Charts like this one have become commonplace during COVID as economists track economic impacts of the pandemic and forecast an inevitable recovery.
At the start of the outbreak, there was a glimmer of hope the recovery would be V-shaped. At this point, nearly a year into the crisis, we probably would settle for U-shaped. But odds are we will end up with a long-tail recovery like this, a chart that roughly resembles the symbol for a square root.
In business, charts like this one have been around for years. They could represent a stock market crash. A recession. The financial crisis.
So why do crisis events -- from a pandemic to a stock market crash -- look so much alike? Because they all play out the same way.
In business terms, idiosyncratic events are a catalyst triggering significant declines in a key performance indicator -- stock prices, GDP or unemployment in the economy, and purchase intent, sales and market share for companies. The KPI eventually bottoms out, rebounds, then gradually improves in a long-tail recovery following the most extreme events.
OK, so what's the chart on the Whiteboard?
What we are looking at here is the typical signature of a crisis event triggered by breaking news.
It could be the Toyota Camry recall. Or the BP Deepwater Horizon explosion. The Target card breach. Home Depot card breach. Equifax data breach. Carnival Triumph cruise. Chipotle food safety. VW diesel emissions scandal. Wells Fargo sales practices settlement. A United Airlines passenger roughed up by police. A Sea World trainer tragically killed.
We've generated dozens of charts like this to track crisis events, and they all look like the one on the Whiteboard. Using tracking tools like YouGov BrandIndex online polling data, we can plot consumer perceptions of news people saw or hear about a company or brand, and corresponding shifts in brand perceptions and purchase intent. In YouGov terms, the chart on the Whiteboard is plotting Buzz.
So after our discussions about tracking news volume and tonality, and building an integrated news stream, why are we looking at consumer Buzz? Because if you manage business communications, enterprise risk, or financial modeling, the ability to continually track news reach with customers, gauge their response and forecast their reactions is vital.
In business-as-usual, Buzz is a handy windsock, a way to track headwinds and tailwinds affecting the sales funnel. During a crisis, quick decisions will need to be made about adjusting prices to maintain and defend market share. Being able to call the bottom and plot the recovery is key to determining when, by how much, and for how long.
And if a competitor happens to fly into a storm of their own, customers will be in play. Market share will be on the table. We'll talk more about this in Flying Blind. But for now, it's worth considering whether your communication research can track true reach and resonance of news with people, and whether your crisis playbook should include processes for tracking data like this to navigate a storm.
Remember, news volume and tonality data have their limitations. The news stream by definition is backward facing, and not predictive. That makes sense. Borrowing an analogy from chemistry, news is a catalyst. In business, though, we also need to measure the reaction.
In Third Rails, we will talk about how to identify catalysts, the types of news stories that can trigger emotional -- at times, visceral -- reactions with your customers. News that can affect customer acquisition and attrition. Customer satisfaction. Sales.
In Long Tails, we will see how the news stream in a crisis can be used to call the bottom, and aligned to consumer data to track the rebound and forecast the recovery.
It all starts with the ability to align the news stream media data -- what was published -- with customer data tracking news people saw or heard. We'll take a look at one way to do that in What's this Buzz all About.
Back to the Whiteboard.