Unless you have been living on the moon recently, you will be aware that America is inching ever closer towards a full blown recession. Climbing unemployment rates, a slumping housing market and high energy prices are all dealing a painful blow to the American economy.
It comes as no great surprise then that talk of an economic slowdown in New Zealand is a red hot topic on our blogs and in our newspapers and is keeping our business owners awake at night.
Undoubtedly, many a Kiwi business owner will already be thinking about how to ride out a recession, if one does indeed reach our shores. It is also highly likely that many a Kiwi business owner will be contemplating putting a big thick red line through their public relations, advertising and marketing budgets...
Unfortunately, this reaction, rather than saving valuable dollars, could prove to be a catastrophic mistake. Many companies have kicked the bucket during past recessions, as a result of shying away from tools such as PR and consequently dropping off the radar of the media, their shareholders, their customers and their potential customers.
Rather than slim-lining communications efforts, isn’t this now the time to start beefing them up? Now, more than at any other time, shouldn't businesses be concentrating on maintaining the trust of their investors and customers by regularly communicating with them and letting them know how the company is dealing with the situation? Harvard Business School professor, John Quelch, certainly believes so. This is what he had to say in a recent article:
'It is well documented that brands that increase advertising (and other marketing tools) during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times. Uncertain consumers need the reassurance of known brands'
Recessions are a natural part of the economic cycle. The markets, the consumers and the products will still be around once the economy has corrected itself. In my opionion, business owners should try not to react by cutting out the tools that could help keep their head above water. My advice to people thinking of slashing their PR budgets is simple- make good friends with a talented PR professional and keep the lines of communication open with key audiences. Maybe then your company will still be in the picture when the storm is over.
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