Brands Under Lockdown
The Coronavirus Pandemic Tests the Resilience of the Economy
The ongoing crisis is forcing businesses to reevaluate their priorities, and brands are compelled to adapt to rapidly changing realities. Suddenly, we woke up in a world where stock market crashes, mass bankruptcies and layoffs, shortages, and quarantines have become the norm. Communication agencies quickly felt this through reduced advertising budgets and project delays. And yet, during this time of widespread social isolation, communication is more important than ever.
Brands in a Crisis
Today, brands have the opportunity to strategically invest in long-term solutions. While the cause of the current crisis is different, its effect is similar to what we saw during the financial crisis of 2007-2008. Back then, we saw that the brands that invested the most in communications were able to recover faster than others. In 2008, Walmart rebranded, creating the now-iconic symbol of the world's largest retailer.
Just a glance at the logo reflects the significant changes the company underwent. A company that focused on low prices was able to show consumers the bright side of life during the crisis, and the results were quick to follow: Walmart moved from 4th place in 2007-2008 to 1st place in 2009 in the ranking of the world's most valuable brands. Today, the company has not only survived most of its competitors but also remains a revenue leader.
The current crisis caused by the spread of the coronavirus infection was also named the first-ever “infodemic” due to how quickly it filled the information space worldwide – in both news headlines and social media. Brands could not remain indifferent to this situation either.
During a crisis, consumers become more emotional and are particularly sensitive to brand communications. Many global leading companies, such as Coca-Cola, Nike, and McDonald's, saw this as an opportunity to appeal to universal themes, emphasizing family values, friendship, and love that help us through difficult times. These brands' advertising campaigns dedicated to fighting the virus quickly went global and became a model for many.
How Nike was able to reinterpret teamwork in the context of social isolation could lead to significant shifts in its positioning. But what if you don't represent a multinational corporation whose products are used worldwide, don’t have dozens of creators, producers, and PR specialists at your disposal, and your advertising budget doesn’t allow for branded content on television and social media?
4E – Empower, Encourage, Ease, Engage
Consulting clients from various industries during these events, we developed a simple model to describe the relevant tools for brand communication, which we called 4E – Empower, Encourage, Ease, Engage. This model is primarily relevant for service companies, as it is focused on corporate rather than product brands. Although we created this model with the COVID-19 pandemic in mind, it will remain relevant for other crises, including local and regional ones. Unfortunately, we believe it may be needed again in the future, so we are preparing a full version of the document, which will be made available to everyone for study and use.
Within the framework of the model, we conditionally divided companies into four groups based on two parameters: B2B/B2C and online/offline, as we empirically observed that it was along these lines that communication strategies among best practices diverged. The four identified groups were affected by the crisis to varying degrees, but each of them still has opportunities for brand development today. Whether it's essential goods or entertainment services, every product can find an opportunity today to help or encourage.
B2C / Online (Digital Vanguard) – various forms of new media, social networks, streaming platforms, video games, online education, online retail, and delivery services. These businesses became the main beneficiaries of the situation – in the conditions of social isolation, people began to discover new ways to spend time at home, as well as to communicate more and receive information online.
B2B / Online (Builders of the Future) – IT services necessary in a wide range of industries, and traditional B2B service providers through the internet. The demand for and role of these companies, benefiting from digitalization, increased sharply when businesses began transitioning to remote work.
B2C / Offline (Timeless Values) – tourism, catering, and nightclubs, offline retail, amusement parks, fitness centers, offline education, popular consumer brands. These companies temporarily lost access to a significant part of their consumers, but the demand for their products and their importance to people did not decrease, so this time will become an opportunity for them to rethink and strengthen their relationships with customers.
B2B / Offline (Pillars of Business) – both large companies that rely on on-site production (construction, industry, and others) and those close to them, such as congress and business tourism, and organizing forums. Representatives of this group, with significant resources and resilience, can comfortably adapt to new challenges. However, others, especially the corporate event industry, which was already struggling with shrinking margins, will suffer the most from the current situation, which places them in an existential crisis. All they can do is maintain and strengthen their brand while seeking new opportunities beyond the familiar boundaries of their industries.
Based on the cases we observed, we identified the most successful behavioral strategies that can give brands in each of these groups an opportunity to strengthen their presence in the information space.
A separate topic for discussion is the work with companies' HR brands, which is now paramount for both medium and large companies, as well as small businesses that must especially carefully monitor their employer reputation. I will cover this in my next article.
Successful Practices in the 4E Model
A representative of the “Digital Vanguard,” the world-renowned video game developer and publisher Rockstar Games, promised to donate 5% of all profits from its most popular products, RDR Online and GTA Online, to the COVID-19 pandemic relief fund.
“Builders of the Future” like Microsoft and Google temporarily provided free access to their B2B products for video conferencing. Mail.ru went even further, allocating 1 billion rubles to support its partner companies through various services of the holding.
Many restaurants and bars, the “Timeless Values,” faced with a loss of visitors, began delivering their products themselves within nearby areas, with staff up to and including directors and owners making deliveries. This may become an opportunity for them to establish closer relationships with consumers, and those that survive will emerge from the situation with a stronger brand.
London’s ExCeL exhibition center, belonging to the “Pillars of Business” category, decided to offer its venue to the UK’s National Health Service for accommodating coronavirus patients and will become a temporary hospital for 4,000 people.
The Main Thing – Keep Your Identity
Undoubtedly, there can be no universal recipe for communications today: the situation is changing too quickly, each industry has its own specifics, and every successful company has its own brand, to which it is important to remain true.
Today, every company, regardless of scale, can contribute to the fight against the pandemic by using its capabilities in the current situation. For example, Novo Nordisk's foundation is donating money to scientific, social, and medical grants, while Unilever is providing free soap and disinfectants.
At the same time, the sharp metamorphoses that some brands undergo due to the information agenda can confuse and even anger people. This happened, for example, with the major craft beer producer BrewDog, famous worldwide not only for the quality of its product but also for its provocative marketing. The company decided to produce and supply antiseptics based on ethyl alcohol under its brand, but not all consumers appreciated this decision. The situation worsened when a hospital in Scotland refused to accept a batch of this antiseptic as a donation, explaining that it contained insufficient alcohol (68% instead of the 90% needed for use in medical facilities).
In the search for a crisis response, a brand should not copy others' solutions. This is a time to think about your unique role and how you can be even more valuable to the consumer. If you currently lack the resources to help others, try expressing your solidarity in the form of a message. To do this, you need to choose a careful narrative with an emphasis on gentle treatment of your audiences. At the same time, whatever strategy is chosen, it should not contradict the brand's mission and values.
If your company has resources in demand today, don't try to take short-term advantage of the difficult situation. During crises, we often see brands becoming more active and aggressively competing for customers. While this sprint can be effective in the moment, it doesn't always positively impact the brand in the long term – crises end, and brands must live with their reputation for a long time afterward. Think carefully before launching a situational campaign.
Every crisis is followed by growth. Save your strength and prepare ideas for people who have been freed from the heavy emotional burden. The world is on the brink of major changes, and if you help people adapt to them, your customers will be grateful.
5 Tips for Brands
In a pandemic, the world has changed, and no one can afford to remain unaffected by these changes. However, in the race for change, it is important to remember simple rules of communication during a crisis that will be relevant for every business.
Care About Your Brand Image: People will remember how your brand communicated during an extreme situation. Don't try to crudely take advantage of the situation – this can negatively impact your image. If you can't add constructive value to the agenda, it's better to stay on the sidelines.
Be Sensitive to Audience Needs: They will change during the pandemic. And so should your content. It's time to review your annual communication plan and decide which activities to keep and which to discard.
Minimize Consumer Dissatisfaction: Clients will have doubts and questions. Be ready to answer them. Moreover, if you realize that due to extraordinary circumstances a service cannot be fully delivered or provided with the necessary quality, take care of how losses will be compensated.
Don't Give Up on Creativity: Don't just relay the same messages as others. Create branded content that will be relevant for your audience today.
Make Communication Available: Information must be accessible and understandable. Review your brand's tone of voice and simplify it if necessary.
We at Electric Brand Consultants think that today, only those brands that can truly convey empathy to their audiences will survive. It's important to show that people come first for you and that even in these difficult times, you will remain by their side.
