Corona, champagne and crisis -an acknowledgement of our present history and the trends that mark our brands.
(picture credit: Robert Mets)
“When everything seems to be going against you, remember that the airplane takes off against the wind, not with it.” – Henry Ford
An uplifting quote can be a glimpse of light during dark crises, however, we need to do the walking ourselves on the path leading us out on the other side. It is not given on beforehand how long this might take to reach to the other side. What will happen to our brands along this way?
The world has changed and we will not return to the same life as before the pandemic. Eventually, we will forget to a certain extent or alter our perception of this crisis. We need first to acknowledge what happened even before it occurred. Martin Lindstrom (branding guru) writes in his new book “Buyology for a Coronavirus World” that today is a new world for us all including our brands. Waiting for the green light so we can go back in time and return to our normal routines. For some reason, it seems that the green light isn’t working and that it will take some time as well before it will be fixed. Eventually, Lindstrom believes that the world’s economy will recover but this timeframe isn’t in place either. Maybe a hint to an answer could be found going back in history.
Summer 2007 business, as usual, the markets are working, or at least we thought so. A buyer and a seller will always find the right price, as long as the supply and demand scenario continually repeats itself on an open market. What happens when the genuine free will interferes and the sellers and buyers cannot agree on a price and this is repeated millions of times? Other wheels in the machinery start to malfunction as well. That was a market punch that had huge consequences even though governments supported the major banks in the financial sector. Many businesses were left on their own facing their destiny.
According to Justin Fox, finance journalist, blog post “What We’ve Learned from the Financial Crisis” then corporations are still subject to economic forces. Then it comes down to the alternative approaches in regards to understand and manage them – to deliver better results and insights. Fox also points out that the reaction was smarter in the 2008 crisis compared to the 1930s crises and the economic fallout less severe. We haven’t learned everything from the past crises even until this day – and that we will have more learning experiences soon. That assumption seems now to be fulfilled.
It still leaves the companies and their brands on a wide and open ocean. A closer examination of the value of a business and its brand leads us to the phrase “irrational exuberance” that is used by the economist and former US chairman of the Federal Reserve Bank Alan Greenspan, in a speech in 1996. Back in the 1990s, we saw another crisis: the dot-com bubble. Along with the pursuit of the fulfilment of our needs and wishes, we have briefly lost our sense of goods’ realistic value.
By now we should have quite some data. How do we react to it and have it been used for the sake of our businesses and brands? A question and its answer easily lead us to the next.
Economic crisis now seems to come back as memories in our conscious mind since this is nothing new to the modern history of humanity. We remember them after all in some way. They are not erased, may be altered, or even suppressed. Economic crises would probably by many be seen as a bad experience. A bad experience would most likely be seen by them as pain. Pain comes in many different formats and historically natures childbirth has been associated with incredible pain. Humans are even growing in numbers so does this mean that the labour pain is forgotten after given birth? It seems more likely as a cultural myth than evidence-based science. The moment when a child is held for the first time then the recent pain seems to disappear by many. This is due to the overwhelming happiness that colours up all the reward centres in the brain. One of nature’s strongest drug cocktails is on the loose. This is so powerful that it will not only shape the preceding memory of pain but also the brain. This is the “halo effect” and the pain didn’t even leave the body.
The halo effect is neither the answer nor attainable for all and it is not determined that it is arising from a “bad” or “good” experience. Michael C. Anderson, Cambridge professor, together with colleagues conducted research on a group of volunteers whose aim was to suppress unwanted memories. This was named “motivated forgetting”. The finding was that people who had reported traumatic experiences were somehow efficient at repressing particular memories.
We might not be programmed to forget for the sake of forgetting but more likely having a tool to use for the brain’s ability to carry on its mission. This naturally affects the rest of our body. The mind is indeed something we need to look more into.
“Fear doesn’t exist anywhere except in the mind.” – Dale Carnegie
(picture credit: Natasha Connell)
The same can be said about desire. Those components are essential when speaking about branding. Those are buttons that pushed on every day on all levels and indeed also during the occurring pandemic. We still find ways to satisfy our needs and wishes, no matter how you turn “Maslow’s hierarchy of needs”, so guess what a rise in the sales leisure product as sex toys, condoms and more. On the other end of the spectrum, we find a rise in gun sales as well. How you label the various products and services that are experiencing a rise during this crisis might also be culturally affected. However, it seems like natural instincts to a certain extent.
A personal narrative from March. I have experienced, like many others, when going grocery shopping that there was only 2-layered hard toilet paper if any or only one brand of spaghetti left on shells as well. I thought to myself that I can survive with one pack of 2-layered paper waiting for a new shipment arriving and that I could take a pack of spaghetti. Maybe boil it a bit longer since it made me a bit worried that only one brand was left on the otherwise empty shells. In the situation when zooming out then it felt like humans were no longer human towards each other but competitors. Then I turned to the internet and I actually ended up having the same cold feeling like my physical grocery shopping experience. Something was missing out. The service. The process was a turnoff even though I was well aware of the current world situation and the pressure on companies. I wanted to fulfil my needs and wishes as normal.
No matter your service promise, it will affect your brand and it will be challenged in difficult times, for sure. If you start to be unsure then make a support service promise to the primary one. The car manufacturer Hyundai actually went into the shoes of the potential car buyers back 2008 and based on research they concluded: they found a big fear of losing jobs made people unlikely to purchase a car. As result then Hyundai came up with a new service and stated: ”If you find that you cannot make your payment because of a covered life changing event, we’ll allow you to return your vehicle and walk away from your loan obligation – and in most cases we will cover most, if not all of the difference,” Well, it must have worked out fine in most cases since Hyundai is now again offering a similar service. Don’t assume that you understand potential customers or clients. Build rapport, then trust and show you care. Conduct research in the scope that is possible individually or together with others. Don’t wait until the storm is over since no one is fed by apologies. Ask for business consulting if you are in doubt.
It seems that some companies even benefit hugely during the current crisis.
Nothing is that bad that it doesn’t serve some. Amazon has with its business model and services delivered profit thanks to the adaption. An increase for their fulfilment options had already been scheduled for 2020 and now the sellers can also look forward to the Covid-19 warehouse restrictions to continue in Q4. This can indeed be difficult for eCommerce businesses using the warehouses and the platform if they are affected by higher storage costs and their positioning on the site. Positioning your brand would play a difference when there are changes in the market and this can be the ticket into the future. It is neither the strongest nor the weakest brands that survive but the ones that can adapt to change. Make a brand check and look into what options that support your business in the short and long term.
The value of the brand can be measured in different ways and one of them is to negotiate terms and conditions with stakeholders. The better terms and conditions the stronger your relation and brand. In the case with Amazon then they are offering standardised services divided into different options. It represents opportunities to look into activities and processes that might lead to something new. It could be a differentiated service that is needed to match your needs and wishes. However, it is important to find the cause of the fear or desire instead of reacting to the symptoms.
(picture credit: Daria)
Not that long ago I went out to enjoy a glass or two in the summer sun – of course following the corona restrictions and good etiquette. Looking at the drinks menu it was possible to get Nicolas Feuillautte champagne with a 40% discount. I thought to myself that something was wrong with it and the brand sank at my inner positioning ladder. Afterwards, I found out that it might not be a “bad” bottle. This situation is concerning the whole region of Champagne and more than 100 million bottles are unsold and a sudden ⅓ drop in sales. They have never experienced anything like this and they are even thinking about using the liquid gems for producing hand sanitiser. Even reducing the price didn’t serve the brand well, I chose something else. The world didn’t stop consuming alcohol though.
The value of the brand is determined by how stakeholders are perceiving and positioning it. If you are not in control then for sure someone else will be on your behalf and influence what your business is worth.
Thank you for your time and speak to you soon
Written by our extraordinary Chief of Learning Martin B. Hansen, communication & branding – you are more than welcome to connect with him on LinkedIn to discuss further the topics or simply request us to contact you.