Why a recession is the worst time to skimp on brand marketing

brand marketing
Despite hard times, companies like Amazon and Priceline focused on successful brand marketing to thrive in the long run.

(This story was originally published on entrepreneur.com and was edited for content and style.)

Stocks are dwindling, technological growth is halting and the bubbles are bursting. If you haven’t felt it yet, brace yourself for the impact. When markets start to shift, companies are forced to turn quickly and adapt to minimize fallout. In tech, we see this happening in the form of budget cuts, mass layoffs and employee freezes.

There is no denying that some of these reactions are justified, albeit sadly. An economic boom spanning more than 10 years gave way to bloated growth trajectories, overvalued startups and unprecedented hiring. But the wake of the victims left by it offers a rare peek behind the curtain. How do priorities shift when the going gets tough? Who or what comes first on the chopping block? Do these cuts match the goals and vision defined by the company, or are they just a band-aid designed to allay the fears of anxious investors?

A long-term mindset reaps long-term rewards

In 1997, Amazon’s IPO was launched at a price of $18 per share. Two years later, the company’s valuation rose to more than 50 times its IPO value. Then the dotcom bubble burst, and a stock that once rose above $100 dropped to below $10. It wasn’t until late 2001 that Amazon began returning profits to investors. Today, it is the world’s 5th most valuable company with a market cap of $1.1 trillion.

How did the company survive when so many others failed? Much to investors’ dismay, Amazon took the slow and steady approach, focusing more on brand awareness and innovation than revenue.

In a 60 Minutes interview, Amazon CEO Jeff Bezos explained this strategy, saying, “The long-term approach is rare enough that it means you’re not competing with a ton of companies because most companies want to see a return on investment in , you know, one, two, three years… I’m willing it’s five, six, seven years. So just that change in the timeline can be a really big competitive advantage.”

Like Amazon, the online travel booking website Priceline lost $1.1 billion in the dotcom crash. Instead of cutting back on brand marketing, the company doubled. You probably remember the TV commercials featuring William Shatner as the “price negotiator,” a brand marketing campaign that was so successful it lasted the next 14 years. The company never got off the gas, spending $3.8 billion on marketing in 2021. Today, Priceline’s umbrella company, Booking Holdings, has a market cap of $78 billion.

The ROI of brand equity in times of crisis

It is tempting to focus on short-term solutions during periods of volatility. You start digging into the numbers, looking for areas that yield the highest returns. Brand equity rarely appears as a line item, because brands are built over years, not quarters. But focusing on nurturing your brand equity is just as crucial in times of crisis as it is in times of stability. Trends change, customer needs shift, but who you are remains consistent, and this ability pays off in challenging times.

Your brand is your most valuable asset. It’s who you are, why you exist, and how you deliver on that promise. They are not your colors, mascot or product. Instead, it’s about how people feel when they interact with your business at a particular touchpoint. You should be able to describe a brand the way you describe a person. Are they progressive and principled? Feminine and tough? Powerful and authentic? With successful brand marketing, the right brand identity, cultivated, nurtured, and ingrained in the minds of your audience, can always deliver lasting results.

In a time of austerity, for example, a strong brand will continue to perform:

Mouth to mouth: 91% of B2B buyers are influenced by word of mouth when making purchasing decisions, making it more influential than Google, Facebook and Twitter combined. What drives word of mouth? Brands that inspire emotional intensity receive 3x more word of mouth than brands that are less emotionally connected.

Loyalty and Retention: Retention is considerably cheaper than acquisition. When customers feel connected to your brand, part of your journey, they are more likely to weather the storms by your side. See Nike for more information about this.

To trust: According to a 2022 Salsify survey, 46% of consumers say they would pay more to buy from brands they can trust. Especially in difficult times, people look to brands they can rely on.

Revenue: The consistent presentation of a brand across all touchpoints has the potential to increase sales by 33%.

If you build it, they will come

Above all, people buy from brands they believe in. As Simon Sinek said well, “People don’t buy what you do; they buy why you do it and what you do just proves what you believe.”

Your brand identity is the expression of this “why”. It is the driving force behind your behavior, your voice and the feeling that remains after every interaction with your organization. Investing in and cultivating a powerful brand will be the determining factor in how your organization survives both good and bad times.

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