Top 5 Crisis Communications Strategies For Web3: Navigating Negativities In The Decentralised World

The old saying “bad news travels fast” has never been more true. Today, it’s not just news but social media chatter, which is instantaneous. Those working in web3 are all in favour of such connectivity. The trick is to ensure it’s working for you and not against.

Web3, “the decentralised web”, is built on blockchain technology, the latest phase of the internet. It’s bringing greater transparency, privacy, security and opportunity for users. But for companies acting in this new space, grasping the nuances and intersections between internal communications, PR, marketing and community building can be tricky. 

In terms of crisis strategies, there are many similarities to established ones, but with a few web3 bespoke tweaks, which can prove vital.

1: Prepare in Advance 

The crypto world is no stranger to crisis. Only last year saw the collapse of Luna and FTX. As many web3 platforms and applications have a financial component, built on cryptocurrencies or using smart contracts to facilitate financial transactions, it's crucial to have a crisis communication plan in place, so as not to trigger panic amongst users.

A crisis communication plan outlines how a company will communicate with its stakeholders in the event of a crisis. The event needn’t be as severe as an FTX-level catastrophe, 

perhaps only a sudden outbreak of negativity towards the brand, something that sparked anger or distrust, but which threatens significant impact.

Having a good plan to navigate a crisis can help companies maintain trust and credibility. Companies should think through potential scenarios, and have a message ready to help shape the narrative, along with a chain of command in place, ready to swing into action. By being proactive, companies can work to minimise damage. Such times can even become opportunities, a chance to demonstrate commitment to stakeholders.

Handling a crisis revolves around timing. Immediately leaping into action should be resisted until all the facts have been gathered, as backtracking and contradicting previous statements can further damage reputation. Equally, delaying too long likewise becomes corrosive to public perception.

2: Act Quickly and Transparently 

In today’s highly connected world, reputations can go downhill fast. The same means that mediate such explosive outbreaks - principally, social media - can also be quickly deployed for damage limitation exercises. One thing’s for sure, silence can be deadly. 

In 2022, Celsius Network went into insolvency and opted to not say very much about it, or at least not enough. Such a strategy, or lack of strategy, firstly goes against DeFi’s ethos of transparency. But, secondly, in a time of constant commentary, you’ll find you’re the only one being silent, while other narratives rage out of control.

When Celsius did talk, they blamed the “crypto winter” and knock-on effects which fueled a sell-off. This was exacerbated, they claimed, by “misleading” statements in social and traditional media. It could be argued that they contributed to this climate, however, via slow and insufficient messaging.

There are three main bases that should be decisively covered at such times:

• Acknowledge what happened and consider issuing an apology. 
• Communicate the steps you will take to minimise damage and make amends. Demonstrate concern and avoid any appearance of being distant and self-serving.
• Mention some ways and means by which you will prevent the event from happening again.

Binance delivered an excellent example of how to act in 2019 when hackers stole over $40 million in Bitcoin from the exchange. They immediately acknowledged the issue, froze the funds in question, and maintained transparent communication with their customers. Next, they announced measures to avoid a repeat of the breach and covered customer losses. The crisis ultimately served to enhance its reputation.

3: Monitor Social Media and Online Forums

Companies and projects should carefully monitor social media and online forums, Twitter and Discord currently being the primary platforms for web3. Social listening tools can help companies detect emerging issues and respond proactively. Dealing with small flare-ups is much easier than fighting wildfires. 

Social listening tools are software platforms that collect data from social media channels, providing insights into customer sentiment, preferences and behaviour. Companies should invest in such tools and have a team in place to manage social media accounts and engage with the community. Social media and online forums are essential channels for delivering clear and concise information in times of crisis.

To comprehensively understand your brand's reputation, your comms strategy must reach various platforms. Reputation management is crucial in web3, and a positive public perception can lead to increased user engagement and collaboration, as well as assist with crisis management. Regularly monitor the effectiveness of PR efforts by tracking metrics and adjusting strategy as needed. 

Web3's rise has resulted in multiple news sources, social networking sites, and blogs. Companies can offer product and service experiences to engage with customers, creating word-of-mouth marketing and brand loyalty. PR professionals can leverage user-generated content to provide stakeholders with diverse and authentic views of a company or brand. For example, Nike and Adidas have taken their marketing into web3 via the use of NFTs and the metaverse.

4: Engage with Stakeholders 

Damaging misinformation can develop amongst those closest to you, as well as in the general public, so it’s vital to keep stakeholders close, trusting and informed.

Some examples of stakeholders in the web3 industry may include investors (which can also include your token holders), customers, employees, partners, your community, media, and so on. It's essential to identify these and communicate effectively with them to build strong relationships for mutual success. Also, remember to remain open to feedback and adapt strategy accordingly. 

Web3 is much more about community. Companies and projects often possess not just a team but also rely upon a larger community, composed of advocates, users, and holders of tokens and NFTs. Community building has become an important part of growing a user base for web3 projects.

Trust and transparency are perhaps the two most important ethics of web3. For companies, this means reputation management has become more vital than ever. Stakeholders are now more discerning, having access to information as never before. 

In the event of a crisis, everybody in your company - potentially every stakeholder - becomes a spokesperson. Staying connected, communicative and transparent breeds understanding and trust, and helps maintain the best messaging that can also steady the ship in choppy waters.

5: Learn from Mistakes and Implement Changes 

After events subside, ensure to conduct a review in order to learn from the situation and prevent similar events from occurring again. This involves analysing how well the situation was handled, examining what could have been done differently, and implementing any necessary changes. It’s a chance to reflect on how your brand got into trouble, and what then helped and hindered.

This time of reflection benefits from many perspectives, interrogating events and responses from a multiplicity of angles and personnel. This is also a good time to review the crisis communication plan, and update it according to any new lessons learned, refining the plan in case of a next time.