This post was written by B&Y co-founder and principal, Jerry Youngblutt, and originally published on LinkedIn in March 2024.
Back in July 1990, when Andy Boyden and I opened the doors to Boyden & Youngblutt as a full-service advertising agency, branding wasn’t something businesses were talking about. Sure, it existed, but it didn’t have deep running roots and it certainly wasn’t a deeply understood concept. Compared to today when every six-year-old can recognize brands, it was just a blip on a screen.
After spending my career in advertising, including over 30 years leading B&Y, I’ve seen the focus on branding grow and be abandoned. After reflecting on the ups and downs of branding’s popularity, it became clear to me that, while organizations are quick to abandon branding when the business is in a downturn, having a strong brand will help you weather the ups and downs of the markets and come out on top.
Branding: A concept catching fire
As our careers and our agency inched forward, we saw branding catch fire as its true value was being realized exponentially by local and regional players as well as the more national-sized businesses that were a bit of laggards in their respective business verticals.
In those days, we were talking a lot about brand equity and brand value. We had conversations revolving around how to build brand, how to plan strategically for branding, how to educate internally for brand, how to measure brand, and so on. Brands quickly became so valued that companies feared their brand image being tarnished and organizations started writing internal rules regarding what was allowed with the brand and what wasn’t. These rules, along with brand standard guides, were fiercely protected, not just for legal reasons, but because they were seen as valuable corporate assets. Moreover, the brand value was increasing with every passing year.
A refresher on the importance of a brand
Before I continue my story, I thought it might be good to reflect on the importance of a strong brand. There are countless advantages to having a robust, well-liked brand, but here are just a few of the benefits as a reminder. A brand:
- Gives your business a personality. This personality acts as an emotional tie between you and your best customers.
- Leads to customer loyalty. We all know that it’s cheaper to nurture a repeat customer than it is to acquire a new one.
- Leads to a level of trust with the customer, suppliers and employees, which is an invaluable asset.
- Helps with not only recruitment of talent but of the “right” talent. This can significantly decrease your recruitment costs as many of your best people will be found through existing employees, clients and suppliers.
- Builds real, tangible value and equity in your company. It has been estimated that intangible assets account for the lion’s share (between 50-70%) of a stock market listed company’s value.
- Guides your path for business decisions and new opportunities. When considering a line extension, merger or acquisition, or entry into new markets, ask yourself if this path aligns with the brand that has helped you be successful.
- Allows you to charge a premium at a better margin.
- Leads to customer ambassadors who help you sell, explain your offering, promote your products, write reviews, and bring in new customers.
Recessions challenge the value of branding
In March 2001, we had a bit of a recession that lasted for 8-10 months. You may remember it. It wasn’t as severe as what came later, but it did alter behavior, especially as it related to branding. Depending on what business vertical you were in led to a direct correlation between keeping the faith with branding or abandoning it for short-term security.
To me, abandoning your brand is akin to making a financial stock investment but selling out at the first sign of trouble. I realize that panic can make you forget why you invested in the first place. However, it has been proven time and again that panic sellers lose out. In essence, they call an end to the game too soon and remove any chance they had of recovering.
Then in late 2007, we were all caught off-guard by what has come to be known as the Great Recession. It was the worst economic downturn since the Great Depression of 1929. According to Forbes, “domestic product declined 4.3%, the unemployment rate doubled to more than 10%, home prices fell roughly 30% and at its worst point, the S&P 500 was down 57% from its highs.”
So, what did all this mean for brands and branding? In my opinion, it drastically thwarted its power and value in the local and regional markets and understandably so. The panic was real. Companies that felt “okay” in 2006 and most of 2007 were on their backs overnight. Survival instinct kicked in and foolish decisions were made once again. Stocks were sold at rock-bottom prices and branding was abandoned and replaced with a focus on transactional sales. In a matter of months, brands’ self-inflicted wounds that would take years to recover from — some would never recover. Not only did brand value and equity take a hit, but these transactional-driven brand faux pas cheapened their offering, allowed lesser competitors to compete with them and were a slap in the face to every loyal brand customer they ever had. Not to mention the unintended brand messages sent to employees and suppliers. All that said, the worst was yet to come, though I didn’t see it at the time.
What I would come to learn was that the Great Recession rocked the confidence of business leadership. Just like Austin Powers, they lost their mojo. Directionally speaking, few knew where to place their foot for the next safe step. Perhaps unsurprisingly, the lack of brand adherence continued while very few businesses invested in the brands they had built. Leaders seemed to think the rules of the game had changed so much that branding should take a back seat to everything else. I would argue that the brands they had built and methodically invested in for decades were largely the reason their companies were still standing or were only slightly impacted. As the next few years crept on, the economy improved, and brands that had stayed true to themselves saw a healthy rebound.
Picking up the pieces
Looking back, I think this time period, was the most devastating for branding at local and regional businesses. I witnessed brand adherence go right out the window, and strategic planning went along with it. Strategic planning! Leaders didn’t see a reason to plan when business was constantly changing due to an onslaught of paradigm shifts in everything from the economy to culture to technology. They weren’t wrong about the barrage of paradigm shifts but they abandoned two of their greatest weapons against these kinds of shifts — branding and strategic planning.
As I see it, the paradigm shifts are not going to stop. Pivoting to “the new normal” or whatever you want to call it is going to be the order of the day. The wise understand that getting knocked down isn’t the worst thing that can happen to you— not getting up is. Making mistakes will happen if you are trying to grow and failures will result. It is how you respond to your mistakes and failures that makes all the difference.
The case for a strong brand
Branding isn’t just some “nice to have.” It’s a necessity. Branding is what can help take your company confidently into the future, or, if you want to exit, it’s what will increase your exit value.
Business growth challenges for the foreseeable future will be different than what most leadership teams have experienced in the past. There are going to be more obstacles, more complexities and more pitfalls than ever before. That said, with the use of branding, strategic planning, leveraged paradigm shifts and carefully-timed pivoting, there are lots of ways to navigate around, through and over those negative events. Proper, solid branding behaves as a solid foundation to your business to help you handle whatever the business environment throws at you.
Your business brand is the personality that attracts your best, most profitable and most ideal customers. When you combine your brand with a great offering that adheres to its promises and a strong team of employees, vendor partners and customers, you’ll be well equipped to take the time needed to plan and pivot strategically to not just survive the next recession, but also to thrive as it recedes.
Are you ready to invest in quality branding for your business? Partner with the B&Y team to create a sustainable brand that you can champion now and into the future.