The Brand Path to Reinventing Turnaround Growth
Poor budgeting and/or bad financial management may be only part of the reason why a company falls into financial distress. Other underlying reasons could be that the company failed to adapt to its customers’ needs, that it provided poor customer service or support, or that it placed profits ahead of its employees. While it may seem like the end of the business (or world for some), it could in fact set a path forward for its turnaround.
When a distressed business is looking to stabilize and/or be sold, the most immediate action is for turnaround experts to manage the company’s debt and assets in order to maximize its value for an exit plan. However, if the situation is more of a “wholesome turnaround,”i.e., focused on restructuring and renewal, branding is often underutilized as part of the overall turnaround strategy and for pointing the company in a new direction.
Signaling New Growth and Revenue
When approaching how to turn around a distressed or troubled company, ScheinerInc. really gravitated toward what the leadership of Alverez & Marsal expressed here: “Band-aids don’t address the company’s strategic and operational weaknesses, which will continue to show up in different ways.”
In addition to strengthening the leadership and ensuring that the business model has changed, the turnaround needs to be supported and sustained through “actions that can accelerate and improve the outcome of turnarounds, including investing in the right advisors, funding battlefield promotions to lift employee morale, investing in digitization efforts and investing in marketing.”
“Band-aids don’t address the company’s strategic and operational weaknesses, which will continue to show up in different ways.”
As for jump-starting positive cash flow, branding can support this through purpose and relevance, helping to curb any negative company perceptions and aiding in restoring revenue. While cost-cutting measures may temporarily help the financials and profitability, the long-term implications of just cutting costs could do more harm than good by further damaging the brand in the eyes of customers and employees, accelerating a download spiral in profits, eroding trust and being perceived as weak against competitors.
“While cost-cutting measures may temporarily help the financials and profitability, the long-term implications of just cutting costs could do more harm than good by further damaging the brand in the eyes of customers and employees, accelerating a download spiral in profits, eroding trust and being perceived as weak against competitors.”
Broadening Your Turnaround’s Vision and Purpose
As the brand begins to move from survival mode to financial stability and growth, now would be the time for the turnaround team to present the company’s strategic vision and purpose, detailing how the organization can rebuild, restore and reinvigorate its presence with stakeholders, customers and the marketplace. As these organizations look to regain a foothold driven by sustainable growth, as first described here, there are several ways organizations can begin to do so:
Think About Your Brand or Service Differently. Change what you already know about the brand or service by looking at it through the eyes of a new customer, industry or purpose
Redefine Your Audience. Who would be willing to spend more on your product or service and help lead the way toward creating value? How can you change or adapt to a new buying behavior?
Find a Simple Way to Increase Perceived Value. Can something be packaged differently? Is it a color change, or maybe it’s a simply a design, new feature or messaging tweak that encourages customers to take notice
Repackage Your Offerings. How can you bundle your product or services differently? What can you change to make it appear that you are offering more to your customers than you are currently?
Consider a Name Change. Whether it’s the company or product, changing the name can do everything from making your company or product more memorable to changing perceptions to differentiate you from competitors
Expand Your Online Marketplace. Look beyond traditional ways to sell or distribute your product that makes it more accessible and shortens the path to purchase for customers
Decommoditize Your Product or Service. Develop a story around what you do that will emotionally connect your purpose with your audiences and will elevate its value
Rethink Pricing. Can you segment pricing based on offerings, or perceived value based on tiers of services?
As shared here, “Rebranding can be a tool for positive change. If your brand is dealing with negative attention, then perhaps you can focus on how the brand plans to “make things right” for its customers. Tap into new technologies to show customers you are committed to their needs now—and in the future.”
While there are certainly many other ways to resurrect a distressed brand or company, the more you broaden your approach, the greater your chances are to achieve turnaround growth and a return to solvency.
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Photo by Josh Withers on Unsplash