The power of branding for small businesses during an economic downturn
Small businesses are the backbone of the UK economy, accounting for 36% of turnover in the UK private sector and half of the UK workforce. However, this backbone is experiencing a great period of economic uncertainty as both their costs have increased and customers have less to spend. This uncertainty has led to four in five small business owners struggling to plan beyond 2023. Facing such economic headwinds, small businesses should look to the power of branding as the way to continue thriving.
Our survey has revealed that only 14% of small businesses have increased their marketing budget and efforts in reaction to the economic downturn, but is this the best course of action?
Let’s look at the facts
Branding is not just about creating a vibrant logo or catchy slogan, it is a source of growth and competitive advantage for small businesses. Developing a strong and consistent brand identity can help small businesses establish brand awareness, increase recognition and improve customer loyalty. According to a 2019 survey by Lucidpress, companies that prioritise their branding are three times more likely to experience revenue growth of 10% or more.
Another example of the power of branding is the 2008 recession. Many businesses were pushed into making regressionary decisions and, as a result, advertising expenditure dropped by 13%. Yet, statistics showed 3.5 times more brand visibility for companies and organisations that maintained their marketing output. Small businesses who invest in marketing during economic downturns see far greater success and growth in the long run than those who batten down the hatches.
Establishing a sense of trust during hard times
Customers are tightening the purse strings given the current economic climate, and small businesses must be empathetic with the struggles their customer community is experiencing. Strong branding can help provide customers with a sense of trust and reliability, as it reaffirms small businesses values and dedication to the community. After years of economic uncertainty, empathy and trust matters more than ever. Achieving brand consistency across all mediums, from business cards to logo and website design, make businesses more identifiable and reassures customers that the business is there for them and their community.
David and Goliath: levelling the playing field
Strong and consistent branding can help small businesses expand beyond their local market. With the rise of ecommerce and digital marketing, it’s never been easier for small businesses to reach customers beyond their geographical area. However, to succeed in a crowded online marketplace, a small business needs to have a clear and compelling brand identity that resonates with its target audience.
Strong branding helps to level the playing field with larger competitors. While big companies may have deeper pockets for marketing and advertising, small businesses can leverage their brand identity to create a strong emotional connection with their target audience, building an online community whilst maintaining their local community simultaneously. For example, a local coffee shop can build a loyal customer base by creating a cosy atmosphere and offering personalised service that is hard to match by larger chains, creating assets like loyalty cards and invites, or organising events for new products. It’s important that small business owners find the right level of external support to take some of the weight off their shoulders.
Find the right partner and say goodbye to stress
Small business owners need to find a balance between managing their business and taking care of their personal well-being. We know that they are working harder than ever. In fact, recent research by VistaPrint found that 41% have increased their working hours over the past few months, by an average of 7 hours per week. To make branding work, small business owners need to start setting realistic goals, delegating tasks, and finding time for self-care and rest. By taking care of themselves, they can create a strong foundation for their business, increase their productivity and creativity, and reduce stress and burnout.
Finding a partner you can trust to assess and support you across areas of the business has never been more important. Over the last decade we have noticed an evolution in the type of support small businesses are looking for, with far more seeking to market through digital and social channels. This trend accelerated over the pandemic, when digital platforms became the main channels for customer engagement for a lot of small businesses.
At VistaPrint, we have developed services to support small business owners at every step of their journey. They are provided with expert design help from day one when they’re considering their website domain, through to the development of social assets and the creation of promotional materials. As a result, small business owners can create physical and digital marketing materials - and the brand consistency that results in improved customer loyalty and awareness.
Small businesses don’t need to win the lottery to start marketing well – far from it. They can take a small budget and make the pennies stretch, but more importantly they need to recognise that branding and marketing is an investment in growth. Marketing is absolutely critical for customer acquisition and business growth – the two main priorities for most small businesses. That’s why some of the most successful companies spend upwards of 20% of their annual revenue on marketing.
Small business owners are the lifeblood of the UK economy, and their well-being is crucial for the success of the country as a whole. Whilst intimidating, these periods of uncertainty can provide a great opportunity to differentiate and build brand loyalty.