Getting Business-Ready for Brexit: How to Thrive During a Downturn
For business owners, “Brexit means Brexit” means one thing: uncertainty.
With all economic indicators pointing towards a recession, the question isn’t so much ‘if’ the downturn will hit, or even ‘when’. It’s ‘how’ businesses will manage to survive it. Responsible business owners should now be busy making plans to weather the storm.
In our annual conference in January, keynote speaker Roger Martin-Fagg – renowned behavioural economist, strategist and author of “Making Sense of the Economy,” – outlined the 3 areas business owners must focus on to weather the Brexit challenge, and which form the basis of good business in any market: Positioning, People and Brand.
“The goal of positioning is to create a unique impression in the customer’s mind so that the customer associates something specific or desirable with your brand that is distinct from the rest of the marketplace.”
BJ Bueno and Scott Jeffrey, The Cult Branding Company
Differentiated positioning means making a bold statement and setting your offering apart in customers’ minds. It is the foundation upon which all marketing and business decisions should be built. By building a brand with a strongly differentiated offering, you’ll significantly minimise the impact of desperate competitor price cuts and your business’ lifetime value (LTV) should grow exponentially.
Getting your price right is itself fundamental to effective positioning. Don’t undervalue (or overvalue) your product or service, or feel compelled to follow the conventions set by the competition. For customers to have confidence in your offering, your pricing must reflect its value. Of course, pricing will also reflect cost, and the harsh reality is that, for many businesses, Brexit will mean a rise in not only material costs, but labour costs due to a scarcity of resources.
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In turbulent markets, consumers will turn to brands that are familiar and comfortable, with 82% of online users choosing a familiar brand for their first click. By positioning yourself as the ‘familiar’ choice, your business can cultivate a powerful position for itself that will enable you to – if necessary – charge a premium price during the potential Brexit downturn without losing custom. A well-positioned business should be unafraid of raising prices in challenging markets, as loyal customers will understand the need for change, so long as customers feel they’re still getting value for money.
Of course, becoming a familiar brand takes time and Brexit is a very immediate threat, but that doesn’t mean you can’t sow the seeds now for long-term success in a post-Brexit world. In the short-term, however, differentiate your brand and review your pricing if you want to stand any chance of thriving during Brexit.
“Nothing we do is more important than hiring and developing people. At the end of the day, you bet on people, not on strategies.”
– Former CEO at Allied Signal and General Electric, Lawrence Bossidy
Your people are your business’ most important asset – not only in stormy periods, but always.
Of course, looking after customers is also key, but customer-first thinking means offering the best possible customer experience. And that means keeping your staff happy – because happy staff deliver a better service. In doing so, they will boost your reputation and customer retention. Better staff offer a superior service – something customers are happy to pay more for.
The best employees aren’t only the face of your brand; they’re colleagues to bounce ideas off and help develop and grow your business. Teams focused on outcomes, not politics, will support your business to shift direction quickly without losing momentum – something especially important in a downturn.
Attracting and retaining the right talent requires building a strong employer brand, telling potential employees what your company represents and the relationship they can expect to have with your business leadership. The latter is especially important in small and medium-sized businesses, where employees are likely to work more closely with the business’ owners.
“Amazon’s combination of familiarity, ease and choice is a compelling offer, providing consumers with one place to serve many of their needs. Their vast product range and integrated services entice consumers to stick with a brand they know and love.”
– DMA MD, Rachel Aldighieri
Strong positioning and a solid team will help build your brand – the third pillar for business survival and growth. A strong brand is much more than just a name and a logo; it’s a cumulation of your business’ achievements and personality. And an effective brand makes businesses easier to manage – something doubly important in times of economic uncertainty.
Every action and interaction your business undertakes will build either positive or negative brand equity. Positive brand equity means profit; negative brand equity leads to loss. Public perception is key.
Take Amazon. After building mountains of positive equity through effective customer experiences and competitive prices, the business was badly hit by allegations of tax-dodging. The business has since made great strides, however, to redress the balance. According to the DMA, Amazon is now UK consumers’ favourite brand, as a result of the business’ focus on building better customer experiences. Brand-building is the key to helping businesses survive massive pressure – whether self-inflicted or otherwise.
Deal Or No Deal?
“Brexit deadlock, diverted investment and low business confidence are hitting firms hard. Every business will feel no deal is hurtling closer.”
– Confederation of British Industry (CBI) chief economist, Rain Newton-Smith
Regardless of the Brexit deal hammered out by Parliament and the severity of the upcoming downturn, UK businesses must remain focused on 3 things in the coming months: positioning, people and brand. These are the pillars of marketing success for the good times and the bad.
Is your business in control of all 3?
Featured image: Via Wikimedia Commons