Video clips are available at http://www.news.vcu.edu/OnTopic/default.aspx?topic=1&nid=2900.
Newswise — The economy is limping badly, and many consumers are suffering. Kelly O'Keefe, a branding expert and the executive education director at the VCU Brandcenter, believes businesses have a responsibility to project strength and assume a leadership role in such an uncertain climate. However, most businesses are responding to the crisis with conspicuous trepidation, he says, thereby missing an opportunity to connect with customers.
"They're showing vulnerability when they need to be showing strength," O'Keefe said.
O'Keefe said too many businesses are paying more attention to their own needs than to those of their consumers. This is damaging both for the brands themselves and for the economy, O'Keefe said. He believes the business sector can provide the leadership necessary to revive consumer confidence and the United States' flagging financial fortunes, but he has seen few positive examples of companies taking on that role.
In particular, O'Keefe said the business community has provided a reliably downcast tone. Branding messages have been somber and cautious, rarely inspirational, and have treated consumers as though they were fragile.
"It's as though corporate America has allowed all optimism to go down the drain, which is the worst thing they can be doing right now," O'Keefe said.
As an example of a company taking the right approach to the economic crisis, O'Keefe points to the "Hyundai Assurance" program. The deal allows Hyundai customers to return a new car " no charge " for up to a year after purchasing it if they lose their job. O'Keefe says the program shows strength from Hyundai while acknowledging the customers' plight and showing a determination to help them.
"One thing that a great brand wants to do is they want to be aware of where their customers are at all times," O'Keefe said.
O'Keefe also sees brands sacrificing the work they did to build their brands' value in better economic times. The trend before the recession arrived was for brands to seek to "trade up" " to convince customers to spend a few dollars more on their products. Brands that followed that strategy make a costly mistake now when they change course and seek to capitalize on the public's increased appetite for discounts " falling into a kind of booby trap, O'Keefe says. Once they have chased the opportunistic short-term gains found by touting low costs, they will discover they have depleted the strength the brand gained before the economy slipped south. It will prove difficult to return to an elevated position in the minds of customers, who will not be so open to paying higher prices again.
For those brands that project fortitude, however, the rewards are significant. As an example, O'Keefe points to Ford, which continues to falter but has nevertheless gained market share on Chrysler and General Motors " its American auto industry competitors that sought the government aid that Ford declined.
"Those companies that are aggressive in an economic downturn can gain more market share more quickly than they can by being aggressive during prosperous times," O'Keefe said. "It's a great time for a brand that is aggressive, that is willing to demonstrate some muscle here, to steal market share from competitors. Those are the ones who are going to be on top coming out of this " the ones who show the most confidence."
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