By Seth Ward, co-founder of PYNK
Historically, recessions and financial crises have had winners and losers, with cash-rich (invariably already wealthy) people standing to profit the most. They can move their liquid capital into markets and assets that will either hold and grow in value due to the crisis, thereby essentially profiting while everyone else loses out.
A generous reading of this type of behaviour is to assume the ones who benefit are savvy investors capable of adapting to new market pressures. A more cynical person may, however, see this type of behaviour as the worst example of disaster capitalism where the rich profit from the misery of the poorest in society.
Coronavirus poses an entirely new type of financial crisis, and is the deadliest health threat to occur in a modern, global society. Not only has this highly infectious and deadly virus swept the world in a global pandemic in a matter of weeks, but it is also leading to the sharpest stock market decline since the 1929 Wall St. Crash, with over 25% of the FTSE 100 wiped out since mid-February. That’s more than eight years of growth gone in less than two months.
What’s different, however, is that the current crash is little to do with speculative bubbles or financial mismanagement (although these are definitely still occurring) and almost entirely to do with reduced economic activity. In fact, the current pandemic lockdown is the largest national mobilisation of any country since the Second World War…and it is happening everywhere at once.
However, this national mobilisation brings with it a sense of solidarity and mutual support. People are changing their behaviours on an unprecedented scale, volunteering, donating time, money and items, and helping out neighbours. There is a real sense that we are all in this together and we all need to make sacrifices to pull through.
The idea, therefore, that some wealthier members of society should have their businesses and investments protected while everyone else makes sacrifices is likely to make people rather angry.
As such, I expect that consumers will demand that brands act morally in a post-coronavirus world. While this already happens to some extent, post-coronavirus customers will remember how businesses responded in this time of crisis and judge them on it. If you protected your profits and shareholders over the health and financial wellbeing of the public, customers will likely go as far as to boycott your brand.
Those who emerge from this crisis with a new sense of purpose, however, stand to benefit from this brave new world. The question is: How do we build a brand with a true, authentic purpose at its core? Here are my top tips…
1. Focus on why you do what you do
As the author and motivational speaker, Simon Sinek, says: start with why. Why do you do what you do? Why did you start doing it? Why does it get you out of bed in the morning? Why do you continue to do it?
If you work on the why, everything else begins to fall into place. You discover your brand purpose, driven by human values and needs. People can identify with those values and needs, coming to understand your brand journey.
In a post-coronavirus world, this answers the question “why should we support your business”. If you are trying to make a better world, whether by developing an environmentally-friendly new bioplastic, democratising finance, or simply providing healthy entertainment, people will come to understand, respect and support your brand through good times and bad.
2. Creating your vision for the future
Once you know why you are in business, you should be able to develop a sense of what you hope to achieve. Is it a cleaner environment, a more stable financial system, or entertaining ways to get fit, for example? Or perhaps you developed a new technology that would help mitigate future crises?
When you have established what you set out to achieve, you can then begin crafting your vision of a better future with your brand in it. Think about all things that would need to change to achieve your primary goal and ensure that you are supporting those efforts.
A company called Toraphene, for example, has developed a new bioplastic that is stronger and more easily biodegradable than current options. They want to see a future where the environment and oceans are free from plastic, which is why they support ocean cleanup operations and work with The Ocean Opportunity Lab (TOOL).
When the current coronavirus pandemic is over, customers, having seen the positive effect of reduced human activity on the environment, will demand more bioplastic solutions. They will be much more supportive of a company such as Toraphene than companies like Ingeo, Vegware and EarthFirst PLA, who have effectively ‘greenwashed’ bioplastics.
3. Prioritise people over profit
Protecting profits at the expense of people and the environment has been seen as a necessary evil for much of the 20th century. People are, however, starting to call out businesses which are seen as taking without giving back.
It was a backlash that started before 2008 yet was exacerbated by the global financial crisis. Banks and other financial institutions across the world were taking billions of dollars in bailout money while evicting homeowners and businesses that couldn’t afford debt and mortgage repayments. They protected themselves and their shareholders at the expense of national finances and global stability, the effects of which we are still feeling to this day.
Post-coronavirus customers will be even less forgiving, opting to switch to brands that have shown purpose and helped protect people even when it would impact profits. This will lead to a new generation of disruptors that will up-end entire markets. By prioritising people and environment over profits, you set your brand up for long-term post-coronavirus success.
4. Engage customers on a personal level
If there’s one thing people have realised through the coronavirus crisis, it’s the power of personal connection. Communities are coming together on a level not seen since WWII to support and look out for one another. Whether that is fetching some shopping, collecting a prescription or simply sharing supplies ‒ people are pulling together.
This level of personal interaction feels in stark contrast to the impersonal and cold behaviour that began to develop over the past 10-20 years. And as people become more personal, so too will companies need to engage people on a personal level to earn their trust.
Businesses that broadcast without listening, or who create customer service loops to evade criticism, or which simply fail to connect with their customers, will lose business. Those who bring their customers into the fold and treat them as valuable human beings will gain a lot of trust. Engaging people can even help deliver the power of the crowd.
My business, PYNK, for example, uses the power of the crowd combined with state-of-the-art AI and machine learning to accurately predict market movements. Our crowd provides their predictions and ROSE, our AI, learns which forecasters are most accurate and uses their predictions to minimise noise and improve market forecasts. We then give our findings back to users free of charge to help with their investments. It’s an example of how we are using the power of the crowd to help our customers and democratise finance – it forms the backbone of our entire business.
Of course, the key to building a brand with a true purpose is to be wholly authentic. Customers have developed the ability to sense when purpose is being used solely as a marketing tool. They will also be far less forgiving of brands that get found out.
Brands that demonstrate they are working towards a noble social cause or a vision of a better future will, in contrast, be supported, even when things get tough. Not only will that make your business more resilient during the next crisis, it will also win the trust and loyalty of your customers.