Making your communication strategy recession-proof
Over the past few months we’ve been inundated with numerous warnings of an impending recession. Will it happen in Canada? Recent data here seems to have thrown observers for a loop.
While appearing before the Senate Committee on banking, commerce and the economy, in October, former Bank of Canada and Bank of England governor Mark Carney said Canada will likely head into recession in 2023. However in a November webinar with business leaders, Pierre Cléroux, chief economist at the Business Development Bank of Canada said he did not expect a recession in Canada in 2023, just a slowdown in economic growth.
Either way, high borrowing costs are prompting businesses to tighten their spending and look at ways to cut operating costs.
It has been said that advertising, marketing and public relations budgets tend to be the first ones to take a hit during tough times. However, this is not really true anymore. History has shown that communicating with your clients, employees and other stakeholders is even more important during a recession.
“Companies that cut their marketing budgets due to recession not only make it harder to retain customers, but also to bring back new and existing customers once economic growth returns,” said Jane Hales, managing partner at Sapio Research, a UK-based market research agency. “They also leave themselves more vulnerable in the event of a PR crisis that puts the organization at risk, something that 41 percent of U.S. organizations experienced post-COVID-19. It would be a shame if they chose to forgo the lessons learned during the pandemic and put themselves at risk again.”
Downturns do create uncertainty for brands as they attempt to chart a course through troubled waters. In preparing for a slowdown, corporations will need to:
- Strengthen their stakeholders relationships, including clients, partners and employees
- Revisit their corporate narrative (make sure they are saying the right message to the right audiences)
- Sharpen their brand proposition
PR is an incredible asset to an organization’s reputation management process. In a chaotic communications environment, it makes good business sense to have someone in your corner who is advancing your message with key stakeholders.
“Few macro trends produce anxiety and concern like an economic pullback,” says Andrew Graham, former head of the New York chapter of the Public Relations Society of America. “External and internal communications, as practiced best, can have a calming effect on stakeholders that are anxious and concerned.”
Keeping customers and employees engaged will bring your company strong social capital, which is a key component of a good performance in Environnemental, social and governance (ESG) factors. Companies who invest in an ESG strategy and initiatives are more attractive to their stakeholders and will become even more relevant during difficult times. Stronger brand reputation, greater interaction, trust and loyalty are among the lasting benefits.
A likely recession might slow some of the high turnover of employees, but a recent study published by the US Conference Board, shows that nearly a third of employees have become less engaged with their work since the pandemic. Whether or not lay-offs occur in the next year, corporations will need to reassure and energize their employees.
It must also be said that, compared to advertising, PR is more cost effective. It will last far longer than a pullback and give your company more bang for its buck. It’s the best way to let people know that you’re not only surviving, but thriving. With PR, you can create optimistic and informative content about what’s going on with your business.
Keeping stakeholders updated on all that your company is up to will make you stay top-of-mind. A sustainable brand does not hide when the going gets tough.
But as corporations aim to make the best of their assets, it will be more important than ever to prove the impact of any campaign on the bottom line. That’s done with analytics and measurement. The performance of any campaign must be measured to prove that it contributed to the achievement of your goals..
When looking at 2023 and the potentially difficult months ahead, are you solidly prepared? Do you have a strategy in place that will help you to strengthen your company’s relationships with its most important stakeholders?
– Suzanne Dansereau, Chief of Staff and Senior Advisor