In times of crisis, communication is key. As a CEO, CMO, or business leader, it’s crucial to communicate effectively with all parties involved to minimize damage and maintain trust. And we’re all getting another great lesson in communicating through a crisis with the SVP Collapse.
Silicon Valley Bank (SVB) is a publicly traded financial services company that primarily serves technology and life science companies—hence the name. During the pandemic-driven startup investment frenzy, SVB received a ton of capital. And what did they do with it, you ask? Well, they invested a big chunk of it into low-yield T-bills. Not the most exciting investment, but hey, to each their own.
But then the feds went ahead and hiked up interest rates, and those T-bills lost value faster than you can say, “yikes.” In March 2021, the company’s stock price fell by over 20% after it was reported that the company had significant exposure to a little-known hedge fund called Archegos Capital Management. Archegos had suffered massive losses, causing it to default on its margin calls and leading to a fire sale of its holdings, including those held by SVB.
And that’s not even the worst part. You see, SVB was already in the midst of a stock sale when Silvergate (another bank that worked with many crypto companies) decided to go ahead and collapse. Talk about terrible timing. As you can imagine, the SVB stock crashed, and some venture capitalists (ahem, Thiel) started recommending that companies pull their money out.
And that’s exactly what happened. Too many withdrawals and SVB crumbled like a house of cards. Cue shock and panic from employees, customers, and investors alike. Everyone was left wondering what would happen to their investments, jobs, and financial stability.
We all know markets are run on confidence, but what creates or destroys confidence?
So, in times of crisis, it’s crucial to have effective communication to maintain stakeholders’ trust and confidence in your organization. And let’s be real, those “soft skills” you may have brushed off in the past are suddenly looking pretty important. And communication isn’t always about text; you can use best free brushes for procreate to create interesting images to communicate what you think.
Fun fact: They are always pretty important.
If you don’t have clear and transparent communication during a crisis, stakeholders may start to doubt your ability to manage the situation, and that’s not good for anyone. A crisis communication plan is a must-have to keep everyone in the loop and address any concerns or questions they may have.
At Zen Media, we’re experts at handling crises for our clients. We’ve seen it all this year, from recession and inflation-related layoffs to cybersecurity incidents to sudden leadership changes. So we know how to help you navigate these turbulent times.
Recently, an eCommerce company’s CEO emailed all their customers to let them know about the SVB collapse and then offered a 40% sale on all their products. While we feel for them, that’s not the smartest move. Scaring your customers, even with discounts, is never a good idea.
So how should companies respond? If you’re one of the companies impacted by the SVB collapse, here’s what you need to keep in mind:
Communication Strategies for Companies Affected by the SVB Collapse
Monitor the media.
First things first, monitoring the media is essential. It’s like keeping your eyes on the road while driving—you don’t want to miss any signals.
Social media and message boards can quickly spiral out of control, so you need to stay on top of trending news on all platforms to understand how it’s being perceived and what concerns stakeholders may have. The media has a knack for creating a buzz and spreading rumors like wildfire. And in the case of a bank’s demise, the stakes are high. Depositors want to know when they’ll get their money back, and the media wants to answer their questions—or make buzz-worthy assumptions.
You can’t control the messaging, but you can flag any potentially damaging statements and conversations. This will give you a good idea of how people perceive the situation and what their concerns are. And trust us; this information is priceless when it comes to managing a crisis.
In fact, monitoring the media is critical in any crisis situation. You need to be vigilant and monitor social media platforms, message boards, and other media outlets for any potentially damaging statements or conversations about your brand. As soon as you spot something, flag it, or be sure that your PR team or PR agency has flagged it.
Knowing what’s being said is half the battle. By monitoring the media, you can keep your finger on the pulse of the situation, spot potential issues before they become bigger problems, and respond appropriately with messaging that resonates.
Less is more.
When it comes to financial crises, the stakes are high—one wrong move and your brand’s image could be shattered. That’s why a reputation management strategy is essential. And a key part of that strategy is handling media messaging with care. You want to make sure your message is on point—accurate, honest, and sensitive to stakeholders’ concerns. Less is more, so if you do need to put out a statement, make it count.
Messaging should always come from a position of strength and strategy. No one wants to hear excuses or blame games. It’s important to respond quickly but also thoughtfully. And that means having a clear understanding of the messaging and who in the organization is responsible for what. Legal should be involved for approvals, and speed is of the essence.
When you’re in crisis mode, it’s easy to lose your head. But it’s crucial to keep your cool and think strategically. And remember, messaging is a delicate dance. You want to be transparent but not give away too much. You want to be empathetic but not come across as insincere. It’s a tricky balance, but with the right approach, you can come out on top. So take a deep breath, gather your PR team, and craft a message that shows you’re in control.
In a crisis, speed is everything—it’s like a race against time, and you don’t want to be left in the dust. Companies that respond quickly and effectively can minimize the damage and even turn a crisis into an opportunity for growth.
Just look at Etsy—they jumped on the mask bandwagon and gained 4 million new customers in April 2020 alone. Talk about turning crisis into opportunity!
But it’s not just about responding quickly; you need to strike a balance between speed and accuracy and show empathy for the affected audiences. You don’t want to rush in with a half-baked response that misses the mark.
Speed isn’t just about being fast—it’s also about being agile. You need to be able to pivot and adapt as the situation unfolds. It’s like a game of chess—you need to be thinking a few moves ahead.
Craft a crisis communications plan.
To achieve an effective crisis response, you need a well-defined plan that outlines who is responsible for what, who the affected audiences are, what messages are important to share, and how and when to deploy the response. Preparing for a crisis is essential because each situation is unique. Train your executives and plan for potential threats before they arise. A company’s response during a crisis can determine its future success, so it’s crucial to get it right.
You also need to communicate with all of your stakeholders—both inside and outside the company. Your crisis communication plan should lay out exactly how you’ll do that. Who will you talk to? How will you talk to them? And what will you say?
Different stakeholders will have different needs and concerns. Employees might be worried about job security, while vendors and partners might be concerned about getting paid. Customers might have questions about the impact on their orders, and investors want to know about the future outlook of the business.
To address these concerns, you need messaging that’s honest, transparent, and reassuring. You don’t want to sugarcoat the situation or leave anyone in the dark. Give them the facts, and let them know what you’re doing to address the situation.
Your crisis communication plan should also include a media escalation plan, FAQs, and an internal communications plan. And make sure you get buy-in from company leadership so everyone is on the same page.
So, if you’re in the eye of the storm, take a deep breath, gather your team, and start building your fortress. With a solid crisis communication plan in place, you’ll be ready to weather any storm that comes your way.
Let’s face it—crises happen, and they can be brutal. That’s why it’s crucial to prepare yourself for anything that might come your way. Nowadays, with social media and everyone’s ability to share their opinions, brands must be on their toes and ready to respond. If you don’t have a social media manager to stay on top of social, now’s the time to look at hiring an agency to help. (hey there, let’s chat.)
If you haven’t faced a crisis yet, lucky you! But don’t wait for it to happen before taking action. Train your executives, plan for potential threats, and have a crisis management plan in place. Trust me; you’ll be glad you did.
Sure, the news cycle about Silicon Valley Bank (SVB) will eventually die down, but how your business reacts during a crisis can make or break your future success. So, stay vigilant and monitor the conversation surrounding your brand. Acting strategically means being aware of what’s being said about your brand, its leaders, and the communities it serves.
Don’t be caught off guard when the going gets tough. Be prepared, stay informed, and remember that a little bit of planning can go a long way.
And if you’d like a partner to help ensure your brand is as prepared as it can be to handle crisis communication, that’s what we’re here for.