Recession: It’s time to invest in Strategic Brand Communications
Nigeria’s economy slid into recession after negative growth in the first two quarters of the year 2016. The National Bureau of Statistics (NBS) puts the blame for the sudden slump of Africa’s largest economy on low oil prices, which has significantly slashed government revenues and led to the weakening of the national currency with inflation rising to an 11-year high.
After the NBS released the 2016 Quarter 2 GDP figures, average Nigerians went into panic mode. It became clear that the “R” word, “Recession” has come to stay, at least for a while.
The implications of a full blown recession on all of us in Nigeria is dire no one is exempt — governments, large corporations and Micro, Small and Medium Enterprises (MSMEs). There is the need to take corrective actions and focus on strategies for recovery as a matter expediency.
We all have a role to play. Sadly, either as a result of ignorance or deliberate mischief, some media platforms and commentators are limiting their focus on telling the public how bad things are. Some are even predicting how far we will fall, and blaming the present government or past administration for all the mistakes they made. In my opinion, this shouldn’t be so! The focus should rather be on communicating the good news of various ways we can RECOVER.
This is an opportunity for experts to help communicate ways to help refocus and reprioritise the nation’s efforts at preventing slipping further into worst situations and getting out of it.
Call it what you will: — economic slowdown, recession, or even depression. The truth is that a bad economy hurts everyone just like a badly managed nation does. Recession is not “just a WORD”, it is a SITUATION.
So, how can corporate organisations and brands survive hard times like this and remain leaders in their space. Interestingly, the biggest lesson of RECESSION or hard times is that companies get hurt for inefficiencies that they laughed off in better times.
If we take a deeper review of what recession is, we will see that it generally means fat-trimming for companies and brands, from which they should emerge stronger, and that’s good news for investors. One of the most important, but often neglected aspects of a recession is the insecurity of consumers. They feel the pinch; they begin to search for alternatives.
Consumers become value-oriented, distributors are concerned about cash, and employees worry about their jobs. In this light, it is important to stress the need for BRANDS to focus on actions that take advantage of the opportunities that the economic reality (change) brings.
There are tremendous lessons to be learnt from countries that have been through recession in recent past, and history has shown that not everyone automatically loses out in an adverse economy. Examples are there for all, from the US to UAE, Greece etc; companies who invested in their brands during hard economic times retained their core target audience, attracted new consumers, and emerged stronger in the end.
In a poor economic climate, consumer retention and attraction is the name of the game. The need to continuously invest in strategic communication and brand-building efforts to win market share, not just mindshare or margin cannot be over-emphasised.
When BRANDS fail to see their consumers as an appreciating asset, even in hard times, they may soon find their brands and business devalued or defunct. The “evolve or die” mantra becomes words to live by now.
The effect of recession on a brand is brought on by many factors, but it is fed by consumers’ fears mostly. People spend less overall and become far more selective about where they spend the little money they have. This tends to expose and amplify brand weaknesses. As consumers are far less forgiving and far more price-conscious, they abandon brands that fail to provide clear, meaningful and relevant value. Spending habits change dramatically –people take inventory of their costs and the related benefits. If the value is not readily apparent, they could move on to a “safer” and “cheaper” option.
This brings us to the BIG issue; “branding/strategic communication” cannot be reserved as an exercise in times of growth. For effectiveness, there is need for constant maintenance, perhaps even more so in times of crisis. Brands are built over decades and generations. Thinking long term makes your competition chase you.
Invest in Your Brand
Abandoning or neglecting your brand as market tightens, only makes matters worse. Historically, companies who properly support their brands with cost-effective measures can retain and even gain market share in the face of lower-priced alternatives. These same companies will be best positioned to enjoy the fruits of their labour when the economy inevitably returns to growth.
The usual thinking is that in times of recession, it is better to tighten the belt and cut marketing and communication expenditures. However, when companies cut their outreach, they also begin to cut the ties that bind consumers to their brands.
Cut Costs Not Corners
While Nigeria may be heading in the direction of difficult economic condition, it is important to stress that investing and spending are not one and the same. A company can make a significant investment with minimal spend. There are many ways to do this and achieve great impact:
- In a recession, more effective employees can make the difference between success and failure. Implementing an internal communication programme that encourages employees to “live the brand” brings a company together by providing clarity.
- Instead of spending on typical sales promotion, spend on engagement. Exploring and exploiting different sensory inputs can lead to innovative brand signals that are less costly to implement than traditional advertising. Look for the low hanging fruit.
- Leverage relationships and explore co-branding initiatives. Companies are cutting costs at every turn.
- Cement a value-based position with consumers, not a position of low price. If you can find a way to reduce costs–while maintaining quality–and you can permanently pass that price reduction on to the consumer, your brand equity will grow now and after the economy eventually rights itself.
- Making Life Easier: Customers want cheaper products, so companies should strip down their offerings accordingly, break the bulk. Make consumer product easy to buy.
- Spending Surgically on Big Data: The need to bring Innovation to Cost-Cutting cannot be over-emphasised. A lot of brands communicate in the dark these days whereas, this is the time to rely on BIG DATA, Scientific Target Marketing and Geo-Analytics marketing.
It is common knowledge that when the market goes south, the companies who maintain a strategic perspective and invest in their brand communications will rebound from a recession stronger.
The only answer to a recession is a proactive response. Investing in strategic communication activities that will help to retain your audience and attract a new audience by stealing share from weaker brands. Only the best positioned players will survive and thrive.
When consumers trust your brand, they don’t contemplate their purchase decisions — they buy. STRATEGIC COMMUNICATION builds brand TRUST and Loyalty.
Moruff Adenekan is a Strategic Marketing Communications consultant with C&F Porter Novelli, Lagos.