How to recession-proof your PR business
After a prolonged period of growth, this week the stock market experienced one of its first rocky periods in a couple of years. The general opinion seems to be that it was a temporary blip—but there are those who see this as a much-needed correction of an over-inflated market, and still others who think this points to some warning signs beneath the surface. Whatever the eventual outcome, this seems like a good time to reassess long-term business strategy in the event of an economic downturn.
I have worked in the PR business for over 20 years, and in that time, I have witnessed plenty of economic highs and lows. I have seen fellow PR professionals lose their jobs during periods of recession and witnessed once-prosperous agencies shut down as a result of economic downturns. The financial crash of 2008 was a particularly tough time for our industry.
During that time, I learned some valuable lessons on how to operate a nimble PR business regardless of the economic climate. I also learned the importance of adapting quickly when fortunes change. The good times don’t last forever, and another downturn is always around the corner. No matter how well your business is doing today, it is imperative to plan ahead.
These are my top tips for not just surviving an economic downturn, but thriving in one:
Results matter: PR has been described as an art, something that can be difficult to quantify in terms of value. I don’t agree. In PR, measurable results matter, regardless of whether your client has an endless budget or every penny counts. A good PR professional will always focus on the fundamentals. Why did your client seek PR in the first place? Was it to build their profile against competitors, drive sales, become acquired, secure funding? When creating that first PR plan, quantify your success so it is tied to the company’s bottom line and their business strategy. Did a piece of coverage generated drive increased web and social traffic that converted to a qualified opportunity? Did a briefing with an analyst result in potential acquisition interest? When you consistently demonstrate the value of PR as fundamental to growth and business objectives, your clients are much less likely to cut budget when a downturn happens. And when times are tough, demonstrating value is even more important.
Rethink your messaging: The story your client tells in times of prosperity isn’t necessarily going to be the same story it tells during a downturn. During periods of recession, it is vital to reevaluate the needs of your clients’ customers. Messages focused on cutting-edge innovation may resonate less than stories about saving costs and providing more value for the money. It is the PR team’s job to keep a finger on the proverbial pulse and guide their clients accordingly. When there is a shift in the economy, PR professionals can demonstrate their value to clients by helping them navigate the changing climate, ensuring the right messages reach the right audiences with the right tone.
Adapt your model of service: Sometimes clients fall on hard times, sales decline and cash flow becomes an issue. One strategy I have deployed with clients in these situations is to recognize the challenges they are facing and offer an alternative staffing model. For example, when a client is struggling to pay their monthly retainer, determine what is feasible in their current budget and adapt accordingly. Perhaps you will agree to put in place a dedicated PR consultant – instead of a team – who can provide cost-effective PR continuity. Alternatively, if a client predicts their cash flow challenges are temporary, put a revised payment plan in place or opt to work on a project-by-project basis to ensure the fundamentals stay covered. In my experience, a PR agency that demonstrates good faith and a willingness to adapt during periods of change will retain more clients in the long term. Recessions don’t last forever, and when business is booming, that show of good faith is usually rewarded.
To be clear, no one is declaring a recession right now – quite the opposite, in fact, despite the market jitters of the past few days. But I am always struck by the surprise and nervousness these fluctuations provoke. We are living in one of longest periods of economic prosperity we’ve ever had, and history tells us a reset is inevitable at some point. Having a plan in place to future-proof your PR business is just common sense.