Cost cutting is the primary concern of CMO’s during a downturn. They naturally begin with the frills while gradually working their way into more substantial overheads. While events, training programmes and travel are the low hanging fruit in cost cutting, advertising and PR are bound to follow suit in a bearish economy. We are probably facing one right now, where startups are beginning to see funds dry up in the market. Several prospective unicorn brands that I have been associated with in recent months, were forced to pull back on expenses.
However in this dreary environment, the question remains as to what elements should face the axe while ensuring that the equity of the brand is not impacted in the long run. This article analyses the importance of PR for startups and its importance during a down turn.
Startups and PR
It is no secret that the media is a bug support for startups and this phenomena in general. What this means is that large sections of valuable media real estate is being dedicated to this sector. One can see how unicorns like Flipkart, Amazon and Snapdeal have built their brands predominantly through good PR. One is reminded of the dotcom boom back in the late 90’s when there was a similar frenzy in the media to feature anything that is home grown (Remember Microland and the visibility it enjoyed then). However this boom faced a natural death soon to be taken over by the IT and ITES phenomena for the next decade or so.
Going through these seasonal tectonic shifts in the media and their love for sunshine sectors, it is now the era of startups. It is now their turn to bask in the sunshine and take advantage of the momentum.
On facing a downturn
Point to note is that there is no guarantee that time and money will be saved in the long run only because you cut costs impulsively. Considering the euphoria for startups in the media it would be foolish to sacrifice the goose that is laying the golden egg.
It is widely acknowledged that PR is all about credibility and careful messaging. The resultant coverage is an outcome of a planned media outreach that has been whetted by layers of company spokespersons and management and the editorial team in the media. This goes to prove that this is a strategic tool that is a result of collaborative efforts by the company and the media in tandem. The results of well-planned campaigns are manifold and immensely beneficial for a brand in the long run.
Related Article: How Can Startups Handle Layoffs Effectively?
The one line advice for startups during such situations is to stop being Reactive and become Proactive. Clichéd as it may sound this is the time to pull your socks and to ‘Think out of the box’.
PR should ideally be the last element in your marketing budget that should face a cut. Realistically speaking, PR is the only liaison between your company and the media. Imagine if you were to abruptly discontinue engaging with the media. Imagine the impact it will have on the journalists who you have nurtured over a period of time. They are bound to begin speculating and suspect that all is not well with your business and hence the sudden silence.
Clearly when the economy does pick up, which eventually it will, you will be ahead of the game from your competitors from the word go, especially those who pulled out of PR because “it just made financial sense”. And when that time comes, as your competition works extra hard to play catch up, your consistent public relations efforts will pay dividends and you will reaping in the benefits.
As the saying goes, “It’s not how much you make, but how you spend it.” This statement profound as it is, clearly elucidates the importance of using strategic and cost effective marketing tools such as PR.
Why PR is a crucial medium to keep the brand ticking in the eyes of the publics.
- It works to establish relationships with all your publics, especially with the media and the community
- Messages in PR reflect the DNA of the brand and what it symbolizes
- This medium is all about connecting with and building powerful influencers for your brand
- It sustains word of mouth which is crucial for any brand building exercise
- It scores high on the much needed credibility for a brand
- PR generates awareness and encourages conversation as a result in various platforms including social media
- PR puts brain power to work; you don’t have to spend a fortune to make a campaign successful
PR and cost benefit analysis
It is well know that PR is probably the most cost effective medium that a startup can adopt today. It is almost equivalent in money terms to paying a senior executive their monthly salary while getting the benefits and the services of an entire agency and a national footprint at that in return. If that is not value for money what is?
The return as outlined before are paramount where it delivers on multiple fronts contributing to the overall image and the growth of the brand.
Naturally, one needs to be realistic. Simply because public relations is a worthwhile marketing tool during a downturn, does not mean you should not make the necessary adjustments to reflect your realistic financial situation. Only you are bound to know your financial health and how far your dollar can be stretched.
Hence developing a customized marketing plan keeping PR in the marketing mix is penultimate to the success of any enduring brand. One could look at marginally scaling down on the PR costs for a scaled down version of the activities in turn. Hence it is advisable to maintain your PR outreach even during a sluggish economy, however scale it down if necessary to suit your budget and the relative marketing plans for the period.
While the economy continues to impact every industry, it is our duty as professionals to maintain a positive attitude that will reflect in our daily business. With good and creative ideas, proactive action plans that produce results, along with a high impact public relations programme, the hard times are bound to eventually pass paving the way for a healthier financial future.