The macroeconomic picture has become increasingly cloudy over the past several months as key economic indicators point to a significant economic upheaval and recession fears mount. Inflation hit a fresh four-decade high in May, rising at an 8.6 percent annual rate. Oil and gas commodity prices continue to dip sharply. The IPO market has ground to a near halt, with more than 300 companies waiting to launch a new issue. And the crypto and tech sector sell-offs are eliciting memories of the dot-com crash.
Given this economic backdrop, financial brands may feel a natural inclination to pull back on proactive communications—whether due to weaker financial/portfolio valuations, the loss of a key piece of business or overall uncertainty in the market with no clear end in sight—and adopt a more cautious, wait-and-see approach to communications as events unfold.
That’s the wrong inclination for several reasons, the most important being that your stakeholders still want to hear from you. Whether investors, business partners, customers or employees, it’s important to keep your key audiences informed during times of uncertainty. No one expects you to have a crystal ball or predict what will happen tomorrow, but they will continue to look to you for perspective. In addition to providing unique insights, economic uncertainty presents an opportunity to reaffirm your company’s long-term vision, underscore your core values and strategy and communicate how they will guide your organization through uncertain times.
Putting your head in the sand and not communicating during uncertain times, on the other hand, could be interpreted as a sign that your organization is struggling or has not prepared a plan to deal with business challenges. For investors and advisors, silence might also indicate that you’re as lost as your clients on how to react, just when they need you most. Not communicating can result in a variety of other negative outcomes, including creating a perceived lack of transparency, providing negative fodder for the rumor mill, allowing it to run rampant with speculation or misinformation or exacerbating uncertainty.
Moreover, your competitors are likely to be talking even if you’re not. If you fail to communicate, your competitors will fill the void, potentially luring new business and seizing the thought leadership high ground. They will be seen as thoughtful, informed advisors and partners worthy of trust when the dust clears.
So, what should financial brands keep in mind when deciding how to communicate in this uncertain environment? The right approach will depend on many factors, including past practices, the firm personality, resources, and business strategy, but there are some general principles that can guide your response:
Establish a steady communication cadence. Ensure your communication is consistent in tone and cadence. When communication is sporadic, it’s often less successful. Set a regular communication schedule—and stick to it—so people know they can count on you to provide reliable updates.
Convey strength from experience. It’s important to emphasize how you’ve successfully navigated uncertain times in the past. This can be done by sharing stories, examples and anecdotes of successes or accomplishments arising from previous economic cycles or financial downturns.
There’s no substitute for direct communication. Whether you’re delivering your message to stakeholders via email communication, memo/letter, teleconference or in an in-person setting, direct communication provides many benefits. It allows you to convey a clear message, lowers the possibility of misunderstanding or confusion, and increases the level of trust and transparency.
Talk less about yourself. Bankers and private investment firms can be reluctant to engage with the media when the market or recent fund performance is down. However, both are well-positioned to provide commentary on the broader investment environment and key trends affecting the economic landscape, showcasing their organizations as knowledgeable experts.
Choose the right medium. Communicators have a greater choice of media than ever. The challenge is to match the medium with the right content. For example, a deep macroeconomic analysis probably isn’t appropriate for social channels. By being selective about where your content appears and in what form, you can deploy a nuanced communications program that connects with a variety of audiences.
Overcommunicate with employees. Employees are your organization’s most valuable asset. It’s crucial to communicate early on and often to effectively address any concerns they have about the financial strength of the business and their long-term job security. Uncertainty can also be an opportunity to lean into celebrating the company’s successes or milestones. If you win a new client or launch a new service offering, consider promoting it internally and recognizing the team members who played a key role.
What not to do
While advocating a bias toward action, it would be wrong to suggest that active communication during a downturn doesn’t come with its own set of pitfalls. Organizations still need to be strategic and thoughtful in determining what’s communicated and when. Here are three things you shouldn’t be doing:
Make empty statements. During challenging times, there’s a natural inclination to reassure and provide comfort, and you should respect this. But avoid using blanket statements such as “everything is fine” that lack specifics and rarely instill confidence.
Overcomplicate the message. Even if you’re an economic expert, a deep dive into the intricacies of capital markets and the financial policy that creates volatility is probably not the best option. Use that knowledge strategically and selectively. Homing in one key takeaway for your audience will serve you better than getting deep into the weeds.
Suffer from paralysis by analysis. It’s understandable to take time to consider your communications options, but you may find yourself mired in possibilities and stalled by indecision. Remember, during uncertain times, your key audiences want to hear from you in a timely and transparent manner. You may not have all the answers, and it’s often better to say less than wait for a perfect solution that may never come.
Whether the economy ultimately falls into a recession later in 2022 or further down the line, the ramifications of a downturn will likely remain a key concern for your investors, business partners, customers and employees for the foreseeable future. Using proactive, strategic communications will alleviate concerns for your key audiences and help them better understand how your organization can weather and succeed in a challenging business environment.
By: Scott Lessne, Senior Vice President
Version of this post originally appeared in O’Dwyer’s Public Relations News.