Everywhere you look you see companies whose fortunes were changed by the financial crisis of 2007 and the Great Recession that followed. What lessons do their experiences hold for marketers today?
Back then, banks became smaller and more focused on the communities they serve. Both Airbnb and Uber, lynchpins of a newly emerging “sharing” economy, were born. Netflix repositioned as a streaming video service offering fixed subscription pricing.
These aren’t disconnected happenings. During and after the upheaval of the Great Recession, value become more appealing than luxury to many consumers. Conspicuous consumption went out of style. Aided by social media, consumers began to demand—and get—more honesty and transparency from the companies they did business with.
This change in consumer sentiment was no secret at the time. A 2009 article on consumers trends in Harvard Business Review asserts, “Downturns are stressful and typically increase people’s desire for simplicity.” According to Stuart Elliot, The New York Times marketing columnist during this time, companies needed to change their communications to “hold the hands of wary shoppers who are spending less than during the boom times. The goal is to offer reassurance they will not be wasting money because the product being advertised is dependable and/or a value.”
Many of the companies that repositioned their brands to align with these specific changes in consumer attitudes emerged as winners.
The name of the game in 2008: Positioning around trust, simplicity, transparency and value
Consider GMAC Bank (then mostly known for its auto loans) which rebranded as Ally Bank in May of 2009. As most financial companies smarted as customers lost trust in them, and U.S. automakers were reviled for taking government bailout money, the newly named Ally Bank rebranded around transparency, playing fair, and providing a simple customer experience. From that strategic basis, today Ally provides a full range of financial products online and consistently appears “best online” and “best national” bank lists.
There are related lessons in The Hartford’s 2010 rebranding. While most insurance companies were not directly implicated in the financial crisis, and in fact acted as moderating forces, a few operating as investment banks were partially culpable for the meltdown. These circumstances were clearly top of mind as The Hartford marked its 200 anniversary. Its new messaging featured a reworked stag icon – touted as a symbol of strength and stability – locked up with the phrase, “Trusted 200 Years.”
As consumer regard for its products (and its stock price) took a dive, Domino’s needed to act. Committing to transparency at the end of 2007, the pizza delivery company admitted to flaws in its product and processes. Domino’s famously changed its pizza recipe and communications—and re-energized its brand and its fortune. Over the next decade, Domino’s stock rose 5,000%.
Hard realities underpinned some of the brand change during that era. Sharper Image, purveyor of problem-solving gadgets at premium prices, filed for bankruptcy in 2008, closed all its brick-and-mortar stores, and reinvented itself—first as a licensing company working with retailers such as Target and Bed Bath & Beyond, and under separate ownership, as an online catalog business. Both business still operate today. Print magazines, already under pressure from the shift to online journalism, took a hard hit in the downturn. But even so, some brands repositioned. Conde Nast killed off Gourmet—but the brand had a brief second life as a TV show before being incorporated into the Epicurious cooking site.
How will your company change its relationship with customers in response to today’s change in consumer attitudes?
That’s the big question you and your colleagues are probably working on answering right now. You may be figuring out if your products and services as communicated today align with people’s heightened concerns about health, the safety of social connections, are considered essential to their lives, and/or address other strategic concerns. Will it be status quo, or will you need to reposition and/or rebrand? If it’s the latter, how will you manage in a fiscal reality where share prices are depressed, profits are down, and companies are on a cost-cutting rampage in order to restore the faith of shareholders? The answer: unlock sources of funds by operating smarter, and then arm yourselves with the cost data needed to sell your recommendations to leadership.
Finding the funding to pivot
If you think a repositioning or rebranding is in your future, it’s time to get your brand and marketing operations (BMO) in order. Not only will that allow you to emerge stronger after this downturn, without a doubt, it’s the best way to find the money for strategic initiatives such as rebranding in this economy. Take on your BMO now, and when the rebranding hits, you’ll be in the ideal position to unlock funds hidden in operating efficiency opportunities and execute it with maximum efficiency. Read more about smarter ways to operate and how to reallocate resources and spend to activities that are higher value to the organization in an upcoming blog.
Get a handle on the costs of rebranding
In this environment, strategies and initiatives that are not well quantified and supported by thorough analysis have little chance of getting traction. If you want to recommend a rebrand, with or without a name change, or a brand architecture change, you will have to be able to accurately estimate the total investment required. This means developing accurate estimates of the costs to change everything that is branded to the new brand, as well as account for the costs associated with a name change (where appropriate). This includes the many touchpoints that are beyond the direct purview of the marketing department, such as IT systems, signage, and fleet/ vehicles, HR materials and in the case of a name change, quantifying the implications of a change to legal DBA’s, etc. You will need to gather sample information and required quantities for all your branded assets, along with the associated costs. Where you can’t get the costs in a reasonable timeframe, you will need to fill in gaps with benchmarks. And given how quickly things are moving in this disrupted universe, you should be prepared to complete this forecast in a matter of weeks to allow you to get to market in a suitable timeframe.
Once you have this data, you should create several rebranding scenarios that vary in quality, and in the scope and timing of the rollout, then pair each option with cost estimates that incorporate all these assumptions. This will allow you to right-size the investment to the cost appeetite of senior management and get a green light for the change.
In closing, it goes without saying that these are uncertain times. By looking to the past for lessons, and taking prudent actions today, you can streamline brand and marketing operations to enable you to do more with less and redirect resources to activities that have more strategic value. Or if you’re considering a rebranding, arm yourself with thorough and well-developed cost scenarios for what the initiative will cost before going to leadership, so you’re prepared to answer the tough questions. Either way, there are concrete steps you can take now to prepare yourself for what’s to come.
To hear more about how consumer attitudes are changing, listen to this podcast, Beyond the lockdown: Changes in consumer attitudes and business realities that marketers need to address now, featuring economist and mutual fund titan Mark Bonham along with WPP’s former EVP and M&A guru, Andrew Hall, and BrandActive partner, Philip Guiliano.