The whirlpool can suck a brand down rapidly.
Some months ago The Limited shut down its 250 clothing stores; not long after that, the women’s apparel chain announced it was filing for bankruptcy protection.
Just like that, a company that had been a mainstay of shopping malls across America disappeared from the retail front.
Several factors came into play, including an inability to compete with “fast fashion” stores that rush the latest fashions into consumers’ hands, as well as the chain’s sale several years ago to a private equity firm that cut costs but couldn’t find a buyer.
However, analysts also suggested that, like many retailers, The Limited failed to keep up with dramatic changes in shopping habits and quick-changing fashion sensibilities, making it less relevant to its target consumers.
Though it’s not unusual for brands to eddy toward irrelevancy, it’s also not inevitable.
A company can innovate itself out of a death spiral. Just as an example, IBM may have lost its relevance in computers and laptops, but it saved itself by focusing on servers, information and cloud computing.
Some insist that all companies eventually will go through a natural life cycle from birth to death, but that’s not always the case. Some can live forever—if they’re properly managed. Too often businesses get into trouble due to the self-inflicted actions of their owners.
Here are four ways to botch a business brand:
1. The loss of relevance. Staying relevant entails staying aware of changes to the landscape, the customers, the competitive brands and your brand. Understanding what your audience needs and how they obtain their products and services is essential to remaining relevant.
2. The lack of a coherent plan to win. Having a strategy that aligns employees and outside partners accomplishes a lot on the way to positive performance, but the plan needs the clear, consistent, visual and verbal support of leadership. It also must contain the vision for the organization and the plan to achieve this vision. It’s a top-down strategy. Without a clear and vibrant plan to win, a company will simply drift.
3. The lack of a balanced brand-business scorecard. A brand-business scorecard enables leaders to view the indicators necessary to create growth that is both profitable and enduring, rather than one or the other. Such a scorecard reinforces the importance of producing a proper balance between both business and brand results. Using measurable milestones—such as sales, profits, price and promotion—it evaluates whether the brand leadership is doing the right things in the right way.
4. Disregard for the changing world. Technology changes, demographics change, and so do other factors that can affect a brand. Although it’s impossible to predict the future, business leaders must keep their eyes, ears, mind and heart open to what may be possible and to what is happening around them.
Some businesses can pull out of the downward spiral, but it’s best to avoid becoming a troubled company in the first place.
Larry Light is the CEO of Arcature.