3 Reasons to Invest in Your Brand During a Crisis
Take a long look at that chart. It is painful to see these data, published by the OECD in early June. During 2020, the Eurozone economy is forecasted to shrink 9.3%, or 11.7% in the event of second Covid outbreaks. At the time of writing this article, second outbreaks in Asian countries (the first affected) are becoming more frequent. To make things worse, if you live in Spain, France, or the United Kingdom, your country is in for the worst of the crisis.
What should we do with our brands then? Should we reduce our marketing budget? Most seem to be doing exactly that. Was it expected? Yes. Is it a good strategy? Dozens of academic studies say no. In an article published in April, Pattison shows data from several of these studies and argues that in times of crisis, good marketers would never reduce their investment in their brands.
At Little Buddha we agree: This is the time for your brand to elevate. The Covid crisis is a unique opportunity and, in this article, we will give you 3 reasons why.
Fewer voices means more impact
Concerned about short-term returns, in times of crises many companies reduce their investment in marketing. If your business is on the verge of bankruptcy, this makes perfect sense: There is no mid-term or long-term return if next month you are forced to shut down. However, as you reduce your spending, you will witness how the competition that did manage to sustain—or even increase—their investment gradually rises above you.
The reason is that when businesses stop investing in their brands, there is a “noise reduction”. The public is bombarded by dozens of ads every day, but the brain can only process so many. When the number of brands circulating on the streets and in the media decreases, people’s attention is no longer split and thus is much more receptive. As a result, the few surviving brands gain a privileged place in the mind of the audience.
A crisis is a time of re-evaluation
It is difficult to overstate the importance of this. Many of us experienced it firsthand during the pandemic: We re-thought many of our habits, started new routines, abandoned others… This is always the case during a crisis: A change in external circumstances forces us to make changes in our lives and, as a result, our purchasing decisions are strongly altered.
The brands that understand their audience and rise to the occasion during these special times are the ones that emerge at the top once things go back to “normal”. There is no doubt that Zoom is one of these brands. The crisis caused a change in our habits: We made more video calls, started taking online classes, watching online seminars… Why didn’t we do it with Skype or Hangouts? Why was it not Discord or Whereby that emerged as king? Simply because Zoom did not hesitate to aggressively communicate its product through a brand strategy that demonstrated a clear understanding of its audience.
Most businesses will not see the benefits of increasing investment in their brands as quickly as Zoom or some home exercise equipment companies did. Remember this though: No matter what your industry is, in times of crisis people reevaluate their habits, making potential gains—and losses—higher than ever.
A great opportunity to increase your Share of Voice
This point is related to the first, but instead of focusing on the consumer (the demand), it analyzes the competition (the supply). The Share of Voice (SoV) is like the Share of Market (SoM), except that instead of measuring what portion you have of the total sales of the sector, it measures what portion you have of the total advertisement of the sector. As Pattison explains, crises cause a decrease in the total advertisement in your sector. This means that just by maintaining your investment, you will get a higher SoV. To illustrate this, we can make use of “Game Theory”, a subfield of economics that analyzes rational decision-making.
For those who know it, this table resembles the famous “prisoner’s dilemma”. In summary, it indicates that if the competition lowers its investment (left column), our optimal strategy is to invest as much or more than before (green quadrant). This will lead to an increase in your SoV which, if joined by a strong and relevant brand strategy, will translate into an increase in SoM.
During crises markets shrink. Depending on your industry, it is possible that even if you increase your SoM, your income will be the same or less as before. But when the economy grows again, that conquest of SoM will inevitably lead to an increase in your income. The important thing is to understand that the time to act is now, before everything returns to normal.