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The secret to surviving a recession? Keep your profile high
August 26, 2022
As companies around the world navigate a looming recession – with shrinking budgets and uncertain customer behaviour – there is no doubt that business leaders will begin to look at where they can cut corners and save money. Understandably, many will have no choice but to make cutbacks. But through any crisis, businesses that come out stronger are those that maintain investment in marketing and public relations.
We know consumer confidence is at an all-time low, with the GfK consumer confidence report showing an overall score of -44 (a 3-point drop from July). And with the impending recession adding fuel to the fire that is the cost-of-living crisis, rising inflation, the pandemic, and the war in Ukraine, you can understand this low score. So why would businesses consider cutting communications budgets at a time when communications could be the differentiator between failure and success? Put simply, panic.
Uncertain times can create chaos for businesses as they attempt to chart a course through turbulent waters. They have a fine line to tread between driving revenue to meet their bottom line and keeping stakeholders happy. Decision-makers must make cuts somewhere, right? But brands must grit their teeth, dig in their heels, and keep their communications flowing.
PR is an exceptionally effective way of keeping your messaging in the public domain, and letting your customers know that you are in it with them and for the long haul. And arguably, earned media is one of the greatest ways to shift consumer behaviour in your favour. The endorsement and messaging that PR creates resonates with audiences long after the crisis has passed. In a chaotic communications environment, it makes good business sense to have someone in your corner advancing your story to your key customers.
And the data backs this up. Research conducted by Analytic Partners found that 60% of brands that increased their media investment during the last recession saw ROI improvements, and even growth in sales.
Why? Because customers trust brands that are front of mind – and that doesn’t stop in a recession. Send the right message to your customer and you can become a key voice, gain prominence in your industry, create brand loyalty, brand equity, and build market share – especially if your competitors have cut back.
Take Hyundai for example. In the 2008 recession (a brutal year for the auto business), Hyundai Motor’s global sales rose 2%. How? It listened to the needs of its consumers, and it delivered its comms plan accordingly. During a time when its customers were dealing with a collapse in the housing market and fears of unemployment, Hyundai grabbed the attention of its market by offering to take back a car that was financed or leased by a worker who had subsequently lost their job. What this did was send a clear message that Hyundai empathised with its customers and was willing to use its power to make a real difference to their lives. Both humanising the brand, and levelling with its customers.
Now look at E.ON and the recent backlash it endured because of its ill-timed and ill thought-through initiative offering socks to its customers as part of its scheme to help reduce their carbon footprint. Timed with energy price rise, this campaign was slammed for being tone deaf and insulting.
PR communications during a crisis such as a recession don’t have to be ground-breaking to have an impact. Great PR helps you humanise your brand, empathise with your customers, focus on the essentials and build connections through emotional storytelling.