Business/Communications Issues
Thought Leadership
Marketing in a Downturn: Head Down, or Neck Out?
We had a meeting with the head of an investment company recently, a firm that is our client. At the meeting, the CEO said, “with the markets the way they are, why do I need PR?” He saw visibility for his firm—through media coverage or any other channel—as unnecessary, or worse, dangerous. He was concerned that he (or one of his people) might say something that would later be proven wrong. In other words, to him, the mere fact of being visible was something that he could get in trouble for, with his clients, with shareholders, with the board.
So what did we tell him?
First, we told him that he is not alone. In fact, his reaction is absolutely normal. Without question, times are tough and the world is a scary place. The temptation to put our heads down in the midst of the turmoil is not only understandable, it’s psychologically sound: we are just trying to protect ourselves. You see the same tendency in the overall consuming public, who has put all credit cards in the sock drawer until further notice. As another colleague put it, we are in the midst of a “delay of game.” So why not go get a bag of chips and surf a little until the action resumes? Right?
Well, no. It doesn’t really work that way. Inaction, while tempting, is a luxury that most businesses cannot afford. Particularly for financial services institutions, over-communication is a better strategy. So we then had to tell him that he was wrong, and why. Here’s what we said:
- The Trust Thing. The main goal of PR is image/brand management. Image is always important, but never more so than during a downturn, when trust is in short supply. Customers—whether retail investors or very sophisticated institutional investors and consultants—are reassured when they see a continuing stream of information, both the bad and the good. An absence of information is a big red flag.
- It Works. According to the Harvard Business Review, “Brands that increase [marketing] during a recession, when competitors are cutting back, can improve market share and return on investment at a lower cost than during good economic times.” “Marketing Your Way Through a Recession,” March 3, 2008, Harvard Business Publishing.
- It is Cost-effective. See above. In an environment where big-spend activities (advertising, events, sales meetings) are quickly being curtailed, PR is an efficient and effective way to continue to tell the brand story. When you can take original content, and then push it through unpaid channels to get the word out about your business and it products, you position your organization as smart, credible and responsive.
- It’s Good for Your People. In a recession, employees are all looking for confidence, for good news, for hope—for a reason to get out from under the desk. While we want our leaders to be honest and clear about issues the organization faces, we also want to know that we are in good hands and how we can help to make the future bright. That confidence counteracts people’s natural tendency toward fear and inaction. As we told our CEO friend, “Do you want your sales people to hold off meeting with clients because they are waiting to see what happens next?
- There are new channels to explore. Given the unprecedented change underway in the traditional advertising, media, and marketing channels, now is not the time to “wait and see.” Now is the time to get ahead of competitors and dive into social media, partnership marketing, digital offerings, audio/video and other areas. If you spend the next 18 months in a “test and learn” phase, when the downturn is over, you will know where to double down on your marketing spend.
At the end of the day, the risk associated with putting your head out is more than compensated for the reward of market leadership. Assuming that you have a compelling story to tell, now is the time to tell it. In the absence of information, an organization risks looking like it has something to hide. Markets fall, but customers and prospects still need to hear that they can trust your organization, that your institution has financial strength and that you have seasoned, quality professionals at the helm. Give them a reason to believe in your products and services, rather than a reason to flee.
Still not convinced? Two last points to consider:
- If you have spent significant time, money and effort to build a strong reputation over the past decade, you have all of that at stake if you do not maintain it.
- It will cost more, and take more effort to capture the same amount of market share in a rising market than it will now.
AGC and MW
