Brexit: Claiming Certainty In The Age Of Uncertainty

The post-referendum U.K. is unsettled. Keep calm and carry on, marketers, to get back some degree of control. Set your course for action and focus on three elements.

The initial shockwaves post-June 23 have only just been felt in the U.K, and they will continue to ripple for months, years, and decades to follow. Whilst politicians shy away from taking responsibility for the inevitable fallout, it’s time for businesses to try to take some elements of control for their own destiny. “Waiting it out” is the easy, but also risky option, as we are all taken by a Tsunami of change.

In the true spirit of Britishness, this article serves up a “keep calm and carry on” mantra. There are three key areas that marketers need to focus on, to bring forth some clarity, to stand up, and do everything we can to take back some degree of certainty in an age of uncertainty.

Focus On Research

Research is one part of your budget that should, paradoxically, increase at a time of uncertainty. Consider this—no one has experienced Britain leaving the E.U. before, we are in a completely uncharted territory, for which we need a map. The geo-political context has changed significantly. With so many shockwaves being felt every day, it’s important to take measurements to understand how customers are behaving and redefining perceived value in a time of uncertainty. As a marketer, how can you be there for them, at their time of need? We may find people trading down in some categories (less adventurous holidays) but trading up in others (giving themselves small-scale treats such as the morning coffee on the way to work).

An increasingly important dynamic that marketers may need to understand with more confidence is the issue of political choice and its impact on behaviour. Brexit polling data revealed dramatic difference across many fault lines, of age, social grade, urban/rural, educational attainment, income.

Debates of true British identity continue to become more complex and challenging as the dust settles. We may find that political affiliation also hardens behaviours in unexpected ways.

Don’t Be A Shrinking Violet

Don’t shy away from being bold. I’ll illustrate an example with advertising since the data is publicly available. Whilst other brands shy away from spending in advertising, it will be a time for the brave to make their voice heard. Research from past recessions shows maintaining spend can be effective at increasing share, depending on the category. Lessons learnt in the U.S. “personal care” category indicate that companies, whose ad spend remained consistent across the economic cycles from 1986 to 2006, saw an increase in stock value of 1.3 percentage points annually, ahead of those that followed the boom and bust cycles of that period.

It can be tempting to reduce spend for the purpose of short-term savings, however, the long-term impact can be severe. During the 2008 crash, U.S. “personal care” brands reduced ad spend by as much as 14% per quarter (YonY), losing market share to private label brands, who gained market traction by 3% over the same period.

Engendering Loyal Behaviours

As the old adage goes, 20% of your customers represent 80% of your value. Such statements are ever present within our industry. Although the proportional split will vary across category, one thing remains true—it costs way less to retain customers than to acquire new ones. The suggestion here is not that you need to invest significant capex on integrated loyalty solutions across your customer real estate, but to focus on identifying the reasons why people are loyal to you in the first place. If you asked 10 people why they are loyal to you, you would get 10 very different answers.

The approach should start with the question: “What loyal behaviour do I want to create?” For example, Pret-A-Manger has implemented a loyalty mechanic, whereby staff members are encouraged to give away free cups of coffee to customers of their choosing at random. You don’t need a massive systems overhaul to achieve this.

According to brand equity database BrandZ, 10% of customers are motivated entirely by price, a figure that increases during a recession. However, this small proportion of price-driven customers are unlikely to be brand loyalists. The brands that people are most loyal to are the brands that are also most favoured. During a time of recession, customers are more likely to see out offers for their preferred options when the opportunity presents itself.

So don’t sit and wait for things to happen, or blow over. Take ownership of the elements that are within your control and set your own course for action, at a time when politicians are arguing amongst themselves about who is running the shop.