What’s your plan for the next stock market crash?
I bet that question took you by surprise. Judging by some of the conversations I’ve had recently, it’s probably not something you’ve been thinking about very much. As of this writing, the Dow is dancing around its all-time highs. Financial institutions are salivating at the prospect of deregulation. Economic indices are looking good. Nobody is worried about another crash.
But you know one is coming.
The only question is when. You may remember Jamie Dimon telling us to expect a crisis every five to seven years. Even if you disagree with that timeline, you know a sell-off is inevitable at some point. It could be provoked by Chinese debt, “Italexit,” a trade war—or just an exhausted bull market that finally runs its course.
Do you have a plan to respond? Many firms don’t. Here’s a curious fact: Today it’s commonplace for businesses to conduct extensive business continuity and succession planning, preparing for natural disasters, cyber attacks, and the loss of key persons. Ironically, these are all eventualities that may never happen to a particular firm, yet everyone prepares for them just in case. On the other hand, a bear market will definitely happen again to everyone, yet hardly anyone is ready. What gives? Just another odd quirk of human psychology, I suppose.
At FiComm, we’ve created a complete communication plan ready to deploy at any moment in case of a crisis. I suggest you do the same.
I am not simply talking about market commentary. You should certainly communicate market insights if that is the type of information you like to share. But your clients will require something faster and more personal to restore their peace of mind.
Create a crisis communications plan. It doesn’t need to be overly complicated, but it should answer some basic questions.
- Who initiates the plan? Make clear who has the authority to pull the trigger—and who acts as backup if those individuals are unavailable
- What does the phone tree look like? Map out exactly who will contact whom, and make sure that information is instantly available to everyone if something happens
- What will you say when you call clients? You want everyone singing the same tune. But you won’t be able craft a good message in the middle of a meltdown. Hash out the basic substance of your message in advance, even if you need to tweak it on the actual day
- What will you email? To whom? Your email message needs to reinforce what you say in person and on the phone. Draft a straw man email now, so you can quickly edit it later. Also, prepare your crisis email lists in advance, and don’t forget to keep them up to date. Use separate lists for employees, clients, and vendors
- What will you say on your website? Your home page is likely to take a serious beating from clients trying to log in. Create a short welcome message to reassure them. Let them know you’re on top of it
- Who is in charge of electronic communications? Choose someone with minimal telephone tree responsibilities, so they don’t get bogged down in a single phone call while dozens of other clients never even get an email
- Where is your crisis plan stored? Is it easy to find and reference in the heat of the moment?
I know, I know. You’re busy. There’s no danger now. You’ll have to put it off until later.
Just remember. Later may too late.