Lessons to ride out the downturn

In the largest global downturn since the 1920s, and the largest in the GCC to date, many companies wish it was easy to predict where the world and their business is headed in the next few years. Everyday we hear more news about companies that are suffering greatly from the crisis and the paths they have chosen to take which are often more reactive than strategic.

A question many companies want an answer to is: what can they do to grow through these dark days and emerge stronger, fitter and leaner?

When the current economic crisis is over what can businesses do to ensure that they have taken significant competitive share, increased profitability, revenue and employed the best people in the industry at a lower cost?

What can they do to reiterate the Middle East's place on the global stage at this critical point in history? We strongly believe that writing and thinking about today is old news.

Before the "credit crunch" many companies enjoyed un-precedented growth, often without knowing which investments, strategies and communications were working, and which weren't, so they were loathed to change anything.

As the old saying goes; "if it ain't broke, don't fix it". This was not the right path to take, but it took a crisis for many to realise they need to evolve how they invest to grow their business.

The solution to the current crisis is not necessarily to just cut spending – this holds the danger of throwing the good out with the bad. Firms should prioritise what they want to do and achieve higher return on investment on what is spent. Of course, companies are required to spend less, but indiscriminate cutting is not the path to growth.

So how do businesses and brands benefit from the current situation? How do they capitalise when competitors are weakest?

How do companies become stronger, more efficient and more robust as a business and a brand?

Based on experience of past economic downturns, a strategic and creative business building skill set, we have developed five lessons to help businesses survive, and prosper from the current situation have been developed. 

- Set long-term goal and work out how to get there

Brand owners should order a short and sharp but cost-effective revision of their corporate business and brand strategy which helps answer the questions; Who are we? Where are we going? How are we going to get there? How should we act? What should we say?

In times of crisis, a clear vision founded in facts and a trusted external consultancy's viewpoint can help brands immeasurably.

- Decide which consumers really generate money for the business

Secondly, businesses need to identify which customers are really making them money – not just revenue, but also profit.

They need to focus on not just retaining them, but getting more of them. This is no easy task and requires investment in time and money, but this does not have to be a long and expensive process.

However, being able to measure the difference between a consumer that doesn't generate any income and one whom generates thousands of dollars, multiplied by the hundreds of thousands of customers, makes a massive difference to a company's revenue. Especially when liquidity is key. This may also require a shift in emphasis from where your business has been in the past, and having a clear goal, as explained above, is crucial. 

- Knowing which investments work and which ones do not is even more important during tough times

With a unified sense of purpose businesses should measure what they do by implementing a brand and business tracker that will measure and evaluate their marketing, brand and communications investments.

This will be able to measure how the company is perceived by high-value customers (as already identified in lesson two) and the staff; the two important audiences needed to generate income. A tracker can also tell you which touch point are driving awareness and conversion.

There is no reason not to make every dollar count, to measure how every piece of marketing or communications impacts the brand and the bottom line.

Businesses should be able to know which ads work and which communication channels converted to sales most effectively. This will enable them to push their partners to work harder and smarter on their behalf. There is also an opportunity to make the most of cost effective, flexible and responsive media such as digital by creating an online cross tabulation tool so that all the staff can create up to date tailored reports based on the tracking data to input into business and brand decisions. 

- Even negative decisions should be handled in a manner that is in keeping with the brand

Unfortunately, many companies have had to reduce their workforce. A focussed aim and objective for the brand will help them identify who is required according to the new revised strategy. But what is crucially important is not to let this regrettable situation spread and infect the vision of the business. 

- Make sure your brand delivery matches your promise to maximise returns

In tough times consumers require trust from brands more than ever. When a brand moves away from the public eye and changes how it acts in tough times, people are less likely to trust it.

Consumers, stakeholders and all audiences around the brand want to know that the brand will still be there for them in tough times. During a downturn a brand that sticks by what it promises will not only emerge stronger but will maintain customers.


- Duncan James, Director of Strategy, The Brand Union - Middle East. The views axpressed here are his own

 

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