Brand Equity During the Economic Slowdown

In general retail, Circuit City liquidating, in the convenience field, Flying J in reorganization, replacing their CEO (a 30 year employee) with a founding family member, RBS announcing a $40+ billion loss on inauguration day; the hits just keep on coming.

Which brings us to the main topic for our blog entry: Brand Equity, and what it consists of. How do you support it in dire economic times? You will see in another posting we discuss Macy’s taking a $3+ Billion dollar write down on the “Goodwill” it acquired when the purchased May Dept stores in 2005.

Goodwill’s definition, as described by businessdictionary.com, is:
Assumed value of the attractive force that generates sales revenue in a business, and adds value to its assets. Goodwill is an intangible but saleable asset, almost indestructible except by indiscretion. It is built painstakingly over the years generally with (1) heavy and continuous expenditure in promotion, (2) creation and maintenance of durable customer and supplier relationships, (3) high quality of goods and services, and (4) high quality and conduct of management and employees. Goodwill includes the worth of corporate identity, and is enhanced by corporate image and a proper location. In other words, Brand Equity.

In times of reduced consumer spending and economic uncertainty, of the 4 items that define what goodwill consists of, one is always controllable by current management, can be changed for the better in a hurry, and is something you owe your customers, in any case: and that is number (4) High quality and conduct of management and employees. Maybe you can’t advertise like you did a couple of years ago, maybe your suppliers aren’t as generous with the discounts and promo allowances as they once were, maybe you need to be a little “tighter” with promotions and discounts to your customers… BUT, it’s your store, and you CAN control how you treat your employees, and how your firm as a collective whole treats your customers…

We must strive to make every customer interaction a positive experience for the consumer, and make sure the connection between treating customers right and keeping the revenue flow where you need it to be is clearly understood by everyone on the team. The customers are living with the same news you are, make sure they understand that your firm truly appreciates their patronage.

Branding is so much more than a flashy logo or beautiful store designs, those are an adjunct to a solid system that keeps out-of stocks to a minimum, fulfills customer needs, and motivates your associates to take a sense of ownership in how your customers feel about purchasing in your stores.

Condevco has created and rejuvenated brands for many different clients in many different retailing fields, let us help you make it through. Contact Ron with your consulting inquiry.