When times are tough, one of the first things many executives pull back on is their company’s marketing budget. That’s long been a standard response when CEOs hunker down and move from “business as usual” to survival mode.
Unfortunately for those short-sighted executives it’s a move the often causes more harm than good.
It’s been proven that those executives who have committed money for advertising and marketing – read: invested in their brand – during recessions have come out stronger and in a better competitive position than those organizations that chose to hack that line in the budget.
But much like in politics, when money is on the line reason often goes out the window.
Over the past few years I’ve taken a special interest in the idea of “branding.” Call it a hobby; it’s not really an obsession. I think it started by chance one day maybe six or seven years ago, when I was reviewing the annual list of most valuable brands and saw the value of the Coca-Cola brand, along with that of Nike, and realized brands really were an investment in one’s business rather than an expense.
When I speak with executives, many agree with my viewpoint. But I rarely see them mirror their opinions with a match of their checkbooks. I’d be interested to audit the books of many of our readers to see how many say they believe they should be investing in their brand when times are tough and how many really follow through.
A few days ago, I was visiting with the CEO of a local IT and technology training company and the subject came up. She mentioned that she founded her company in 1991, during the last real recession. Lori DeVore was selling computer hardware at a time when President George H. W. Bush was struggling with the decision to raise taxes to combat the recession (a move that ultimately cost him re-election), and proving naysayers wrong who felt she was nuts to start a business.
“I’ve been through two recessions now,” she told me. “And in both cases, I decided to make investments when everyone else was pulling back.”
Most recently, DeVore bet on herself, investing close to a $1 million last year to move into a new Beachwood headquarters, upgrade technology and facilities for her company, DeVore Technologies, and step up her marketing efforts to garner new clientele.
Among her investments was a complete rebranding effort, jettisoning her company’s signature “D” brand for a three-D concept that looked cleaner, more technologically savvy and communicated a three-pronged message of “Diversified” “Dedicated” and “Devoted.”
This type of investment makes sense, according to Daymond John, founder of urban clothing manufacturer FUBU, and star of the hit TV show “Shark Tank.”
I had the opportunity to chat for about an hour with John a couple weeks ago about branding, in advance of an April release of his new book, The Brand Within, on the subject.
John and I spoke at length about why there are two key brands that require investments – personal brands and corporate brands.
“Having a strong brand, whether corporate or personal, always creates a halo effect,” John says. “A lot of time that’s the only thing that separates you from everybody else. So for example, in a tough time like this, when everybody is holding their purses and wallets very close to them, the people they will end up spending the money on are the brands they are comfortable with because the brand is portrayed as something that gives them a comfort level.”
If you’re still not convinced about the power of brands and why it’s an investment not a cost, don’t take my word for it. Trust the word of Shelly Lazarus, global chairman of powerhouse Ogilvy & Mather. I spoke with Lazarus in late 2009 and posed the question directly.
Her answer: “If you spend money during a recession, you can come out ahead. Those companies and brands that invested through this (recession) will come out stronger and ahead of their competitors.”
Dustin S. Klein is executive editor of Smart Business Network, where he is responsible for all things content-related. His most recent book, Stella’s Way, is sure to provide a healthy dose of inspiration. Reach him at