Dave Hannay: If a Brand Panics in Recession, it will Disappear as a Brand

dave_hannay_2During High Impact Brands Conference I interviewed the special guest speaker, Dave Hannay, Global Commercial Head of Brand Equity Synovate London. He talked  about recession,  brands, brand equity and the importance of communication.

What makes the difference between brands in time of recession? What makes some of them stand up and others fall down?

I think there are a few reasons. One of them is that you continue to communicate, that you continue to advertise. When brands cut advertising, even if they are well known, people worry that something happened to them. People lose their trust. So it’s important that brand managers continue to communicate. Not necessary more than they were in the periods of non-recession, but they need to communicate more than their competitors.

The second one: it’s important that brands don’t try to move their image too much. So, if you have a high quality brand that begins to change its communication to low cost, cheap, that may well be a short story of success for a brand during recession. But when we come out of recession, that brand won’t be able to get back to the image it had prior to that. And it will be left behind. A brand like Apple, for example, doesn’t need to reduce the price of an iPad, iPhone, because people will buy them anyway.

I think a third factor for a brand to really perform well in time of recession is to go back to family values. It needs to be empathetic to what families are going through. This leads to try to make sure that things are affordable.

Another crucial thing for a brand is to understand whether a market view is homogenous or not, if they are all thinking the same. There is a study in Spain that shows that half of the Spanish population realized that there is a recession, but thought it wasn’t affecting them and their expensive habits. So, it is very important to know that, especially if you have a global brand, because Spain is probably not the same as UK or as Romania.

And the last thing: if a brand panics in recession and it cuts back on everything, it will disappear as a brand. If your brand is doing very badly, even more you need to understand from the consumers why is it doing bad and you need to try to fix those things. A lot of brands don’t disappear in recession. A lot of brands do suffer severely in recession, but they do fight back.

You’ve been talking about communication and about trust, but you were emphasizing the role of advertising. What about PR? What role does it play?

PR falls into two areas: it can be planned and it can be unplanned. So, for my brand, PR is essential. Good PR is essential! We talked advertising, but maybe we should say “communication”. So, both advertising and PR. Unplanned PR is referring to what competitors are putting out or to the general media saying bad things about the brand.

Is there any difference in measuring brand equity from industry to industry?

At Synovate, we measure brand equity in the same way, for all industries. And the way we measure brand equity is to understand where a brand is in a person’s mind, compared to competitor brands. What we get to is a measure of what we call "attitude". So, we are basically using two questions: a comparative rating in terms of the brand that we are talking versus other brands and how much that brand would be to our personal need. That gives a measure of equity that you can measure in any market. The wording needs to change slightly because, for example, financial services differ from consumer goods.

If your equity level is dropping, it is likely that market share is dropping.

What is the connection between CSR and brand equity?
I think any major brand has to be very aware of its CSR. Because if its CSR is not good, it will not have a high qualification for brand equity. Which is not surprisingly why all the major global brands spend that much time making sure that their CSR is the top of the mind.

Wally Olins is talking about four important elements in building a brand relationship: environment, communication, product and behavior. Are these four still equally important today? Or would you like to add another important element?

They are all definitely very important! Behavior is important in the way employees interact with the consumers. There is a direct correlation: if they are miserable, it will affect the brand equity.

I think the one that’s missing is value. In recession, value comes right on the top.

Dave Hannay is Global Commercial Head of Brand Equity at Synovate London. He had a diploma in Economics from Bristol University and previously worked for TNS (Taylor Nelson Sofres plc.). Dave has more than 15 years of experience in the management sector and in P&L Management (Profit and Loss Management).

Interview by Rebeca Pop, Forum for International Communications
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