| Trust or bust: global crisis redefines corporate communications
There are a lot of things we can do to regain someone’s lost trust. We can write a card, send an email, or make a phone call to explain and mend the situation. Regardless of the preferred method, the important thing to do is to communicate, and at the soonest possible time. How and when communication is done will determine if the relationship can be rebuilt and if it can still be sustained.
From a business perspective, one of the worst aspects of the global financial crisis is the erosion of trust across all stakeholders. Consumers now feel strongly against parting with their hard-earned money. Investors want more assurance that they will get their due returns. Management takes a guarded stance against even the simplest transactions, while employees constantly question the resilience of their organization. Faced with this overall meltdown in confidence, companies need to rethink their communication strategies so that they can provide a calming and reassuring voice amidst the turmoil.
Passivity as a pitfall
One of the easiest and yet worst things that an enterprise can do nowadays is to keep mum and pretend that business is as usual. While playing safe and keeping silent may provide a cushion against the crisis, it also suppresses potential and can inadvertently send out the wrong message that the business is, indeed, slowly sinking. Since 2008, there have been companies that have not only weathered the crisis but have managed to thrive as well. The key is to take a more sensible and fresh approach to corporate communications which focuses on the consumer’s pursuit of trustworthiness and value.
PR-fect
Before the subprime controversy developed into a full-blown international crisis, companies were very generous with their marketing spend. They relied on conventional advertising to sustain already strong consumerism, which did not require close and constant interaction with the customer. These days, tighter budgets mean leaner marketing programs using only the most essential tools. It is during such times that the Public Relations (PR) sector particularly emerges as a perfect messaging partner. PR has consistently proven to be an essential and reliable instrument to help companies address chaos, respond to crisis, and even gain from turbulent conditions.
PR’s greatest asset is its ability to build the level of legitimacy and accountability that advertising can’t provide as effectively or as economically. PR allows a business to revive or maintain corporate reputation, which given today’s challenging markets has become crucial to survival. It sets up a transparent line of communications which elicits greater trust, familiarity, and comfort from all stakeholders.
Studies show that 80 per cent of consumers feel that it is still important for brands and companies to allot money for social purposes even amidst a recession. In addition, 68 per cent of consumers say that they would remain loyal to brands that champion good causes, again despite a recession. All these indicate the need to foster strong relationships with stakeholders and invest in social engagement. Among all the marketing devices, PR is the best equipped to meet this need.
Introspection
However, PR is not a total solution and is still subject to close scrutiny as part of the broader corporate communications framework. Despite the appeal of their services, many PR agencies are being contracted on a short-term basis, although we are seeing a rise in the number of PR practitioners. As with other tools, PR works best in harmony with other marketing strategies to optimize the unraveling of the corporate message.
There are several trends that are affecting how we in the marketing and communications business position PR, advertising, and our other key services. We can observe greater reliance on digital technology, which has provided consumers with more proactive means to influence brand status; more emphasis on sustainability and the role of brands in promoting social and environmental responsibility; and a shift to a new model of globalization called world sourcing which is changing the international economic order. These developments require us to ask some hard questions as we figure out what exact strategies to implement for our clients.
Do market surveys still make for reliable forecasts?
Market research has long been the foundation for marketing campaigns. However, it cannot precisely predict the future. While market research may give a fair projection of tomorrow, it won’t tell you accurately about next year and beyond. The financial crisis has shown us that something can happen quickly and can change consumer sentiments in the blink of an eye. It is thus important to learn more about customers and take time to listen closely to their complaints, opinions and suggestions
Should communications be toned down, or boosted?
While the natural impulse given the downturn is to save, communications should not rank too high among downsizing targets. We have to remind our clients that now is precisely the moment for them to clearly communicate how the crisis is impacting their business and how they are dealing with the situation to their respective investors and customers. We also have to convince our clientele that, in an economic slowdown, media are especially interested in sharing unique stories of business survival and success.
Will the current crisis change the corporate marketing paradigm?
It already is. We can see a growing preference for simpler, clearer and more intimate marketing messages. Online marketing and other more interactive approaches are quietly overtaking traditional print and broadcast media. And people are going back to the brands they know and trust.
As mentioned, companies are turning to PR as a cost-effective tool that can be more effective than traditional methods. A PR campaign can be as simple as a company blog, message board or e-newsletter that reaches out to the online audience and updates them on organizational activities. It has become critical to adopt tools such as PR which are capable of absorbing and handling change.
What trends can be expected within the marketing realm in 2010 and beyond?
As we mark the 21st century’s first decade, we can expect people to demand more value and social relevance over luxury. We will also be seeing more consumers relying on the posted experiences of friends and strangers rather than the information from official websites. This will require more attention towards online brand building.
Another important trend is positional marketing, where advertising is created based on consumer activities and profiles. An example would be a special offer relayed via an SMS message as an individual walks by a store. Special targeting of various groups such as older consumers will also be more in vogue. Many marketing departments are overseen by young executives who overlook the spending ability of the older generation and the unique needs of this market, such as more readable marketing collaterals.
These are just some of the things we should take note of as we wage a daily battle against this protracted downturn. The answers are not as simple, and will vary depending on the nature of our clients and the latest developments in a highly volatile global economy.
Come and go
Recessions come and go, the world has been able to survive them and continue with progress. Business opportunities, however, are not as cyclic; once gone, they may never come back. The economic downturn can be a perfect opportunity for organizations to enhance brand awareness and reinforce stakeholder trust and confidence. Businesses must be careful not to set aside reliable and effective marketing tools such as PR and instead tap their full potential to stay afloat during the economic storm and sail smoothly once true recovery flows.
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