There’s never been a better time to put your money where your brand is.
As business leaders, are to grow the value of our companies. Whether you’re in sales, marketing, operations or leading the entire organization, you are measured on how you contribute to your company’s growth—and, ultimately, its value.
But are you measuring all the right things?
In the industrial MRO space, we’ve become experts at reading P&Ls. We’ve survived wave after wave of acquisitions. We understand the importance of a healthy balance sheet. We’ve shortened turn times. We’ve reduced inventory. And we’re willing to invest six-and-seven-figure budgets into more efficient systems and operations.
We’re happy to spend money on the things drive quick returns—as we should be. But we’re often far too reticent to invest on the single single-most valuable asset we own—our brand. (According to a recent Millward Brown study, brands account for more than 30% of the stock market value of S&P 500 companies.)
Brand investment is second nature to our friends in the B2C world. Consumer companies know they live and die with the value of their brands. But most industrial MRO companies continue to ignore the value of a good brand.
When times get tough, when sales don’t meet expectations—what’s the first budget that gets cut? If you’re company is like most, the answer is probably marketing.
Here's my response every time I hear that:
I’ll never understand this. What’s the thinking? “Sales are down, so let’s turn off our customer acquisition engine? We’re not making enough money, so let’s ignore the very activity that drives growth?”
I could go on and on (as you’ve already seen) about why this is such a horrendous idea. I’ve seen it first-hand. It never works.
Instead, I’m going to let this excerpt from a Harvard Business Review article, “How to Market in a Downturn.” speak for itself:
“As sales start to drop, businesses typically cut costs, reduce prices, and postpone new investments. Marketing expenditures in areas from communications to research are often slashed across the board—but such indiscriminate cost cutting is a mistake.
“Although it’s wise to contain costs, failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.”
I rest my case, Your Honor.
So—even if it were appropriate to slash the marketing budget when business is down—we no longer have that excuse to hide behind. By all indications, our sector is finally on the rebound. The Slash the Marketing Budget Because Business is Bad option, as poorly conceived as it is, shouldn’t be in play right now. Nor should it ever be.
What’s more, research shows strong B2B brands drive value more consistently than B2C brands. So we have a perfect storm. Business in the industrial sector is getting better every day AND now you have the ammunition you need to justify investing in your brand.
If you don’t know how, find someone who does. (I may be able to recommend a great little resource that really gets brand building in the industrial MRO space…)
When you finally start the process--and begin reaping the rewards--here's how it'll feel: