As the world enters lockdown and the markets become ever more volatile, we decided to revisit a topic that will be on everyone’s agenda – crisis communications.
We’re old enough to remember the last financial crisis in 2008, and just as ‘Crisis Communications’ was a popular topic for discussion then, we think it’s a subject that’s more pertinent than ever before.
The world is still adjusting to an unprecedented and rapidly evolving situation surrounding the novel Coronavirus and COVID-19, and while it’s too early for anyone to predict what the long-term effects will be, or how long they might be felt, we can at least focus on the here and now.
What is crisis communications?
Before we answer the question, it’s a good idea to remind ourselves what a crisis is. If we refer to the Cambridge Dictionary for the definition of crisis:
- a time of great disagreement, confusion, or suffering
- an extremely difficult or dangerous point in a situation
- experiencing a time of great difficulty, danger, or suffering
If we condense these definitions, we can agree that a crisis is typically seen as a turning point, usually involving an impending abrupt or decisive change.
So what should we do when a crisis emerges?
- Be prepared. We can’t foresee the next crisis or when it might happen, but we can have a plan and agree how to deal with various scenarios.
- By definition, a crisis is hard to predict and this makes our actions prior, during and following an emergency crucial to surviving one.
- If you have a plan it becomes much easier to communicate and provide reassurances when called upon.
- We believe online communication plays a vital role in any risk management plan. People naturally turn to the internet when looking for information, and this becomes heightened during a disaster.
Our team has been glued to international headlines recently along with everyone else seeking information and reassurances from those we might expect to have the right answers. Meanwhile, our media outlets are constantly challenging those who appear to have failed to plan effectively.
Crisis on the internet, friend or foe?
The internet and digital communications can play many roles in a crisis, depending on the situation and who is most affected.
Some may see the internet as a potential trigger to the crisis itself; the spreading of rumours, bias or leaking of information can force companies into action where they didn’t need to previously. It can also be a destructive mechanism; angry customers (or shareholders…) sit alongside advocacy groups and NGOs to disrupt proceedings or oppose initiatives.
But a website can also become a fantastic defensive mechanism, especially in a world that has ‘gone virtual’ with websites being the primary, and perhaps only, source of information. We no longer have the luxury of physical meetings, business travel, expense accounts, corporate hospitality and all the other usual mechanisms we typically use to form and set perceptions.
Used correctly, the corporate website quickly becomes the go-to resource for quick and easy dissemination of information and updates. It’s also a place where the messaging can be direct and controlled – you choose what you say about you, and to some extent, how that is received; but if you’re not talking about you someone else will fill the void.
Moving beyond the website, we can also use social media, forums and chatrooms to monitor changes in sentiment or opinion, almost in real-time. It’s never been easier to create a message, disseminate it and judge its effectiveness.
How investors react to crisis
We’re already some weeks into the coronavirus and COVID-19 crisis, depending on where you are in the world and how your country has reacted. For us here in the UK, we can take a look back on the early weeks and review the sorts of questions people were asking…
- Is this a short-term or longer concern?
- Is this localised or will it go global?
- How will everyone else react?
- What are the knock-on effects and what will the repercussions be?
Sadly, we still have more questions than answers, and at the time of writing the situation continues to worsen. It therefore seems prudent to assume that we’re in for the long-haul, at least until effective mitigation, treatments or vaccines are developed and implemented.
So what do investors and the markets do when a crisis happens? Like everyone else, they go looking for information. They’ll widen their search criteria and take a much broader view of the situation with a view to consuming as much information, opinion and insight as possible.
The key lesson here is to ensure you’re in control over the flow of information on your company, and as previous pandemics have taught us, it’s imperative you remain transparent to generate and retain trust among audiences. To do anything else just makes a bad situation worse.
If an investor finds information they don’t like – or worse – they find no information at all, they may well decide to drop the stock – temporarily or permanently – to protect themselves from further loses.
This is where corporate crisis communications can really make a difference. History has taught us that how a company responds to a crisis can make or break the outcome.
It’s important CEOs and their fellow executives lead from the front and become more visible, even if they don’t have a formal plan or mitigation strategy in place just yet. Saying nothing because you don’t know what to say isn’t a solution; announcing that you’re actively planning and will be back with more information as soon as possible, is.
It’s a small example, but we’re no different in this respect.
Brighter IR transitioned to remote working a couple of weeks ago, and our first action was to create a blog post to let our clients know and provide reassurances that we’re business as usual. We support hundreds of public clients in their own communications, and the last thing they need to worry about is our ability to help them when they need it most!
Step 1: Make sure you have a plan
Every company, business and market is different, and each will have its own potential pain-points that may be unique, while others will be more universal.
Irrespective of the nuances, it’s extremely important that you have a plan. How you manage internal communications might be first on the list; it’s crucial to ensure you have a cohesive message that’s understood internally so your workforce feel protected, and as far as possible, assured. They will be your ambassadors for any external communication and must be unified.
- Be open and transparent to generate trust
- Integrated communications strategy
- Internal vs. external nuances
- Identify key channels for communication
- Begin preparing for all eventualities
Step 2: Communicate now more than ever
Most of our clients are used to maintaining their corporate website with changes to their operations, alongside regular updates which happen during result cycles and the broader financial calendar.
Many clients also have experience of using channels including executive interviews, using public relations and investor relations specialists, webcasts and audio-only podcasts, and regularly updating investor presentations. We expect usage of these to increase, and for those who haven’t considered them, we strongly recommend they do. Our sister company, Proactive, can help!
- How quickly can you add a new page or section to your website?
- What’s the plan for dissemination of your content?
- Which channels will you make use of, when and for how long?
- Who will be strategising and leading each communication?
Step 3: Monitor sentiment and make use of analytics
Some of our clients have already created pages within their websites dedicated to the coronavirus and COVID-19 pandemic, and we expect the messaging on these pages will change over time.
Caledonia Mining Corporation Plc (LON:CMCL) and Marlowe Plc (LON:MRL) are some immediate examples. Another of our clients, Sequoia Economic Infrastructure Income Fund (LON:SEQI) held an investor call, with the original audio and investor call added to a new page.
Using analytics, we can look back on the potential effectiveness of these communication channels and produce reports for our clients, helping them to measure their effectiveness and decide if they will continue, or do something differently next time.
- What do your baseline analytics show and what are the trends?
- What’s being said about you on social media and bulletin boards?
- Are you mobile optimised with a focus on organic SEO?
Step 4: Proactively engage with stakeholders
With the levels of market volatility that we’re seeing, it’s fair to assume that not many investors will be looking at potential buy opportunities just yet. Those who haven’t already will instead be considering liquidating and selling stock. Even so, there are some investors who will want to remain in the market and may be more interested in reducing their exposure to risk.
This is where proactive stakeholder engagement will make all the difference. Companies who communicate clearly and often, even if that communication is to say nothing much has changed since the last one, will have an advantage over those who don’t. Increasing the scope and range of channels, with executive interviews, virtual investor forums and regular conference calls should prove effective.
- The spoken word is more credible than the written
- Identify influencers and target them directly
- Address key questions, even if you don’t have a clear answer
- Be ready to adapt and evolve your communications as quickly as the crisis itself is evolving
Step 5: Hope for the best, prepare for the worst
We don’t know how long the current crisis will continue, and we don’t know how bad it will get in the interim. It’s already an incredibly fast moving situation with headlines becoming obsolete between the time of writing and publication.
Our opinion is naturally biased, but we recommend everyone has a modern website that’s quick and easy to update, and flexible enough to cope with rapidly changing and last-minute content requests. If you can combine that with an efficient and experienced team who are equally quick to respond, you’ll have the right tools to help you communicate during the current crisis.
Our suite of market-data driven IR tools, such as automated Regulatory News Service announcements, can help reduce your internal administration burden, while our Regulatory Email Alerts tool provides a convenient way for investors to keep up-to-date while building a list of interested stakeholders who may appreciate additional outreach.
If you’re looking for help with corporate communications during the current crisis please get in touch and speak to one of the team. We might even be able to save you some money in the process.
- Consider ongoing maintenance costs and factor in any additional changes you might be making in future
- Make sure you’re getting the right advice and guidance
- Monitor, measure and adapt communications as needed
- Focus on ways you can improve communications while reducing spend