Recessions and economic downturns can create a wide variety of issues for companies. For example, sales can drop, budget cuts might have to be made, company stock prices can drop, etc. But, despite the many problems that they cause, recessions are inevitable. They happen roughly once every six years, and so it is far better to be prepared to deal with them before they occur.
One of the best things that companies can do to prosper during economic downturns is to make sure that they have excellent PR. Here are three reasons why PR is crucial for businesses when the economy is down.
It Helps You To Preserve Trust
Customers, clients, vendors, and suppliers all tend to be cautious and more hesitant during economic downturns. Any loss of trust can put extra stress on a company, which is the last thing you want during a recession. PR can help to keep trust in your company high during these difficult periods. PR firms can help to provide the necessary reassurance to your audience while maintaining positive messaging and a strong presence.
Some companies make the mistake of neglecting PR during downturns, but this can make it seem like you are avoiding something or running away from an issue. For example, during a recession in the early 1990s, McDonald’s scaled back its marketing and PR activities and its sales fell by 28% as a result. Good PR keeps customers informed and reassured, helping to maintain trust until the market recovers.
It Helps to Minimize Damage
Even if your company has a strong business model and has strong sales leading into a recession, an economic downturn can still have unexpected negative consequences. Most businesses experience at least a few significant problems during recessions.
Good PR can help your company to get out ahead of any rumors or bad press about your company and minimize any damage. If there are any actual crises, it is absolutely critical to have your PR on point in order to make sure that you can fight back against any harmful narratives being created against your company.
It Helps Your Company to Successfully Pivot If Necessary
Recessions often cause companies to have to make dramatic changes suddenly. This can be changes in products, services, marketing messaging, operations, etc. The COVID-19 pandemic is a perfect example of this. During the COVID pandemic, many companies were forced to switch large portions of their operations to digital. In fact, 63% of business leaders state that the COVID-19 pandemic prompted them to embrace digital transformation sooner than they planned.
Having good PR in place helps to communicate the changes to your customers so that they clearly understand what changes are being made, why they are being made, and how they can adjust to them. PR reduces friction in these circumstances and helps to ensure smooth transitions.
The Bottom Line
PR is an incredibly beneficial tool for helping businesses to navigate economic downturns. In fact, having good PR is one of the best things that you can do to hedge against the negative effects of recessions.
So, if your PR is sub-par right now, consider bolstering it to make your company more recession-resistant.