Why Cutting PR & Communications Budget during tough times is a Bad Idea
First things first. I am as much an entrepreneur and business owner like most of you are or would be. And as much a business leader as many of you are or would be. And like most of you, am relooking at the business plan, contingency measures and steps to rationalize costs, etc. to sail through current crisis, unprecedented in its nature and scale. Being a true PR/communication professional, anything that I say and do will be not just one sided but factoring in multiple perspectives. And last my idea or definition of PR is not at all just media relations in the traditional sense. Establishing this credibility and clarity is key because I would seriously urge you to pay attention to and atleast give some consideration to few points shared below on how investing in PR/communication during a period like this is important.
TL;DR - Here are 5 simple and important reasons why you should re-consider slashing or ceasing your PR and communication budgets during Crisis
- Business visibility/differentiation is even more important (consumers only reduce not stop buying altogether)
- Conserving cash is absolutely the top priority so are customers
- You can do more with less.
- Being there builds trust and goodwill
- Leaves you much better placed for the high that follows than others who don’t invest
Yes consumers become conservative and become prudent in their spending. The twice a week outing to a high end dining place becomes one. That Zara skirt that she has been eyeing gets pushed by a few months but the shopping trips to Bandra or Commercial Street or Lajpat nagar market does not stop. Considering PR is relatively less expensive than ATL, you are still visible to these consumers who have not stopped buying but only have become prudent about it. By smartly communicating about your differentiators and your value offerings, you still have a chance to garner more consumers.
To give an analogy, let’s assume revenues are like blood for our body. Let’s assume you cannot stop bleeding (revenue losses are imminent in situations like these), nothing else helps you but continuous blood infusion. You need to keep the focus on acquiring new consumers or customers as existing ones leave. And visibility definitely helps.
Great you cut the budgets or stopped communicating altogether. Yes some cash got conserved. Let me tell you considering PR investments as a function of revenues or profits or overall marketing budgets is a miniscule percentage, the net savings won’t be much. But look at what you are losing by stopping to engage and communicate. Here are consumers/customers choosing to still buy your brand in a dire economic phase and all you do in return is not engage or communicate with them. You are saying times are bad, I need to conserve cash so communicating and engaging you is not a priority. Think again? Also, what if they stop patronizing you because they don’t see or hear about you at all for some time (out of sight, out of mind). Particularly when PR fees don’t pinch your balance sheets much at all.
Campaigns you wouldn’t consider during good times do become feasible as everyone understands the times are bad and become flexible/more open. If you have the right PR partner (at PRHUB we sent a custom, detailed mail personally from the top management to all our clients outlining how we can be of help specifically in this period last week itself), they are going to engage you and see how they can push themselves.
Influencer costs will come down, digital properties/channels become more open to partnerships, etc. Even if your PR/communication budgets are tight what you can get out of it significantly increases in this period. Why let go?
There are numerous peers and competitors of yours who will stop communicating in this period. Just imagine what happens to consumers and customers who see and hear about you. Wont they see you or your brand as a reliable and thus comforting choice in trying times. What if you were smart and communicated messages tinted with empathy triggering a deep emotional connection with the brand? Don’t you think that will lead to more customers build goodwill and trust in your business or brand.
The news that Taj hotels supplies food free of cost to government hospital doctors in Mumbai has gone viral and the goodwill that it creates (or created) is just irreplaceable. Just remember hospitality is among the most impacted industries in the current scenario.
Ok you stretched that last ounce of budget left for PR and communication and utilized it smartly. You communicated and engaged your customers when most of your peers and competitors did not. You pushed and squeezed higher value for the investment made. Imagine when the tide turns and the economy starts to pick-up pace, who is going to be better placed to quickly scale since they have enough consumers who have seen, heard and trust them. The answer is a no-brainer. And what did you stretch in the tough times to get this vital competitive edge, very little.
If you noticed, have not said conserving cash is not to be done. Am simply asking for prudence in the way it is conserved in not just the short term but medium to long term interests of the business. By all means focus on surviving a tough period like this. But don’t forget to prepare for the light at the end of the tunnel. And to engage consumers who trusted you at times like these.