Managers' Corner
Racing through Recession: Every business owner can learn a few branding lessons from the Daytona 500
by Ethan Whitehill | Published in April 2008 Departments
Every spring for the last 50 years, stock car enthusiasts across the country have packed their sunscreen and descended on Daytona. This year, unfortunately, the economy also decided to head south for vacation.
But fear not, race fans. There is hope for the brand that doesn’t want to lose ground in a slowdown. In fact, many of the same strategies that help NASCAR drivers win on the track can help your company survive the rough recessionary road ahead.
Pedal to the Metal
Any driver worth his roll cage will tell you that to maintain stability in a turn, you’ve got to accelerate through it. Brake before a turn, but never in one.
For companies, this means it’s okay to tap the brakes and make some adjustments when leading indicators signal potential trouble.
Try this when you’re in a downturn, however, and you’re likely to lose control.
So give it some gas. Increasing your investment even a little in R&D, innovation, branding or advertising will pay back big time when you turn the corner. This maneuver has been proven time and time again by successful businesses. Multiple studies have shown companies that don’t cut marketing spending in a recession nearly double the growth of competitors that do.
Efficiency Means Flexibility
When the race is close, every second counts and the crew chief must make a choice: pit or pray. If he’s confident his crew can change four tires and fill the tank in less than 12.5 seconds, he’ll use the pit for competitive advantage. But if he doubts his crew, he’ll skip the pit and hope his driver’s fuel and luck don’t run out.
In business terms, an efficient operation gives companies the flexibility to make good decisions and the speed to seize fleeting opportunities. This is especially important when the economy dips and the race for market share heats up.
If you’re running heavy now, do your brand a favor and get your organization in shape by optimizing systems and eliminating underperforming programs. You’ll gain valuable time for innovation and grow customer loyalty through continuous improvement.
Find Drafting Partners
Because NASCAR sets strict limits on technology, no car can pass another based on horsepower or body design alone. That’s why drivers constantly tailgate teammates to reduce wind resistance. A drafting car can gain another three to five miles per hour — enough speed to slingshot past competitors.
Recessions, like NASCAR, level the playing field. A company’s position after a downturn has less to do with its momentum before it than its actions during. Smart brands look for drafting partners to help them minimize economic drag. Often, such partners come from adjacent industries or different markets and offer access to new ideas, customers or geographies.
For event marketers, a recession may be the right time to formalize your alliance with that venue, for example, or travel company, ad agency or media partner you’ve come to trust. Together, you can create a winning value proposition for your clients and their audiences. It may also be an ideal opportunity to hire new expertise as talent from key prospects and competitors becomes more mobile.
Consider the potential partners you could draft in this recession. Chances are you’ll find someone who shares your desire to grow — and blow the doors off the competition.
Rev it Up
Of course, other companies will see opportunity in recession as well. So remember to defend your territory — competitors in your rearview mirror may be closer than they appear. The last thing you want is to have a rival run your brand into the wall for the lead.
When it comes to driving growth in a down economy, don’t be afraid to invest in your business and rev up your brand. By pushing the turns, mastering the pit, drafting the leader and driving defensively, you just may capture the pole position right in time for the recovery.
About the author: Ethan Whitehill
Guest columnist Ethan Whitehill is founder and CEO of Two West Inc., a transformation design firm that helps solve growth problems for brands in transition, with offices in Kansas City and Los Angeles.
Contact: ethanw@twowest.com