The stunning outcome of Britain’s decisive vote to exit the European Union has caught the political, economic, and business world by surprise. Creating uncertainty in world financial markets, the future of the European Union, the pace of globalization, how to strategically plan for an eventual exit, and how to prepare for potential risk from this event.
One area of concern for businesses is how to approach and conduct global business marketing. What we can be certain of is that businesses, people, and various types of organizations will undergo a transformation in how they make decisions, exhibit buying behaviors, and recast their goals.
Here are a few Brexit influences that will undoubtedly have an impact:
1.) It Is Not About Politics, But About Borders
We are experiencing, more so than ever before, a divisive canyon between the left and the right in political terms. However, an economic outcome from Brexit is we will experience a fissure between open or closed market thinking. This will make it essential for business marketers to understand regional and national sentiments towards open or closed market economies.
An increase in nationalistic closed market economy thinking may result in more compliance, licensing, tariffs, and other regulations. Making it harder to market in certain regions or countries. While in the modern world, complete closed market economies are far less common, what we are witnessing today, via Brexit, is sentiment towards protectionism.
2.) Localization Within Globalization
Global business marketing strategies, in a world where countries may pull back from open market growth towards closed market sentiments, may have to go through some rethinking. Global organizations, where revenue from foreign markets can be over 50% of total revenues, are especially exposed. Some have been busy preparing for such a day.
One such company I have had the privilege of working with recently, GE, has been preparing for such an event through a specific localization strategy. GE CEO, Jeffrey R. Immelt, was recently quoted in the New York Times as saying “a localization strategy can’t be shut down by protectionist politics.” This was exemplified by GE increasing manufacturing capabilities via the 420 factories they have worldwide. Immelt described their efforts as achieving a “local capability inside a global footprint.”
Another organization I have had the privilege of working with is Thomson Reuters. They have been busy on two fronts. One, advising their tax and accounting clients on implications in three areas – U.S. based, globally, and country-specific financial ramifications. Two, ramping up Reuters News Agency coverage of Brexit. Both with an aim towards incorporating localization.
From a global business marketing perspective, business marketers will need to become more adept at how to incorporate localization into their global marketing. A tendency in global business marketing is organization can get comfortable speaking to global markets in one universal voice. This may no longer be effective.
3.) Know Your Buyer’s Behaviors – And Thinking
One of the remarkable insights into the Brexit vote is not so much how the vote may have split between left or right politics. But how the Leave vote and the Remain vote differed by ages and education. In simple terms, the Remain voters were younger and a higher percentage had participated in education beyond high school. The Leave voters tended to be older and less holding post-secondary degrees.
This trending along these lines may hold true throughout Europe. While there is demographic importance to such trends, implications to global business marketing can manifest itself in different ways. Within each group, if we were simplistic in naming two groups Remain and Leave, are about to undergo readjustment of their buying behaviors and thinking post-Brexit vote.
This is the core of buyer insights and buyer personas – understanding how buyers goal-directed behaviors and goal-oriented thinking influence their buying decisions. For example, in a global buyer persona research study for Thomson Reuters, we noted specific goal-directed behaviors by region and even by type of scenarios taking place within countries. Thus, making a, as Immelt of GE put it, localization strategy within a global footprint possible.
Essential to global business marketing is understanding how cataclysmic events disrupt and influence how businesses, people, teams, and organizations change in their behaviors. Meaning, those responsible for global business marketing will have to monitor and refresh their insights on buyers as well as their buyer personas they may have by regions and/or segments.
Prepare For The Unexpected
In the short-term, it is expected the impact of Brexit will be felt through an economic slowdown, specifically in the U.K., as it may take two years to fully exit from the EU. Long-term impact could be related to new rules and regulations that do not exist today. Making compliance related to trade and business marketing tougher to navigate.
For global business marketers, the Brexit pebble has hit the pond and is sending out waves of change. Being in tune with subtle changes related to how buyer goals are changing, how buying behaviors are changing, and how buying decisions are changing will be necessary. Necessary for adapting to a new world of how to resonate when new dynamics and thinking become present.
Is globalization going away? Not likely. Will there be the unexpected retreats from globalization from time to time? Yes, likely. Being prepared with a deeper understanding of markets and buyers will put businesses in a better position to adapt to such events like Brexit.
(What follows is a short video from CBS News Saturday Morning. CBS News senior business analyst Jill Schlesinger makes the point that we have witnessed a seismic shift in the global economy due to Brexit. And, how businesses must keep watch and prepare for the future.)