"When will the recovery begin?" I've been asked that one question more times than any other during the past three years, as business leaders struggle to navigate the stormy economic landscape. My typical response is, "It never will," since the word recovery implies a return to "normal."
For the foreseeable future, now is the new normal. The worldwide economic reset has permanently shifted consumer expectations, and business approaches that were successful during more robust economic times are proving ineffective these days.
Today's consumers are anxious about their financial situations and futures, as they should be. For that reason they are extremely price, quality, and value-conscious. They've responded to the marketplace with bargain hunting, decreased usage, major purchase delays and reduced consumption in many categories.
Smart companies have adapted to these conditions in a variety of ways, including streamlining operations, slashing discretionary spending, renegotiating contracts and payment terms, and reducing prices. One particular approach, which attempts to maintain growth and margins while meeting the new demands of the transformed economy, is called repositioning.
Repositioning, in the classic sense, is a marketing communication strategy designed to reframe a company's offerings in a more favorable light to better appeal to changing consumer sensibilities. Today it's primarily intended to lure customers by emphasizing value for money.
For example, instead of using advertising to position a luxury automobile as a status symbol, a company may choose to reposition it as a sound investment. A premium detergent brand may change its messaging from "whiter clothes" to one that emphasizes the cost savings gained from cold water washing. A cosmetic brand may shift away from competitive positioning to one that compares its brand to much pricier alternatives, like cosmetic surgery.
In some cases, companies may choose to reposition the entire business, rather than just a product line or brand, in order to change existing consumer perceptions. For example, a company may find it necessary to initiate a rebranding effort to allay consumer fears, as GMAC Financial Services did in the wake of the U.S. auto industry woes by renaming its banking unit. Or a company may change its brand message to appear more empathetic or optimistic, or simply to capture attention and spread awareness.
Whatever the reason, the point of repositioning and rebranding is to shift expectations. It's about changing the way consumers perceive the brand, primarily by changing the way the company communicates.
Is repositioning a brand by way of messaging enough to persuade consumers to remain loyal, maintain purchase frequency, or trade up and pay a premium price during tough economic times? That depends on many variables, including, but not limited to, the number of competing alternatives, the perceived value of the alternatives, the relative price, the price differential, the creative approach, etc.
However, what truly matters when consumers are actively discerning the relative worth of competing brands is not the message. Rather, it's whether the brand adds unique and tangible meaning and value to their lives. They may remember a brand's message, but customers choose and talk about the brand experience.
The best way to assure that consumers choose your brand is to create a unique mix of value, build the capabilities to deliver that value over time, and then repositioning the brand to reflect those offerings.
We're living in a new world now--one that revolves around the rapidly changing expectations of the customer. There's no stability. You must move with people, like a life preserver in a shifting sea. You must catch their wave. Get out there and interact with your audience. Find new and compelling ways to become meaningful to them. Try something new and see if it takes hold.
Leaders must realize that they cannot stand still, broadcast messages, cross their fingers, and hope that the recession will end and everything will return to normal. It won't. Throw away the branding textbook. Forget about trying to engineer your brand through creative messaging and associations.
Instead, stay tuned in and connected to the living, breathing marketplace of your audience's fears, challenges, and aspirations. Brand isn't a noun to be promoted; it's a verb to be lived. Put your brand at the heart of your organization and make people feel that they exist at that heart. Get everyone focused on the outside and talking about customers and their feelings. Rediscover your unbridled imagination and idealistic hopes and create new and preemptive benefits for your customers.
Is repositioning enough during a slowdown? It is if it communicates relevant, fresh and undeniable meaning and value. Value that customers are willing to go out of their way for or pay a premium for. Value that customers feel compelled to share with their family and friends. Value that surprises and reassures people. Value that truly makes a difference in people's lives during a very difficult and stressful time.
