Leveraging Brand Culture To Combat Recessions

Chris WrenSeptember 3, 20193 min

Market volatility, tariffs, Brexit, upcoming elections in the US, and economic indicators point to the high likelihood of a recession impacting consumers and brands soon. Last week on Branding Strategy Insider, Corien Kershey offered six recession strategies for B2B brands. One of the strategies she recommends for downturns is to take advantage of the surplus of unemployed, experienced talent, bring in their fresh thinking and upgrade your team. This is excellent advice. When a recession forces brands to make tough decisions about their workforce, there could be an opportunity to use culture to achieve competitive advantage.

“Culture Is The Mark A Job Leaves On People” ~ Nathalie Gordon

Over at Campaign Live, Nathalie Gordon asks the question “What is workplace culture?” Her piece draws on informal social media research and gives any number of examples of the accessories to culture that are fun to read about: beer-filled fridges and creative collaboration spaces, but then she hits on the important points, saying, “Culture is the mark a job leaves on people. It’s what people say about where they work when they leave at night. And when they leave for other companies. It’s the way that where they work makes them feel. And the type of person it turns them into. It’s letting the people who work with you breathe. Explore. Develop. Live. And just generally caring about who they are and where they are going. It’s caring that they are happy but also that they are not… Culture is asking difficult questions and listening to the answers. Really listening. And sometimes being uncomfortable with what you hear.”

We haven’t had a recession in a time of heightened social media scrutiny. Back in 2008, outrage and offense were not the norm. The world was a different place. We can expect the next recession to put brands under a spotlight in the way they compensate executives, how their employees are impacted, and changes that happen through the supply chain.

Pay Cuts Instead Of Layoffs

I believe that how brands treat their employees will be the most important piece of this upcoming recession puzzle for brands to sort out. And this is because a vast majority of workers (at least in the US) are living paycheck to paycheck. Depending on which study you read, the number is usually more than 50% and closer to 75%.

Go back about 10 years and there are some interesting examples of brands that pursued a strategy of pay cuts versus layoffs. Casino mogul Steve Wynn announced salaries workers earning $150,000 or more would see a 15% drop in pay, those making less would see 10%, and hourly workers would be reduced from 40 to 32 hours. Commenting on his decision at the time, Wynn said, “We don’t want anybody on unemployment here, or without insurance.”

Mitchell Lee Marks, a professor at San Francisco State University says, “Initially, this sounds really good to people because we’re all chipping in. It’s almost like in World War II when housewives bought organ meat instead of steaks and chops to save meat for the boys. There’s a sense of camaraderie and loyalty. But what if you don’t win the war? Then why did we do that?”

The key to this lies in transparency. When the recession hits, step up your internal corporate communications and encourage employee engagement. Realize that a pay cut for top executives might mean a reduction in vacations whereas line workers might be living on a budget where every last cent is allocated. If you do have to enact pay cuts to save jobs, take a lesson from Acco Brands, who established an emergency loan program for employees when they had to drop pay by 47% for six weeks.

Most of all – start preparing now. Brainstorm events and triggers and get a rough idea for how your brand will respond. Because how you respond will matter to employees, customers, the market and certainly your brand’s future.

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Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

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