Most people remember the pain of losing money on the stock market more than they remember the pleasure of making money in a rising market. So what will the world financial crisis and potential for recession mean for your business - and your brand in particular?
Here are some strategies to build your brand in turbulent times:
- Communicate more frequently
With so much change happening so quickly, it is essential to communicate more frequently with your stakeholders.
If these are customers, they want to know you will be a reliable supplier. If they are investors, they will want to know your company's future strategies. Communicate critical business information to investors on a real-time basis. If they are staff, they will want to know if their job is safe.
Timely, accurate and frequent communication is essential in the current economic climate. Proactive, honest communications can help build credibility in a rapidly changing marketplace.
- Be conservative with messages on stakeholder expectations
In terms of messages and managing stakeholder expectations, be conservative. This could be internal or external sales, revenue or profit forecasts or delivering on customer service.
We are going to see the rise of the financially stressed stakeholder. They will be angry, demanding and under enormous pressure. Do not over promise and under deliver in this market or your reputation or brand will be damaged.
In everything you do, from preparing budgets to looking at growth strategies, be conservative. No one will lose a customer for being conservative and meeting expectations.
- Long-term focus
Now is the time to focus on the long-term aspects of your brand. Expect a major shakeout - mergers, acquisitions and companies going under. Make sure you are prepared for the long-term.
- Stick to fundamentals
Look at your core products and services and the fundamentals of what you are good at. Re-focus and stick to these. Consistent, well thought out messages delivered with clarity are essential around your core brand.
- Positioning, positioning, positioning
You need to be really clear on your position in the marketplace. I agree with many other commentators that in a downturn, the top and the bottom ends of the market will grow.
There will always be global demand for high-end products and services with a good brand and reputation for those with money.
The low-end market will also grow as the discretionary spend of consumers is reduced. I believe the market that will suffer most is the middle market.
Spend a lot of time analysing where you are in the market. Either move up or down - but don't stay in the middle.
If you plan to move from middle to high, look at your pricing strategies in particular and, rather than discount, look at how you can add more value to what you already offer to command a premium.
- Market to existing customers rather than seeking new ones
As growth contracts, focus on marketing to your existing database where you already have existing relationships. Investigate ways to offer additional value or more customised or tailored solutions to your existing customers.
- Online will explode
As the market contracts, more consumers will move online with their purchasing behaviour. We will see the rise of more virtual businesses.
Physical displays, shop fronts, excessive and expensive offices will all go as businesses refocus and re-value their softer assets; such as brand, people, customer relationships and intellectual property.
The cost of having capital tied up in hard assets will be a burden and we will see many companies instead reduce costs in this area and spend more on building a strong online brand.
Have a strong online strategy and presence and invest in this area so you can harvest later.
- Use public relations more in your marketing mix
As consumers become more stressed, cynical and sceptical, traditional marketing such as advertising will become less effective.
Beef up your public relations activities to increase credibility, visibility and word of mouth. This could range from increasing public speaking efforts to holding more events or gaining more editorial.
- The rise of necessity entrepreneurs
In a growing economy we see people start their own businesses because of opportunity. We are now likely to see necessity entrepreneurs. These are people who are forced to start their own business because of necessity, such as being made redundant.
This will change the shape of small business forever. They will be hungrier, tighter with their money and more driven.
Watch out for them, because they are going to pop up like mushrooms and have the potential to turn into your biggest competitor!
Prepare for increased competition in niche service areas where start-up costs are less than manufacturing.
- Invest in professional development and external advice
We are going to see some fundamental shifts. There will be both threats and opportunities. The best way to prepare for these changes is to seek external advice and invest in your greatest asset - yourself.