Believe it or not, when we founded our US business seven years ago, banks were thought of as boring, ‘the 1%’ referred to low-fat milk, and Wall Streetwas a place young graduates lined up to work, not occupy.
We arrived from London in that three-year window between the beginning of the end of the dotcom bust and the end of the beginning of the mortgage meltdown. Three halcyon years of rampant securitization, cheap credit and ‘Flip This House’ marathons on A&E. We had no idea what was about to hit us.
Since then we’ve sat inside an MBS hedge fund while $2 billion of redemptions walked out the door. I got to personally witness the flash crash from the desktop of one of our high frequency trading clients. Most interestingly, we were tasked with re-launching the legitimate market making arm of a little-known firm called Bernard L. Madoff Investment Securities LLC. I remember joking at one point about the old commercial: “Come for the Pizza, Stay for the Fun”. Only in our case it was come for the opportunity, stay for the apocalypse.
Yet during this turbulent period we managed to grow the company into a major player in financial PR and open successful offices in New York, Los Angeles, Singapore and Sydney, in addition to our London headquarters. Many people assume this success was due to the fact banks “needed” communications support during the crisis. In fact the opposite was the case. For the past four years, the absolute last thing banks felt like doing was communicating. Some merged or were acquired, many went out of business, almost all went to ground.
As far as I can tell we succeeded for three reasons, which I present as tips for anyone looking to build a business in the depth of an economic calamity:
Keep calm and carry on – American judge and author, Jacob Braude once said: “Always behave like a duck: keep calm and unruffled on the surface but paddle like the devil underneath.” For the past four years one thing our clients have needed around them more than anything has been level heads. Whether directly in crisis mode or simply responding to the hyperbole of the Street, our financial services clients did not need one more reason to freak out. By offering them dispassionate and worthwhile advice we were able to keep them calm and keep them coming back. At the same time we were paddling like the devil under the surface! Networking like crazy and an aggressive sales strategy, considered unbecoming by many PR agencies, ensured it was our competitors that felt the recession and not us.
Add value – Analysts in our industry refer to what happened in the stock and housing markets as a “correction”. Overvalued assets reset sharply back to more appropriate levels. Though it’s not often spoken about in these terms, I believe the same thing happened in the world of service providers. After years of unwarranted price inflation, if your services weren’t worth the money, they would be scaled back or cut altogether.
Measure everything – Public relations has always gotten a bad rap as a fuzzy science that is difficult to measure. Not a great place to be if, as above, you’re trying to demonstrate value-add in the middle of the worst economic crunch in living memory. So right when most firms retrenched we invested in a new proprietary technology offering which would help our clients measure their reputation in real time. For those unaware of Pearson’s law it states: “That which is measured, improves. And that which is measured and reported improves exponentially.” By focusing so ruthlessly on measurement and reporting we probably made our lives harder, but we also made our clients’ campaigns more successful and our relationships with them a little stronger.
Contrary to expectations, our success over the past five years has built in spite of, not because of, banks willingness to communicate. As financial institutions, find their voice and begin to flex their muscles once again, it will be interesting to see just how far this business will go.