The value of brand in a recession

Most people would agree that the recession has so far produced a flight to brand in the consulting market. But will this continue to be the case?

There are two forces acting here.

The first, pulling clients towards familiar firms, is security. Of course, this has always been important to some extent, especially where high-profile, critically important projects were concerned. But it is unquestionably more acute now. With limited money to spend, clients are reluctant to bet it on a horse their colleagues may not have heard of. Brands have been backed by two other advantages (which have helped reinforce the brands in their turn). Big brand firms have had the resources to invest in account management over recent years, continually walking the corridors of their clients in a way their smaller rivals couldn’t afford to. They are also the firms to have benefited most from the relentless shift towards preferred supplier lists. If you only have space for five firms on your list, who would you choose?

But pulling against this is something quite different. One of the reasons why clients choose a firm with a brand is to overcome internal uncertainty or even dissension. Hire a well-known firm, the argument goes, and its credibility will rub off on our strategy or business case. Worried that your colleagues won’t agree with your analysis? Hire a big brand firm to validate your thinking. There’s nothing wrong with this: we all need support and encouragement from time to time. You might think you need more of it during a recession – but I’d question that assumption. With fewer initiatives possible and the financial crisis making it clear what organisations need to focus on, the level of internal debate on how to deploy their resources has to be muted. Clients won’t need expensive, big brand consulting firms telling them whether project A is better than project B, because they can’t afford to do either. And they don’t need a firm to tell them what to do (cut costs, conserve cash) – and that could leave the big brands higher and drier than they expect.