There has never been a better time to spend: the benefits of investing in PR during an economic downturn
Thursday, November 24, 2022
It may sound counterintuitive as some key economies face a period of recession and economic downturn, but there has never been a better time to spend.
However, this is not a plea for profligacy because of course a bit of belt-tightening is inevitable. But when it comes to business marketing and public relations, now is a time when real value can be generated from investing in well-considered, targeted external communications.
Research demonstrates the long-term benefits of investment in PR
A multitude of research papers across the decades have shown that those who invest in communications during a period of recession derive significant benefit.
For example, a research study by McGraw-Hill of the 1982 recession found that those who maintained or increased their marketing budget grew significantly both during the recession and the following three years. In fact, by 1985, companies that had invested significantly during the period of recession had grown 275 percent over those that had not.
More recently, according to the Institute of Chartered Accountants in England and Wales (ICAEW), those companies and organisations that maintained their advertising expenditure during the 2008 recession had 3.5 times more brand visibility.
It is worth noting that good external communications not only enhance an organisation’s reputation with its customer base, they also have a calming effect on stakeholders. That is because they demonstrate confidence and a dynamic approach to managing the vagaries of the economic downturn.
What should your strategy be?
- Public relations
Although PR is just one element of the marketing mix, it is particularly valuable during a recession. It is one of the most cost-effective ways of keeping your brand visible and a third-party endorsement (from the media for example) brings authenticity and directly enhances a feeling of trust.
This is particularly important during a period when there may be the necessity for rapid changes as your business pivots to a new operating reality. PR helps to convey to your stakeholders and customers, both current and potential, that you are not panicking. Instead, you are going on the offensive, are confident in your business’ future and invite them to share in that.
In addition, if your competitors are cutting back on their PR budgets there will be increased opportunities for those who opt to invest. In this way your spending will have enhanced leverage.
- Integrated marketing campaigns
PR does not work in isolation. It is a vital part of an integrated marketing strategy which demonstrates to the world that you are not just surviving but embracing the storm. An integrated campaign blends your key messages across a range of mediums, including digital marketing, internal and external communications as well as crisis communications.
However, it is not just about pushing out messaging which tells people what you want to say. You need to be sure you are sharing messages that they actually want to hear.
- Demonstrate empathy and lead with emotion
To keep your audiences engaged during difficult times you need to demonstrate empathy. To do this, you must truly understand their concerns and immediate needs. These may now be very different from the ones you identified six months ago.
You can do this in a number of ways but one quick and cost-effective strategy is to monitor your social media platforms and take on board all feedback. This will guide you as to the specific worries and revised needs of your customers so you can tailor your approach to address them.
The 2015 Harvard Business Review research report found that the most effective way to enhance the value of customer relationships is to connect with them on an emotional level. So, once you understand their most pressing needs, you can use storytelling and emotion-led campaigns to build a positive feeling about your brand which will last long after the crisis has abated. This is a great opportunity to get creative.
Looking to the future
PR alone cannot fix a slump, but, as part of an integrated campaign, it can insulate your organisation from the reputational impact of one. Moreover, investing in effective communication during a period of recession will deliver dividends by establishing the essential foundations upon which to build when the economy takes off again.
Because history shows us that recessions do not last forever. One day, there will be an upturn. It is therefore the job of business leaders to not only safeguard their business during times of difficulty but to plan for that recovery.
If you have any questions about planning your strategic communications for 2023, please contact our team by emailing [email protected].