How to Handle Communications During a Financial Crisis?

A financial crisis in business can arise from internal or external factors. Failure to meet monthly quotas and poor cash flow management are examples of internal factors, while a weakened economy due to the pandemic is an example of an external factor. Whatever the cause, financial crises are almost always a heavy burden on companies. Here are some tips for dealing with communications inside and outside the company to curb the effects of financial crises.

Contact your team during an economic crisis

When faced with a financial crisis or any other type of crisis, you must communicate clearly and often with your employees. Management consulting firm McKinsey & Company highlights the role of employers as a reliable source of information, especially if local and national leaders are less reliable than desired. The last thing you want is confusion, misunderstanding, and the spread of rumors, which can make a bad situation worse.

Provide ample opportunities to dispel misinformation, communicate your plans for the business (i.e how you plan to weather the storm), and clarify your employees’ role in weathering the crisis. Think about town hall meetings that you can apply to your business. It’s also an opportunity for your employees to provide their feedback and ideas to help you move forward. Let your employees know how much more you can do while building their confidence. Be realistic but optimistic in explaining how you plan to respond to the crisis.

Public Relations in a Time of Financial Crisis

Business journals cite various studies that confirm that pausing your company’s PR strategies during an economic downturn is a bad business move. Companies that maintain their PR and marketing strategies have been able to increase their sales even during recessions. After the recession ended, they were in a better position to profit from the markets as their continued efforts gained a larger share of voice over their competitors.

It is important to note that many of the studies cited are based on data from the Great Recession, the most widespread financial crisis in recent history before the current COVID-19 pandemic. Financial firm Marcus of Goldman Sachs defines a recession as a period in which economic activity significantly slows down over several months, often leading to unemployment, stock market losses, and disruptions to the business sector. Despite such interruptions, your business should continue with its PR strategies, as this will increase its chances of survival during the crisis.

Increase your online visibility and release announcements about how you plan to weather the financial crisis. Blog and broadcast success stories if this is something you or your clients have experienced in the past. Consider sending newsletters that go directly to your clients’ and customers’ inboxes for a more intimate strategy. Of course, it’s also worth financing skilled PR services from a reputable firm. They can coach you on how to communicate and protect your reputation with your stakeholders and customers even during the worst parts of a financial crisis.

While pursuing PR strategies, be aware of public sentiment. Keep a close eye on your social media, especially Twitter. The micro-blogging site is full of trolls who drive away business. The same is true for other social media sites, but not to the same extent. By keeping tabs on how your company is perceived in the market, you can decide whether to focus on damage control or maintaining a relationship with your client base.

During a widespread economic downturn, businesses are not the only ones to suffer the consequences. Thousands of people also struggle with the psychological stress of financial problems. PR Daily shares that influencing emotion can increase response rate and engagement among one’s client base. And building a relationship with your clients is crucial in improving the company’s public image.

PR campaigns should focus on providing a shining light in such dire situations and empathizing with your audience. Comforting or reassuring messages help build an emotional connection between a company and its clients while demonstrating empathy.

Effective communication becomes essential during a financial crisis. To increase a company’s chances of survival through any economic downturn, both the internal operations and the public image of the company must be under control. And this is done through effective communication at all levels.