When times are tough, perhaps the easiest budget to cut may appear to be our spend on brand and community; however, when we look at the data it’s clear that investment in brand during a crisis is the #1 indicator that the business is going to come back stronger than before.
A couple of weeks ago, as it became clear that we were headed towards a global crisis, we published an article that looked at lessons from the last great recession, and applied them to the current business market. Now here we are, in the middle of it. Lessons can be easy to talk about when they’re abstract ideas, but when the stock market is down 30%, there’s a global travel restriction, and no sign that we’re anywhere near the bottom, the world can look like a much different place.
Our goal with today’s article is to reinforce some of those ideas that we discussed by backing up the idea of investing in brand-building during a downturn with cold, hard facts, and then to suggest some basic principles for publishing that we should all be introducing right now.
First: the facts
While today’s situation is unique, it’s not unprecedented. A study done by PIMS Associates looked at the amount of money spent on advertising during a market downturn and then compared it to the success of those same businesses during the subsequent recovery. The data showed that the brands that maintained their budgets ended up in slightly better positions than they had been before the trouble began, increasing their profits by about 1%. That same data showed that the truly courageous ones — the brands that had increased their ad spend when everyone else was slashing — increased profits by an average of 5% during the recovery period.
The largest quantifiable gains, however, came from market share. Remember, downturns are hard on a lot of businesses and, unfortunately, a lot of companies won’t make it through. While that’s tragic for the people in those organizations, it creates a void in the market where customers are going to left searching for alternatives. Now, of course, we’re always looking to increase share of market, but according to the International Journal of Business & Social Science, during recovery periods the best brands typically pick up gains that are 170% greater than during stable market conditions.
All of those numbers, however encouraging, significantly undervalue the opportunity that businesses have when they can allow themselves to think outside of the limitations of a finite market. A finite market, for example, assumes that for every hotel room night that one property gains, another hotel must lose. The Airbnb team thought differently – they imagined an opportunity that was much broader than the current hotel traveler and they created over $30 Billion in value because they invested in building that brand and community.
Another example of finite market thinking is to look at the e-commerce space in 2009 and assume that, in order to become successful, a business would have to steal share from Amazon, EBay, or the big merchant e-commerce providers. Instead, the Shopify founders looked beyond the market to see millions of entrepreneurs, small business owners, and retailers whose needs weren’t being met by the existing competitors.
There will be a fresh flight of success stories that emerge from the 2020 market downturn, and what they will have in common will be that they invested in their brands and in their communities while everyone else was retreating. What exactly makes up that investment will be unique to each organization, but there are a few principles that we can all put into practice in order to set ourselves up for success.
What you can do right now
- Audit Your Content
The word audit never sounds like fun (and it isn’t), but like going to the dentist, it’s necessary to prevent bigger, more painful issues down the line. To perform your audit you’re going to look 4 weeks backwards and as far forwards as you have planned, and ask yourself the following:
- Is this content (post/tweet/video) respectful of the current conversation?
- Are we adding value for our audience?
- How will this content look in the context of the conversation happening around it?
- Does this content have a call to action that we can deliver on? ie. Is it encouraging people to get outside, book a trip, or attend an event?
If the content you’ve already published doesn’t match those criteria, you may consider archiving it or deleting it altogether. In that case, the choice to remove content would simply be an acknowledgment that the conversation has changed, and what was appropriate at the time may no longer be.
For the content that you have planned, the solution will often be to simply change some copy or select a different image. For larger pieces, like videos that were meant to go out but may not be appropriate now, consider holding onto them for the recovery – they’ll be at least as valuable when everyone’s looking to get back to business, but few brands will have prepared for it.
We have all invested considerable resources to get our brands the awareness, community, and loyalty that we have right now and, like any connection, those relationships must be maintained or else they will fade away. It would be a shame to lose all of the momentum and value that you’ve built up to this point.
In some organizations it will be a challenge to hold onto content and advertising budgets, but every brand should be, at minimum, maintaining the relationships that they have. For most brands that will look like the following:
- Keep up, or step up your email content
- Build additional assets that exist for no other reason but to be valuable to your community
- Post regularly to your social channels that celebrate the reason that your business exists in the first place
- Offer ways that your community can continue to experience your brand/people/services from home
- Reach out directly to your most loyal customers – ask how they’re doing, offer support, or just check in with them. These communications should come from a human, not a logo, and the most senior human that’s available.
The first step for your advertising plan will be to review all of the campaigns that are active or scheduled across all platforms. The last thing you want to be doing is making promises that you can’t fulfill right now.
Instead, what the brands that emerge from this stronger will be doing is re-imagining what those budgets can and should be used for and using them to deliver on your brand promise. It’s easy to be skeptical about concepts like corporate missions and company values when times are good and sales are coming in; however, if those things really are core to what our companies are and why they exist, then this is our opportunity to prove it.
An investment in your community and your brand promise now communicates loudly to the world that when you tell those types of stories, it’s not just because you’re trying to make sales, it’s because you actually believe in what you stand for. Advertising budgets can be used to support local people in need, to offer support, to make people laugh, make them smile, or to help out partner businesses that are affected right now. The fact is that the best investment for your brand will also look very similar to the investment that’s best for your community.
Remember that brand and community is strongest closest to home, so any investment that we make in either needs to start with our people. It’s easy to look back at 2009 and see brands that were outwardly telling stories of support and hope while inwardly demanding unpaid overtime and cutting benefits.
Market downturns create a lot of inconvenient decisions and uncomfortable conversations, but the outcome is not complicated. Either our businesses will survive and thrive, or they won’t. The data and the examples are clear in that they show that the brands that are able to invest in brand and community right now have a significant advantage, but I’ll offer a ray of hope for those of us without the budgets to be spending right now:
Sometimes the greatest investments that we can make in our communities are not financial. I’ve seen web design agencies offer to set up simple e-commerce shops for struggling businesses, and fitness studios create free live classes. B2B companies are offering their expertise in the form of free business consulting sessions, and retail brands are bringing artists together to create collaborative public art.
This is a time for coming together and supporting each other, but it’s also a time when business strategy is most vital, and I encourage you to look for the opportunities where those things overlap with each other, because that’s where the biggest wins will be found.