The world of business is entering an era of transformation due to the COVID-19 pandemic. While some may still deny its existence, recession – or, at the very least, a dip in the economy – isn’t far behind this fast-spreading virus. It’s about time you, as a businessman, understand the significant risks, as well as the opportunities that these turbulent times present.
Economic prosperity makes it easy to feel secure in the world business. Markets continue to surge, causing people to forget that inflation ever occurred. After all, why would you worry if nothing’s wrong?
However, this false sense of security is what will leave you unprepared for the turn of the wheel. Remember that economies are cyclical by nature: sometimes you’re up, other times you’re down.
With the pandemic spread all across the globe, the next recession is just around the corner. Do you think your brand is ready to take it head-on?
While it is indeed unprecedented, the change COVID-19 is ushering in the business world is not insurmountable. In fact, leading branding agencies in the Middle East are eyeing these five strategies that have high potential to make brands recession-proof, as listed below:
5 Proven Strategies to Try
1. Continue Marketing
Many business owners reduce their marketing budget the moment they realize that recession is inevitable. They assume that marketing is one of the expendables in business and that they are protecting their company by slashing their marketing budget.
But this first instinct is not only short-sighted, it can also end up harming your bottom line in the long run.
In fact, a 2008 study from Les Binet and Peter Field on the effectiveness of marketing revealed that while reducing your marketing budget does help protect short-term profits, it can leave brands weaker. Brands that weren’t continuously marketed during the recession were found to be less profitable after the recession ended.
They also discovered that brands who did the opposite and doubled their marketing efforts tended to gain a bigger share of the market. This made them more profitable in the long term and their businesses more sustainable during and beyond the period of recession.
2. Innovate Constantly
“Necessity is the mother of invention.” Heed this adage and continue innovating, especially when the times are changing.
Innovation has proven to be an effective way of keeping businesses afloat and thriving in what could be a time of recession. In fact, many companies have already started realigning brand strategies and business models with what could be the new “normal” after the pandemic has passed.
Take advantage of new technologies to improve processes and customer experiences. A simple change in how customers can access your products could mean not only the survival of your business but also its success.
For example, live streaming can be used for product launch events while still following physical distancing protocols to avoid the spread of the novel coronavirus. You can also use virtual reality to let potential customers “sample” services or conduct product promotional events like fashion shows.
Of course, developing an online store is also useful not only for retail but also for many other sectors, especially food service. One excellent example of this is an online fine dining food delivery service in Dubai.
Elsewhere, the use of digital platforms has greatly enhanced consumer experience while accommodating the new “normal.” One grocer in New York gave their customers an option to skip long queues at the checkout while practicing social distancing with the help of a smartphone app. Others teamed up with third-party delivery service providers to help bring their products straight to their customers’ doorstep.
3. Win More Customers
With the spread of the virus comes the spread of fear in the market. This means that you have to take advantage of the opportunity to win more customers by drawing them from the competition using clever-yet-ethical brand messaging.
Make your business available online and offer something different from what your competitors have. Research what they do offer and provide something even better. You can also use this strategy to determine a more effective marketing strategy for your products and or services.
Visit competing establishments and survey consumers about what they like and don’t like about their products and services. Verify your findings by comparing these with online insights on consumer behavior. Then tweak your offerings and business practices to accommodate what the consumers want and need.
For example, during the COVID-19 crisis, more people are buying local because of the fear of spreading the virus through products that come from virus-stricken countries. E-commerce has also become even more popular as people are restricted within the comforts of their homes, and malls are temporarily shut down. Plus, more people have become conscious about their health and opted for more sustainable options, like growing their own food.
4. Reassess Your Brand Positioning
A looming recession is the best time to reassess your brand position in the market to ensure that your brand can overcome the challenges ahead. Remember that an economic downturn can cause changes in consumer behavior and can force people to reassess how they spend their money.
First, conduct a brand audit to determine where your brand stands in the competitive landscape. Knowing your competition’s position can also help you differentiate your brand and determine opportunities that can make you the consumers’ preferred choice.
If you understand your target audience’s behavioral shifts and how it will affect your industry, you should be able to adjust your brand positioning accordingly.
It is worth noting, though, that consumer behavior and preferences may not be quite obvious at first. Take the Great Recession, for instance. Although it may seem counterintuitive, luxuries like localism, personalization, and wellness thrived beyond this difficult time. This is because luxury brands repositioned themselves in a way that consumers will see personal comforts as an investment in the face of budget sacrifices.
5. Look at the Long Term and Don’t Panic
Uncertainty can leave one panicked and unable to make smart decisions. But while this is a normal response, you must resist the urge to apply short-term solutions and look for ways to protect your brand against the looming recession.
Smart brands don’t make short-sighted decisions like cutting the marketing budget. Instead, they rely on data to come up with a tactical response to the crisis and decisions that can balance the company’s short- and long-term goals.
Continue monitoring consumer behavior and use data science to help your analyses and make them useful for the company. Use this information to your advantage and adapt to the new norm. In the face of a significant disruption, it is always safest to stick to the facts.
The Bottom Line
Recession can be a frightful time for businesses, but you mustn’t let fear get in the way of your success. Consider the strategies mentioned in this article to make sure that your brand thrives during the recession and beyond.
Author Bio: Hasan Fadlallah is a Serial Entrepreneur – Founder & CEO of Brand Lounge, the region’s leading and award-winning branding consultancy