Maintaining Brand Loyalty During Tough Economic Times

Every economy has it's triumphs and failures; this economy is no exception. I've met with quite a few people representing a wide variety of industries over the past several months -- a few interesting themes have emerged. A handful of companies who have managed their businesses conservatively during the boom years (and have maintained healthy cash reserves) are now in a unique position to invest in their businesses.

These prudent businesses can now focus on improving certain aspects of their enterprise -- and at a time when they can often negotiate reduced costs. Wisely (IMHO), many of these companies are focusing their investments on strengthening customer relationships and shoring up operational infrastructure. Their thinking is that, acquiring new business is going to be hard earned in this market, but investments in customer loyalty and operational efficiencies will pay off big when the economy eventually turns around.

Of course, nobody really knows if, when, or exactly how the economy will turn around, but if it does pickup within a year or so, you can bet many industries will see the emergence of a new order.

Conversely, companies which have little choice but to batten down the hatches and try to survive the recession, will likely re-emerge from hibernation weak and anemic. These lean and overextended companies will have an uphill battle re-engaging their market, and will be saddled with a more challenging climb than their competitors, who have spent the economic winter building a strong foundation.

The dynamics of how companies spend and invest through economic cycles, is a key part of corporate longevity. This is certainly an interesting time to observe various company strategies, and soon... to see who emerges.