By Dean Jones, Account Coordinator, with data research by Kai Heslop, Jr. Account Executive
Stock market volatility, growing inflation, the ongoing conflict in the Ukraine, the continuing emergence of COVID-19 variants, and daily sticker shock at the gas pump have all contributed to macroeconomic conditions that have many businesses re-prioritizing where to focus their energy and budgets. In recent months, many tech startups have also had investors leaning on them to cut burn rate and increase their cash runway.
Where to trim, though? That’s the million-dollar question. It won’t surprise you to learn that we advise against making budget cuts to public relations (PR). On the surface, that’s a self-serving notion, but it’s founded on sound principles. In our view, now is an important time for an organization to look to and even ramp up their PR efforts.
Tough times often make companies go quiet in their communications efforts, either because they’re narrowly focused on shoring up their business operations or as a result of budget cuts to marketing. However, when others are going quiet or lowering their voices, that’s the perfect time to ramp up your PR to reach your core audiences.
Publicity is a key driver of interest in a business or brand, and when your PR budget gets trimmed, it opens the door for competitors to secure a larger share of voice in your industry. In other words, the smart money is being spent on getting louder when others are cutting back. So, when the markets right themselves as they eventually will and invariably do, while those who went quiet scramble to re-establish relationships with key media, analysts and bloggers, those brands who kept communicating will invariably win the lion’s share of voice.
A famous McGraw Hill study looked at the behavior and performance of 600 companies from 1980 and through the 1981 recession and beyond. According to an article in The New York Times, the study concluded that by 1985, three years after the recession, firms that continued to advertise during the recession saw sales increase by 275% from 1980, while those that had pulled back were up only 19%. “But this isn’t the 1980s...” No, it’s not, but that’s the last time we saw comparable interest rates, so the comparison holds. “And the study wasn’t about PR, it was about B2B advertising…” Indeed, but the fundamentals for maintaining and increasing awareness hold true whether the tool is advertising or PR.
Stories are the soul of a company’s reputation and regardless of market conditions, businesses should remain intentional about the messages they put out. With so many organizations refocusing and even pivoting in these conditions, communicating these changes precisely, clearly and positively to key stakeholders, and in such a way that it protects and even elevates an organization’s reputation, is a task for PR.
To summarize then, ramping up PR in uncertain times is a surefire way to continue to be seen and heard by your stakeholders. A great PR firm will seize upon and also create opportunities to insert clients into relevant conversations – building thought leadership, increasing brand recognition and growing your share of voice.
In their Aug. 14, 2020 article “Don’t Cut Your Marketing Budget in a Recession,” in Harvard Business Review, professors Nirmalya Kumar and Koen Pauwels concluded: “Marketing in a recession will never be easy, largely because it often involves going against instincts and standard operating norms. Customers’ behavior undergoes profound changes – reflecting changes in their circumstances and needs, which may even be traumatic. In this environment you must accompany your customers on their new, different journey, shifting your message and even re-engineering your value proposition. This is a time not to stop spending money but a time to change how you spend it. It is also an opportunity, because firms who are willing to be what customers need in a recession get to keep many of the new customers they get — and cement the loyalty of those they already had.”
When the noise starts back up again, will yours be the known and trusted voice, or will you be shouting twice as loud to be heard?
About the author:
Dean Jones, Account Coordinator, Austin, TX, comes from a communications background in politics ranging from government to working with political consultants. Prior to Waters, Dean was a partnership development manager at a wellness tech company. Dean lives for building meaningful, long-lasting relationships with people and crafting stories that leave an impression.