A rebranding initiative will cost a good amount of money, but there can be a huge payoff in the end.
BY KELLY RODDY
A poor economy can affect just about every business—from the local mom and pop shop to the franchising juggernaut. During a recession, most companies cut budgets and slash prices to accommodate the shifting needs of consumers. While this may help in the short term, this strategy can actually negatively affect both the franchise and its franchisees.
One successful strategy that carried Schlotzsky’s through the recession is rebranding. Instead of sitting back and holding on tight, the company decided to completely reinvent its brand in the midst of a recession. After developing a new prototype, service model and signing a co-branding deal with Cinnabon Express, the Schlotzsky’s brand is now stronger than ever.
There is a lot that goes into a brand makeover, but it all starts with a strong strategy. When rebranding, remember the “make new friends, but keep the old” rule. Never stray too far from your roots. Remember the product that brought you your original success. While your loyal base of customers will recognize and appreciate that you listened and acted on their needs, a steady stream of new customers will follow.
Three Steps to a Successful Rebrand
Many brands will become causalities of the recession, while the remaining brands will gain a larger audience and attract consumers looking for a change. Rebranding may not seem like the best choice during a recession because it can take a significant amount of time, cost a lot of money and there is no guarantee that it will be a success. However, studies have shown that the best time to steal the spotlight from your competitors is during a recession. To be effective, your company needs to conduct research, have a strategic plan in place and understand that a rebranding initiative will cost a good amount of money, but there can be a huge payoff in the end.
1 Pay attention to consumer trends. Consumer confidence diminishes during a recession, leaving many brands struggling to stay above water. It is crucial to understand consumer needs and consumer trends and be willing to make changes as needed. Companies have got to stay ahead of the trends by remaining proactive and thoroughly researching the existing customer base and new audiences the franchise seeing to attract to help it decide what to change and what to keep the same.
Often the relationships built with consumers during times of crisis are stronger and last longer than those built during times of economic prosperity. Look for new opportunities where other brands have failed and capitalize.
Consumers are facing the same challenges business owners are facing—everyone’s budgets are tighter. Consumers want to know that your franchise understands this, and they want to see the brand do something about it. Now is the time to build a strong bond with consumers. Businesses will find more value in viewing the recession as an opportunity to build their brands as opposed to sitting back and waiting for the recession to end. Consumers want to believe that your brand is in it for them. If the franchise is proactive and follows consumer trends, rebranding can have a huge payoff and be the single most important thing to do for the franchise.
2 Develop a clear brand strategy. When rebranding, it is important to maintain the core of your business, but change enough for consumers to take notice. A rebrand is about updating and keeping current with consumer trends. Researching consumer trends can play a huge part in your brand strategy. If the company focuses on consumer trends and looks at how the brand is different and how that difference creates value for the consumer, it will increase consumers’ confidence in the brand. The necessity for a clear message is more important than ever during a recession.
Knowing how unpredictable the economy can be and how downturns impact consumer spending, it is important to take proactive steps to enhance the brand and stay relevant. Generally speaking, the product is probably not the issue—it’s the perception of the product. Freshen up, make the appropriate changes and the consumer demand will follow.
3 Spend wisely. Rebranding is one of the single most important decisions a company can make. It can provide the boost needed to grab a larger market share, but it can also cost a pretty penny. Big decisions like these should be focused on spending wisely, but too often companies opt to do nothing at all. The typical reaction to a slow economy is to cut back and it things out. Ironically, if your brand decides to stand back and wait things out, he can end up damaging the brand. Many of the weaker brands, and in some cases stronger brands, will die off by the time the economy resurges.
There are tremendous lessons to be learned during a recession. A franchise does not have to become a causality of the recession. Historically, companies that invested in their brands during economic hardships retained their core audience, attracted new consumers and emerged stronger in the end. Rebranding can drive growth in an up market or protect the company’s value in a down market. Consumers tend to spend less overall and become far more selective about where they spend the little money they have. This can expose and amplify brand weaknesses, and highlight brand triumphs. As consumers become more price-conscious and less forgiving, they disregard brands that fail to provide relevant value. Companies that form a strategic plan and invest in their brand will ultimately come out of the recession unscathed, and often ahead of the competition.
Source: Franchising World Magazine