“Pyar se darr nahin lagta sahab, 2020 se lagta hai”.
As we enter into the New Year 2021, this just might be the feeling in everybody’s minds be it a business or an individual. The passing year just saw some unprecedented things experienced by any generation ever.
With strict lock-downs followed by large-scale movement restrictions, businesses took massive hits on their operations, especially the start-ups who had to bear the maximum brunt of the slowed economic scenario. The GDP shrank by close to 24% and 7.5% in Q1 and Q2 respectively which was never seen before.
However, this is just one side of the story. There exists a brighter side too!
A lot of new and innovative business models turned into reality and a lot of new fledglings took wing even in such difficult conditions. In fact, those who were quick in re-aligning their plans as per the new situation and kept working on it diligently got rewarded handsomely in their endeavours.
Come hardships and the first reaction of any individual or a business is to cut down on expenses. In businesses, one of the first expenses to be trimmed is the branding expense, especially by start-ups. Seen as a money guzzler without any tangible returns, most start-up founders feel that branding expense can best be either avoided or pushed for later. But is it wise to cut down on branding expenses at any point in time?
Let us find out.
Is branding expense required at all?
Most start-ups dedicate their maximum resources to getting their product or service offering right. Needless to say, this should also be their priority. But then, one cannot keep on focussing on just inward activities, you have to look outside to your customers too!
In what way does a branding activity help?
Branding is an activity that acts as a bridge between the customers and your product offering. Also, branding is such an input that will convert your product from a “sales push” to a “consumer pull” driven category. Branding creates those talking points which can help you in attracting your potential customers and help you differentiate yourself from your competitors.
If it is unavoidable, then how should I manage it?
Branding expense should be given the same importance as that of a product improvement or enhancement. However, during tougher times, branding expense can be optimized and rationalized better than being cut haphazardly. There are sub-heads within branding that founders must evaluate on an importance scale.
Which expenses can be optimized?
Media buying expenses is one of the costliest items in any branding activity. Founders need to focus on media vehicles that will get them the best bang for their bucks. For instance, during lockdowns, Out-of-home (OOH) media consumption was almost close to zero, hence brands that avoided outdoor and OOH media saved their money. But brands that went digital or increased their digital expenses saw a better performance as their customer was always available online. Digital even allowed them to avoid spillage and targeting the right customer profile.
Which expenses should not be optimized?
Expenses towards product improvements should not be touched. For instance, packaging improvements or product revamps should not be stopped. These improvements give instant and long-lasting results no matter what the economic condition outside. Another such expense is while drawing consumer insights and collecting their feedback. Expenses done to maintain the consumer dialogue and feedback should never be touched. These are highly sensitive activities and impact the brand’s survival in the long run.
Getting professional help
It is advisable to get professional help when the situation becomes tough. Imagine you are stuck in a jungle at night and don’t know the way out. In such a situation, you would rely on the expertise of a professional to get you out even if there is a minor cost attached. The same holds for a business too. Being a founder does not qualify you to become the master of all things. There are certain things best left to professionals and branding is one such thing. However, you can rationalize the expenses rather than going overboard with it.
When in doubt, ask.
The cardinal rule of survival is to ask the relevant experts when in doubt. There are a lot of industry stalwarts who help businesses, especially start-ups, on a pro-bono basis in a wide range of situations. Approach your mentors or request them to guide you to the right expert to bail you out.
An economic downturn or upturn should never be a reason why branding activities should be altered. In fact for start-ups branding should be considered as a necessary and unavoidable input. However, it can be definitely managed well especially in such a tumultuous year like 2020.
Authored article by Shashwat Das, Founder, Almond Branding.