and determining your brand positioning. It’s also important to create strong USPs to make your products and services stand out.
We can next focus on developing a consistent brand voice, which determines the language and tone you use to communicate your brand mission, values, and personality.
Your brand’s voice depends on how you want your brand to be perceived and what you want it to be known for. This helps you to build relationships with customers.
Finally, the brand identity is a designed sensory representation of all the previous components, it should represent the brand’s mission, vision, and values, work in tandem with your brand’s voice, and also elicit the desired response from customers.
Brand identity can be conveyed in your brand logo, tagline, packaging, product design, music, image choice on marketing material, the smell of store locations, and more.
At the end of each branding project, you would have a set of brand guidelines – an important tool that contains explicit instructions and standards that determines how you present your brand to others.
Having clear guidelines helps to ensure consistency in your communications and establishes a strong, clear brand identity, allowing your brand to stand out.
Benefits of Branding during a Crisis
No matter the type of crisis, investing in a good branding strategy will tide you through and help you stand out. You will also come out of a crisis stronger and more motivated, with a clear vision and plan for your company and brand.