This may sound familiar to long-time readers of Brandtalk. But this year, 2018, is the time to give serious consideration to investing in a formal brand strategy and maximizing the strength and value of your brand. Yes, I know it sounds self-serving. And, yes, I know I said the same thing about 2017. But hear me out. While the economy is humming along, the time is optimum for making this kind of investment. And, if the economy falters, it may well be too late. Those who strengthened their brands in 2017 are now well-positioned to ride out the next downturn, which, according to the people who time these things, can be expected in the near-to-middle future. And since no such downturn occurred in 2017, there’s still time to take action in 2018. Use these five considerations to guide your decision making.
You need a brand strategy
Every business needs to have some process for making sales. But unfocused sales are ineffectual sales. A marketing effort is also required to identify and educate qualified markets about the company’s products and services and to provide direction for the sales effort.
When buyers receive a marketing message, they instinctually look for a short-cut to identify who is sending it to them. The brand provides that short-cut by presenting visual, and other, cues that buyers read effortlessly, and in a nanosecond. Through the brand strategy, the business can begin to control those perceptions.
The brand strategy manages the instant expression of a company’s values, purpose, mission, positioning, etc. It creates a rational and emotional relationship with the market that reinforces desired perceptual responses. For instance, you’re on the freeway, you see a sign up ahead with the Golden Arches, and your mouth starts to water even before you get to the restaurant and read the menu. That doesn’t happen by accident; that’s been strategized.
Unfortunately, not every brand strategy is as precisely planned as McDonald’s. Many businesses – especially, and sadly, B2B businesses – create them on the fly or just wing it. Even worse, many businesses have no brand strategy at all. They’re missing out, leaving money on the table, as we’ll see below.
The economy fluctuates
Great economists differ on modern economic cycles and the causations of recessions. We’re not going to touch those debates here. It’s enough to know that slumps, or worse, do happen. And, when they happen, business slows down … a lot. Conversely, when the economy is booming, business picks up. Profits increase and the coffers get filled. Here’s an easy
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question: When is the right time to invest in your business? When should you upgrade your computers, retool your factory floor or replace your aging fleet? That’s right – during the boom times. And the same holds true for updating your brand strategy and exerting some control over the way your brand asset is perceived by its market.
Budgets are scarce
Second easy question: Why is a prolonged economic upturn the best time to invest in your brand? Right again! Because it’s much easier to find a budget in good times. They say that when markets get tight, the first thing cut is marketing. That’s only the half of it. Sure, marketing gets cut but branding usually disappears from all consideration whatsoever.
The suffering sales staff is then expected to do more with much less, putting an enormous strain on everyone. And all that pressure ends up being for naught. Because it doesn’t matter how hard the sales staff gets whipped, sales will always slump when branding and marketing are ignored. If the CFO can’t find money to invest in the brand strategy during the good times, it sure won’t be there during the bad.
You’ll gain eight benefits
The economy has been strong for seven or eight years now, so the time is right. But why even bother to invest in a formal brand strategy exploration – at any time? Because, when you do, you gain these eight proven economic advantages:
- Increased sales
- More opportunities for growth
- Decreased costs in marketing and HR
- An empowered workforce
- Devoted customers
- Pricing resiliency
- A higher business valuation
Market leaders in every sector know and enjoy these eight benefits. I’ve covered them in Brandtalk before but, if you want more detailed explanations, download our free white paper here. For the sake of this post, I want to focus just on benefit number 6, above.
Pricing resiliency is invaluable
A strong brand strategy will support your business during a weak economy! It does this by fortifying your pricing in two important ways.
First, strong brands can command premium pricing. When you create a brand relationship with your customers, you’re giving them a reason to choose you that goes beyond pricing. You can buy a smart phone pretty inexpensively these days but a huge segment of the market is willing to pay much more for Apple’s iPhone. More or better features and benefits don’t begin to justify the additional cost. It’s the pull of the Apple brand that makes these devices so desirable – and so profitable. Over the years, Apple has nurtured a brand relationship with its market. So, pricing notwithstanding, people will walk right past other smart phone options to knock on Apple’s door.
Second, if you have no such brand relationship, you are, in effect, selling a commodity. You’re competing on price alone. When buyers’ wallets get thin, many of them start looking for bargains. Businesses with no brands or weak brands have to cut costs just to stay in the game. That’s true of both B2C and B2B offerings.The problem with this tactic is there’s always someone willing to cut even more, forcing the weak brand to go even lower. It becomes a race to the bottom.
Strong brands have a positive, psychological relationship with their customers. Even though they may be unable to explain it, buyers feel compelled to stick with brands they love, even if they cost a little more. This allows the strong brand to weather the economic downturn. Strong brands cut last and they cut least … if they cut at all.
2017 saw many brands establish or renew their brand strategies. They’ll be well-positioned to not just survive the next economic downturn, whenever that may occur, but to thrive in it. There is still an opportunity to join their ranks in 2018. But the window may be closing. Resolve to make this the year you harness the full power of your brand.
Best branding reads – Week of January 22, 2017
P&G, YouTube and Others Respond to Tide Pod Challenge
Every brand manager’s horror story. Your product gets hijacked by a bunch of reckless kids.
Help Get Los Angeles Off Microsoft Paint, the City Begs in Hilarious Help-Wanted Ad
This is one more reason I always sing out loud to “I Love L.A.!”
3 Keys To Driving Long-Term Brand Relationships
Remember. The brand is the relationship. A brand is a promise kept.
Duracell’s CMO on the 7Ps that are redefining the brand
Interesting case study on how the Duracell brand defines itself and adapts to new ownership.
The Starbucks Logo Has A Secret You’ve Never Noticed
A really interesting look at all the decisions that go into a successful graphic design.
Can a Water Called Liquid Death Beat the Energy Drinks at Their Own Game?
This is hilarious. I love it. I hope it’s enormously successful.
The Power Of Intimate Brands
One person talks Admired Brands. Another talks Intimate Brands. I talk Beloved Brands. Careful, brand strategists, we’re starting to confuse people again. Still, a good article.