In February 2009, the Dow Jones Industrial Average hit its lowest point since 1996. We all thought that was it: the worst had come and it would be smooth sailing from that point on.
Since then, we have glimpsed the other three horsemen of the apocalypse in rapid succession. We have ducked and covered so many times we can barely stand up. In the difficult post-crisis years, mergers and bankruptcies became commonplace and the Eurozone backlash had deleterious effects on the financial markets. Each time the North American economy underperformed, it sent spasms through the international markets, making it nearly impossible to get a vendor in the headlines unless they got indicted.
One would expect a PR professional to suggest that the communications campaign should not be the first budget line item to cut during troubled times. However, the crisis has shown that, self-preservation aside, abandoning your PR campaign during a difficult market is almost always a bad idea. Perception is reality so a company must do everything to sharpen its brand to a precise point and continue to engage with its constituents if it wants to weather the storm.
Are You a Candy or Are You a Mint?
Effective engagement requires a consistent, relevant and compelling message. Without this, brands will inevitably suffer. If you poll a large base of customers and prospects only to find out that 20 think you’re an IT outsourcer, 10 think you are a consultancy and 25 think you are a quant shop, your ship is going to sink. This problem is compounded in a bad market because decisions are made against a backdrop of panic.
The old adage “nobody ever got fired for buying IBM” rings truer than ever. Companies want assurances against financial failure, increased regulation, spending cuts, and so on. A company with a clear, well-maintained message is more often than not the safest bet in a down market.
When a company is struggling to identify its corporate vision or “True North”, it needs to undertake an extensive audit of its market perception. This should consider feedback from investors, friends of the firm, analysts, editors, partners and other constituents to gain anecdotal evidence that will help define its brand strategy. This includes honing its corporate identity, marketing messages, value proposition and product positioning. Some of the most basic (and illuminating) questions are as follows:
- How would you describe the company?
- What does the company sell?
- Who is the competition?
- What is the company’s competitive advantage?
- How big is the marketplace?
- What are the company’s biggest challenges?
- What is the best aspect of the company?
- What is the worst aspect of the company?
- What are the biggest benefits the company provides?
- How long will the company’s products/services be useful?
- What is the company’s exit strategy?
Elemental questions perhaps but, frequently, the respondents – even those intimately involved with the company – will sound like they are talking about completely different entities. This exercise is the quickest way to surface a perception problem. If the people closest to the company all think it does different things, imagine what the broader market could be thinking! This kind of perception problem is particularly dire in a struggling economy. If you seem schizophrenic, there are a dozen competitors who have their marketing messages down cold and they would be happy to step in, dazzle your prospects and steal your sale.
Attracting liquidity: if you build it, they will come (eventually)
One of the more visible examples of fractured brand positioning within the financial markets industry is coming from the liquidity venues. Traditional stock exchanges have seen their order flow and liquidity threatened so have actively sought new ways to improve service, increase product ‘stickiness’ and remain competitive. ECNs look nothing like they did over a decade ago when projects like Optimark came blazing onto the scene. Also, MTFs in Europe and ATSs in Canada have done their level best to attract flow and open up previously opaque markets like Fixed Income.
As a result of this identity crisis, traditional exchanges have recognised the importance of paying attention to the care and feeding of their own reputations. Often, this has meant delivering on innovation – both in terms of their business offerings and also how they communicate that to the market. It is always important to remember that success will not be achieved overnight. A sustained and circumspect approach to brand preservation will yield results over time as the markets continue to recover. The key is for companies to be thoughtful and proactive in their efforts, make sure they have realistic goals and decide in advance how they are going to measure success. Perhaps most importantly, they should plan for the long haul and react to market changes by engaging in new and more effective ways.