When the economy becomes unpredictable and consumers’ budgets tighten, a brand’s messaging becomes more critical than ever. In today’s episode of The Small Business Show, Bill Harper, CEO and chief creative officer at BrandBossHQ, shares his tips for successful branding during uncertainty.
Strategizing during an economic downturn
During an economic downturn, Harper believes that there are two different playbooks that a company can employ: offensive play or defensive strategy.
Playing offense: Times of economic pullback are excellent opportunities for growth-minded organizations to take a massive leap forward. It’s an ideal time for businesses to put their foot on the gas and boost marketing efforts to gain more consumer visibility and steal market share as competitors pull back.
Defensive strategy: Organizations that prefer a safer approach can play defense by staying in the market and focusing on core values. Harper urges brands to resist the urge to slash prices dramatically or rely on promotions to secure sales. Instead, he recommends reestablishing the product or service’s value by clarifying the problem it solves and the pain points it will ease to reinforce the value and avoid cheapening the brand image.
Addressing tariffs with customers
Harper advises against preemptively bringing up tariffs with customers. Instead, he recommends letting the customers raise the issue first. When they do, maintain a calm and measured stance to reassure the customer and avoid inciting feelings of fear.
If costs increase due to tariff impact, he recommends being transparent and keeping open lines of communication with the customers.
He demonstrates an example of a calm, measured response to a customer: “We’re trying to figure out right now, like so many other businesses, where things are going to land. We’ll keep open communication with you to ensure you know what we know as soon as we know it.”
Pricing strategies amid tariffs
Harper expresses that there is no universal solution to absorbing or passing on tariff costs. It is a highly nuanced situation, and the business owner must carefully weigh the decision. Before adjusting pricing, he recommends business owners ask themselves the following questions:
- What relationship do I have with my target audience?
- How frequently do customers make a purchase?
- Can my business afford to absorb the price increases fully or even partially?
He highly recommends finding some way to work with customers, even if it simply means meeting them in the middle. Companies who choose to absorb the tariffs partially or fully can use their decision as leverage in a PR statement and even advertising.
It is a strategic move that customers will remember and appreciate and could successfully capture long-term brand loyalty.
The role of aspiration in branding
High-end prestige brands such as Ferrari or Louis Vuitton rely on aspirational value in their branding. During an economic downturn, a prestige brand’s decision to hold or lower prices is a defining decision that will either reinforce the brand’s perceived value or cheapen it.
“A Ferrari is a Ferrari,” Harper explains, “And it isn’t a Ford.”
Brands that want to maintain prestige purposely inflate their pricing to create market scarcity. However, the consumers’ buying behavior ultimately dictates what brands can charge.
Brand building for startups during uncertainty
Due to the volatile market shifts, some entrepreneurs will likely reconsider their decision to start a business. However, Harper urges them to push forward and recognize that this situation provides a unique opportunity for fledgling companies.
During an economic downturn, a lot of businesses are going to reduce their expenditures on marketing efforts. For a newer company, it is the perfect time to lean in and invest as the pricing of media services drops. Harper notes that newer businesses are also likely to discover that gaining visibility with their target audience is easier due to competitors pulling back.
Harper’s final advice
Harper urges business owners to remain proactive to protect their businesses. Freezing or hoping for the best is not a viable strategy.
Regardless of the strategy businesses decide to employ, reinforcing the value of the brand and maintaining a good relationship with customers is crucial to coming out on the other side of the economic downturn stronger.
"I see this as a major opportunity because so many other people are going to pull back... You're never going to get this kind of visibility on stage or the ability to flex on media purchases because everyone else has run for cover. At this moment, you have way more leverage and visibility than you would have had. So, your dollar is suddenly worth two." – Bill Harper
