How to Handle Communications During a Financial Crisis
A financial crisis in the business can stem from either internal or external factors. Failing to reach a monthly quota and poor cash flow management are examples of internal factors, while a weakened economy due to a pandemic is an example of an external factor. Whatever the cause, financial crises are almost always a heavy burden on companies. Here are some tips on dealing with communications both inside and outside the company to stifle to effects of financial crises.
Communication with Your Team During a Financial Crisis
When faced with a financial crisis, or any other type of crisis for that matter, it’s vital that you communicate with your employees clearly and frequently. The management consulting firm Mckinsey & Company highlights the role of employers as a trusted source of information, especially if local and national leaders are less reliable than desired. The last thing you want is to spread confusion, misunderstanding, and rumors — these can only make a bad situation worse.
Provide ample opportunities to dispel false news, convey your plans for the business (i.e. how you plan on weathering the storm), and clarify your employees’ role in conquering the crisis. Think of town hall meetings, which you can apply to your business. This is also the chance for your employees to provide their feedback and ideas to help you move forward. Disclose however much you can to your employees while also providing them a boost in confidence. Be realistic but optimistic, outlining how you plan on responding to the crisis.
Public Relations During a Financial Crisis
Business Journals cites various studies concluding that pausing your company’s PR strategies during an economic downturn is a bad business move. Companies that maintained their PR and marketing strategies were able to boost their sales even during a recession. They’re in a better position to profit off of the markets once the recession is over, given that their continuous efforts gained them access to a larger share of voice over their competitors’.
It is important to note that many of the studies cited are based on data from the Great Recession, the worst widespread financial crisis in recent history, preceding the current COVID-19 pandemic. The financial firm Marcus of Goldman Sachs defines a recession as a period wherein economic activity slows down significantly over several months— often leading to a spike in unemployment, stock market losses, and of course, disruptions to the business sector. Despite such disruptions, your business must stay on course with its PR strategies as it increases the chances of its survival through the crisis.
Increase your online visibility and release statements on how you plan on combatting a financial crisis. Blog and publish success stories if this is something you or your clients have experienced in the past. Consider sending newsletters that go straight to your clients’ and customers’ inboxes for a more intimate tactic. Of course, it’s also worth investing in professional PR services from a reputable firm. They can coach you on how to communicate — and maintain your reputation — to your stakeholders and customers— even through the worst parts of a financial crisis.
While following through with PR strategies, be aware of public sentiment. Keep a close eye on your social media platforms, especially Twitter. The micro-blogging site is filled with trolls that can drive away business. The same goes for other social media sites, but not to the same degree. By keeping tabs on how your company appears in the market, you can decide whether to focus on damage control or continue building rapport with your client base.
During a widespread economic downturn, it isn’t just businesses that suffer the consequences. Thousands of individuals also struggle from the mental strain of financial problems. PR Daily shares that leveraging emotion increases response rate and engagement in one’s client base. And building a relationship with your clients is crucial in improving the company’s public image. PR campaigns should focus on providing a shining light in such a dire situation and extending empathy to your audience. Comforting or reassuring messages help build the emotional connection between the company and its clients while also demonstrating empathy.
Effective communication becomes a necessity during a financial crisis. To increase the company’s chances of survival through any form of economic downturn, both the internal operations and the company’s public image need to be under control. And this is done through effective communication on all levels.