Tue, 04 Oct 2022 07:25:51 GMT
In times of crisis, there’s nothing more unwelcome than hyperbole. It’s important to retain a sense of perspective and - particularly in an industry notoriously prone to excitement - keep a level head.
With that being said, all indications suggest that many countries are heading into a generation-defining cost of living crisis. The way that brands respond could well determine the shape they’re in when we collectively come out the other side, as well as the perceptions their audiences have of them well into the future.
As price point looks set to become a more important issue for consumers, there are fears that long-term brand building initiatives could be sacrificed as budgets are squeezed and priorities re-aligned. To reflect on how brands can look to navigate this uniquely challenging winter, LBB sat down with Mint’s group strategy director Elliott Altilia…
Elliott> We haven’t seen such a significant increase in cost of living for a generation. Simply put, people will prioritise their immediate needs, and reduce their discretionary spending. We can expect big box retailers to continue to have record setting quarters as people become accustomed to paying higher prices for basic goods.
That being said, people have become accustomed to the convenience of digital shopping and buying the things they want, when they want them. This leads to massive opportunities for innovative financial services, like buy-now-pay-later brands such as Klarna, a Mint client that’s reshaping how people borrow money. Such brands allow people to buy things they want within their budget, without relying on credit card debt.
I’m of the belief that brand purpose will continue to be as important as it’s always been: a key organising principle for a brand, and a magnetic sense of belonging for a brand’s audience. However, brand purpose is highly dependent on category and the availability of a product. People obviously care less about the brand purpose for a salt brand than a lifestyle apparel brand.
In short, it’s important, but there are other factors at play that may be as important if not more.
During difficult economic times, marketing expenditures are always the first to get cut, despite knowing such cuts will have larger negative long term impacts compared to if clients continued to invest in brand-building initiatives. I understand that these decisions are made outside the marketing department and there are shareholders to think about, but it’s incumbent on marketers to fight to protect their brands in moments of crisis.
Building strong brands takes time and many marketers have already invested that time and money. Don’t sacrifice all that work because of what’s immediately in front of you. Continue to be a steward of your brand.
Elliott> The pandemic offered a lot of lessons of what not to do.
If we travel back to the spring of 2020, every brand made the same exact commercial about how much they cared about us. Suddenly, car companies I could never afford now cared about the wellbeing of my family. Except we all know they didn’t care. It was awful, and a huge indictment on the ad industry.
Brands always have to adapt their message and tone during difficult times, but that doesn’t mean hopelessly pandering. People aren’t stupid. They know the difference between brands saying things they believe in vs. things they think people want to hear from them.
Elliott> I don’t think so.
Brand purpose has never necessarily been about the betterment of society or solving massive societal problems. It can be, but it doesn’t have to be. One salient example of the former is Patagonia and its recent sale in order to help combat climate change. But a brand like Nike, whose purpose is to empower athletes with innovation and inspiration, is an equally purpose-driven brand.
Brand purpose is always about having a clear understanding of why the brand exists. Full stop. Brands that have a clearly defined purpose that people inside and outside the organisation know are always better equipped to navigate difficult times.
Elliott> Yes. As I mentioned above, hard times mean budget cuts and budget cuts affect brand building. This creates a great opportunity for challenger brands, who can encroach on category leaders by investing in long term initiatives while big brands are trying to hit quarterly earnings.view more - Thought LeadersMint, Tue, 04 Oct 2022 07:25:51 GMT