The Indian startup winter, as it's being called, is the spillover of a cautious global sentiment shared by fund houses – the result of sustained inflation, geopolitical tensions, increasing interest rates and a seemingly never-ending pandemic. But there is a silver lining. This winter is also an opportunity for startups to build trust and value within their ecosystem.
There is no doubt that for business owners, specifically mid-to-late stage startups, the coming months will be challenging. Sequoia’s “Adapting to Endure” presentation warns that the market downturn will impact consumer behaviour, labour markets, supply chains, and more. It notes that it can’t be predicted how long the “the long recovery period” would be.
However, despite the market downturn, for many this is the correct set of circumstances to emerge resilient, or to at least course correct, in the hopes of maintaining customer loyalty, market position, sales, and brand reputation.
Each of these factors of business profitability and continuity is a function of the narrative you put out as a company. More importantly, successful performance in any of these factors cannot be achieved by operating inside a bubble. Most companies are already in full swing to fix and mitigate through layoffs and slashing budgets, while the need for effective communication in a time of uncertainty is being grossly overlooked.
Whatever do I mean by this? Your stakeholders both internal and external understand the world and your role in it through stories. The narrative you put out informs their plans and decisions of how much to invest, spend or save, and it is based on these narratives that they organise themselves in relation to you now and in the future.
In the same vein, your narrative has the power to soften and even turn the impact of economic turbulence. At the end of this winter, would you still have the trust of your investors? Would yours be the company that the most skilled talent is flocking to or will you be blacklisted as unreliable? Are you going to lose sales or boost customer loyalty?
Here are 4 ways how the right communication will help you, not only navigate the startup winter effectively, but also grow at the same time:
- Lead with transparency and support
This is a stressful time for everyone. Employees are worried about keeping their jobs and rising inflation is adding to these pressures. Being in the dark at a time like this can severely impact the wellbeing of your team, not to mention business continuity. So what should you do?
First and foremost, respond quickly. Hard truths will need to be communicated but it is crucial that they come from the frontmen of the company proactively instead of the market. An unattached unfeeling email is not going to cut it. No one and I assure you no one wants an email with a vision mission statement with best wishes at a time like this. People want to hear facts and exactly what is being done to either remedy challenges or to extend support.
Leaders should make it a point to meet their people, such that employees have the chance to pose questions. This will help you identify what needs immediate attention and solutions and which concerns are doomsday speculations that can be assuaged by sharing relevant data and information.
- Boost revenue despite the economic downturn
Word of mouth marketing employs both targeted efforts and organic cases of users sharing their satisfaction with a brand. Distrust in corporations in times of economic downturn is higher. People can easily identify sales pitches and would rather buy based on recommendations of who they trust - friends, family, influencers, reviews. Investing in WOM will ensure that your brand is viewed and promoted in the most trustworthy context possible. More so it can help you retain and increase brand loyalty without additional cost.
- Maintain brand momentum
Like all cyclical events the startup winter will also eventually turn. Going AWOL, especially during a time of uncertainty, will affect brand momentum. The narrative you put out during this time has the potential to further bolster trust in your company, increase your share of voice when most others may be bowing out and grow stronger bonds with your external stakeholders.
The job to be done is to stabilise and inspire confidence. Your customers might be interested in service changes, change in the quality of your product, suppliers would be concerned with changes in demand. The media will want to hear from you more than ever at this time about business numbers, outlook toward the future - they depend on you to share industry insights and vitality.
Earned media stories provide you the opportunity to showcase that you are monitoring the situation and doing what is required to manage and make the best of it.
- Linkedin is your best friend
More than ever before, a huge chunk of those affected and possibly those driving any and all conversations during a time like this are on LinkedIn. In the event of an economic upheaval or in this case a winter the fastest way to authentically communicate with your professional network is through LinkedIn. You can monitor micro conversations in the ecosystem, share updates and answer questions that relevant players have, flag important developments, fact-check information and correct rumours.
It’s important however to invest your time in bite-sized content that is relevant to your target audience. Your message should be simple and clear with temperate use of jargon. Supplement this with infographics giving your audience what they need to know with minimal frills. Endless convoluted stories with platitudes will only dilute your authority.
Define the parameters of your LinkedIn communication - do you want to be a part of industry specific conversations and consequently be recognised as a leading voice or do you want to put out a bland display of milestones and achievements? Both these strategies have a place in your brand narrative, now is time for the former to take precedence.
The role your communication strategy will play at a time like this cannot be underestimated. There is no guarantee that a company can go unaffected by cyclical economic events but a strategic communication plan improves an organisation’s ability to protect its reputation, bottom line, and business sustainability.
Authored by Upasna Dash, Founder & CEO, Jajabor Brand Consultancy