Shemara Stephen and Ruchi Gunewardene of Brand Finance provides some insights on what it takes to develop strong brands in a crisis
For nearly 3 months now, Sri Lanka has been battling the deadly Covid-19 outbreak that surprised the world with its rapid spread. In addition to loss of lives, this pandemic has posed a very real threat to the economy with a lengthy global recession to follow soon. We have seen the emergence of many trends in customer behavior within this short time span, many of which will most likely continue in the foreseeable future.
With the resumption of state and private sector activities, people are both concerned about their economic standing as well as their health, and for brands the attention will now turn to the ways in which they respond beyond the crisis phase to what is now being termed the “new” normal.
The 2020 Sri Lanka’s Most Valuable Brands report released by Brand Finance recorded a brand value decline of 4% due to an increase in the country risk factors even prior to Covid-19. In 2021 Brand Finance is estimating a further drop in brand value at a minimum of 9.5% due to Covide-19. Hence, based on the category that brands are operating within, we expect them to either thrive in the new environment, strive to be able to maintain their position or merely be in survival mode next year. There is no doubt that the year ahead will be the most tumultuous that will be faced. The question is what brands should be doing in such uncertain times.
Uncertainty demands that brands make short term response plans and adapt as new evidence and factors present themselves. But a strong brand will all the while remain consistent with its values and beliefs whilst maintaining a sense of responsibility to customers. So, whilst reducing losses and adapting to the new challenges, the key is to be able to stay true to the core essence of the brand meaning and building customer empathy. In a crisis, customers need to be reassured that when they turn to the brand they have always trusted, that they will deliver in this “new” normal situation. Efficient customer service and customer care is therefore vital. Brands must know how to adapt and be ready to support their customer’s needs. Being agile at these times of uncertainty is key to maintaining relationships with customers and building brand strength. The brand mantra should be “you can’t stop the waves, but you can learn to surf.”
Agility is the ability to compete and thrive by quickly responding to new market trends, customer expectations and emerging opportunities with innovative business solutions. This will maintain and improve brand strength and value.
The Covid-19 pandemic has brought many trends such as a sudden acceleration towards technology, social distancing (or rather physical distancing), a higher demand for local brands and import substitution, reduction in non-essential spending, increased focus on healthcare, greater convenience in services that are being offered to reduce stress and many more. At an emotional level, customers want to be looked after and be cared for. These trends have put businesses under extreme pressure to take quick action and respond. However, the key issue is not just adapting to these changes but being able to do so productively and economically, without compromising quality.
In these past months we have seen many examples of brands that have gone through these challenges, some of which have let their customers down whilst others have risen to the occasion. What this crisis has also taught us is that customers do not need superficial advice or gimmicks in these hard times and instead seek all the help and support they can get from their trusted brand. So, when global brands such as McDonald’s and Coca-Cola temporarily redesigned their logos to depict social distancing these were not appreciated and came in for criticism because it was a superficial response in these difficult times.
In Colombo, as the lockdown was suddenly announced, there was panic buying to ensure there were enough food supplies in homes. The demand for online orders shot up in a matter of hours. Most of the brands could not cope. Brands such as Lassana Flora and Kapruka were roundly criticized for not meeting the demand but subsequently adjusted themselves. Even Keells and Cargills Food City – brands that are on the top of the Most Valuable Brands table – took time to switch their physical stores to online whilst coming under fire, until they were able to adjust to the new demands.
Brands which looked at a new model to meet customer needs fared much better. Sathosa was the first retailer to serve customers and they were smart enough not to go the online route and instead opted to partner with PickMe which took significant pressure off them.
The recent launch of AppiGo, by one of Sri Lanka’s leading banks – HNB – which helps mainly small businesses and restaurants set-up their shop online is a great example of agility. The increasing need of businesses to shift online due to physical distancing will likely make this an attractive option to pursue for many of their customers. For HNB this initiative could not have been better timed.
The “new” normal outlook with elevated levels of financial anxiety, safety and uncertainty is changing the way in which customers perceive brands. As such, this increases the need for brands to be more receptive, quick and agile than they have ever been before. Brands need to invest to understand their operational gaps in their businesses and rapidly emerging and evolving opportunities. Being relevant in the new world and ensuring what’s right for customers is good for building brand strength and value.