6 tenets of 21st Century branding for brands to survive the downturn.
With the global economy’s continual reduction of growth estimates and increasing predictions for a double dip recession, more companies and consumers are not surprisingly becoming distinctly risk averse. Media pundits and headline writers continue exacerbate this.
This results in a further reduction of confidence and an increased inertia by many companies to save their cash, reduce costs and continue to delay hires that were identified and approved before the summer. Worse, more people are being laid off and a generation of youth face an incredibly tough start in their adult life.
The US is deflecting its economic issues with the Presidential hoopla and even from the UK, we saw how it really hyped up the post Thanksgiving sales day of “Black Friday” – early reports suggest a success but mainly for the bigger safer stores (like Costco & Wal-Mart) rather than those already weaker chains where bigger discounts may not have been offset by enough sales. It leaves us all wondering what their longer term plan to ignite growth is.
The UK still watches the Eurozone nervously and George Osborne, the UK Government’s Finance Chief announces his Autumn report with an expectation to say Plan A remains (A = Austerity) & no Plan B exists. He’ll announce that macroeconomic growth with be stimulated by the twin forces of “Credit Easing” for small business loans and “Infrastructure Investment” programme (paid for by allowing UK pension funds to invest as well as further cuts in benefits), which are geared to encourage new jobs as a prime outcome.
If jobs are created, great, but this will be a slow injection of positivity. Those consumers with jobs (still the majority remember) will need to drive the economy by continuing to spend, invest and survive. This is what will get us all through this downturn. It always has.
Brands are as important as any factor in helping this growth – however slow.
The stakeholders of 21st Century branding need to recognise this. Brands remain about having a meaningful relationship with their customers. Meaningful as determined as much by the customers than the companies. Meaningful as determined by value for different customers and their communities rather a set of values (= cold words to put on a website or on the walls of Head Office).
There are 6 interconnected tenets for brands to consider – even in these difficult times
Choice: Consumers and customers have and need choice – whether to spend more or less, now or later, this brand or that brand, that service or a new service. Keep the choice relevant and not static. But they will choose, even if it is between paying for a utility rather than a new sofa. Share of wallet not share of voice or share of category.
Preference – A choice is influenced by factors of loyalty, price, current & past experiences, relevance to the person, whether the customer feels they are understood rather than taken for granted.
Usefulness – The 21st Century Brands that will succeed will be those that are most useful – that understand their role in customer’s lives and constantly demonstrate it. They are flexible, relevant, fresh, consistent, upbeat, honest – however the customer describes useful – and there will be many different descriptions for the same brand.
Sharing – brands that give back will succeed. Give back to all their stakeholders rather than simply their shareholders. Indeed, those brands that represent firms that continue to chase profit at all costs will fail. Giving back, in various degrees, to their staff, their consumers, their customers and suppliers, their communities and the world. While the short term economic conditions will affect the scrutiny of this balance, ignoring it will have dire impact on the brand’s ability to survive a return to growth. Conscious commerce is a business model that works and will be a prime economic driver for the years and generations to come.
Dialogue – the only way to understand these dynamics is to have a constant dialogue with customers. That means listening rather than talking at or broadcasting to them. Today’s brand research revolves not around a launch or a crisis but through regular (weekly), expansive, free form dialogue with hundreds and thousands of customers – not a few small irregular focus groups or tick box awareness studies. This is more possible via the online communities and social research skills today than ever before.
Open – Throughout the 5 tenets described here, there is a need to be open with your staff, your customers and your communities. Open means honest, regular and relevant. Act on and admit errors and address complaints quickly. Celebrate positive news. Trust is so much easier to lose than to gain (and significantly more so than to regain!)
I wrote earlier on the dangers of Inertia for brands. Actions can be small and meaningful if brands intend to learn from them. As we look to 2012, there will be brands that succeed. These brands will fuel the growth we need to keep ahead of the downturn as well as driving us out of it.
This is not an exhaustive list. What would you add? Leave a comment or forward to others to do so, please?