An economic downturn is something that no one — save pawn shop operators, repo men and payday lenders — wants to deal with. The situation, however, does not have to be a negative. Economic downturns can present opportunities for many businesses, including public relations firms. Small and mid-size public relations firms with stable client bases and flexibility can reap benefits from a south-facing economy by targeting sectors and businesses that will still be spending regardless of the environment. Here are some areas that public relations professionals should be targeting during an economic downturn:
Healthcare: No segment of the economy is bulletproof or recession-resistant, but the healthcare sector has historically outperformed other industries during an economic downturn. Biotech companies, for example, are not going to feel the pinch from a sour economy if they have the cash and credit to operate normally. Their businesses are based on research and development; ultimately, they’re dependent on securing approval for their products or drugs from regulators. Generic drug companies should also do well during times of economic turmoil because they offer the same drugs that brand-name competitors do–but at cheaper prices.
Consumer Staples: Regardless of how well the economy is doing, people still need to eat, clean their homes, and use a variety of day-to-day products. When I think back to when I was temporarily unemployed and in some rather dire financial straits, my money went to the staples: rent, utilities, food, toiletries, and household products.
Mid-Size Companies: Many mid-size companies utilize the services of large public relations firms. An economic downturn is a good time to remind mid-size companies that a boutique, or a group of boutiques, can do the same public relations job cheaper. Mid-size companies are looking to cut costs, and public relations typically ends up on lists of cost-cutting measures. If your public relations firm can offer a comparable or superior service at a lower price the message will reach these mid-size companies during an economic downturn.
Distressed Companies: Insurance giant AIG has racked up more bad publicity recently than most companies do in a century. Most of the negative publicity is deserved, which is probably why the company has reportedly engaged Burson-Marsteller, a firm headed by a former aide to Senator Hillary Clinton, to help with public relations. The big, bad headlines for AIG involved a pricey conference that cost $440,000, money that is essentially coming out of taxpayer pockets. The expenditure came to light during Congressional hearings and AIG took too long to explain the fact that the conference was for third-party partners. What AIG should have also explained was how much revenue the attendees of the conference generate annually and why such an expenditure is important for business. When companies are distressed they need to generate positive PR, as customers, partners, and employees are looking for signs of normalcy in a distressed company’s operations.
Companies Laying People Off: When companies cut jobs they often look to outsource certain services. A company cutting public relations jobs may be looking to replace employees with a third party that can do the job without incurring healthcare, overhead, and payroll tax costs. If you are having an ethical dilemma about being pegged an opportunist, consider this scenario: There are people in New York and other cities who read the obituaries as a way to search for apartments. As another example, years ago I had a friend who put an advertisement aimed at widows in the local newspaper. The ad said that he’d remove anything from someone’s house for free — or for a fee if the person wanted to get rid of it quickly. I gained a free pool table out of it. (The widow hated the pool table and just wanted it gone so she could turn the room into a library.) Do those scenarios represent morbid self-initiative, or simply good business sense that is mutually beneficial to the parties involved? Just remember, in an economic downturn, it’s business and not personal.
This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.