Tag Archives: Bank of America

Are we losing perspective on reputation crises?

I receive several email newsletters on public relations issues and business crises are among the favorite topics. Pitches for blog posts from authors or PR pundits frequently focus on the reputation crisis of the day. Commenting and reporting on reputation crises is getting to be like the news business itself–it’s all about immediacy, and if it isn’t lurid enough, or big enough, or juicy enough, we tend to try to make it that way. I’m writing as a crisis comms pundit myself, so this is a big of navel gazing.

Bank of America’s debit card fee kerfluffle. Netflix and their ill-fated business model change and Qwikster division. RIM and their outage problems–did they apologize quickly and effectively enough. News articles talk about drop in share price because of the Blackberry outage such as the LA Times report that share price of RIM dropped 1.1%. Not sure with the volatility of the market that is such a big deal.

What I’m wondering about is are we making too big a deal out of these crises? No doubt the Internet and social media have created greatly increased crisis risk, its increased the speed with which crises evolve, and with the crowd or mob-effect can explode relatively small issues into huge ones almost instantaneously.

Let’s look at some of the ones in the recent past–Dominos and their dumb employees YouTube stunt. JetBlue and its sitting on the runway problems. Even Toyota with the massive recalls and safety issues. Did the big listeria problem keep you from buying cantaloupes? I’m just raising the question here, but are crises like this just becoming commonplace and so losing their impact? Are we becoming inoculated to reputation damage by over exposure? Is it possible that one of the effects of social media on reputations is to increase reputation resilience by making the many crises that seem to pop up over time less significant? Is Bank of America really harmed by all the anger and consumer threats about their debit card fees?

Clearly, the PR profession and particularly those like yours truly who are in the crisis communication business want to think that all these are really big deals. And if the impact of these random thoughts is to take pressure off crisis preparation, then I am doing a huge disservice to all the companies and organizations who are woefully unprepared. But I am wondering if we need to think about crises a little differently.

I remember talking with someone who worked in the press office of President Bush Senior. He said every day was a crisis. That certainly is the case in high profile offices like the president or mayor’s of major cities. Crises in the sense of high public interest, media activity, lots of conversation, potential risk of making the wrong moves–is commonplace in certain offices. And that may very well be what is happening in the social media world. Almost everyday can be a crisis–some far more significant than others. I suspect if you work for a major brand and you are doing your social media monitoring, you are dealing with a dozen minor crises right now, or ones that could erupt into something more major. Is it a crisis if it is a daily occurrence?

I wrote some time ago that crisis communication may be dead. I guess I’m coming back to that theme from a different angle. I said then that if you have an on-going conversation with your key stakeholders, with those people who really matter for your future, then crisis communication is just intensifying that conversation. I really think this is the new world of crisis communication–but only for those who are engaged in on-going conversation.

That seems to me to be the crucial difference. Crisis communication in the older and now increasingly outdated sense is when you need to rely on traditional media to address the concerns and communicate with the people that matter. The new crisis communication to a large degree can  afford to ignore the traditional media essentially entirely because you are already talking directly and engaging directly those people who matter most. If things go wrong, you listen, you respond, you explain, you clarify, you correct the wrong information and you carry on the conversation.

Bank of America–could customer anger have been prevented?

Bank of America’s situation is similar to Netflix in that they made a business decision without much in the way of preparation and communication. The Durbin Amendment to the Dodd-Frank financial reform legislation is the reason for the increase according to the bank and to some on social media. This amendment limits the fees banks can charge for debit card swipes. A perfect example to me of unintended consequences with regulation aimed at protecting consumers but interfering directly in the best protection consumers can have which is healthy competition. But there is little in the social media discussion that blames the government regulators rather than the bank.

Bank of America is taking the heat big time on social media from this action of raising fees. However, their voice in responding to the criticism has been silenced because their website has been off and many are complaining about the speed of online services. As seems increasingly common these days, public or consumer anger turns into “hactivism,” with one result being the inability of the victim to engage in the conversation or communicate their key messages. Cyber security is becoming a significant crisis communication concern.

Undoubtedly other banks will be adding similar fees. So those many angry customers of BofA may go through the hassle of switching only to find their new bank doing the same thing. The first airline to add baggage fees took an awful lot of heat as well. But the others soon joined in, and without searching it, I can’t remember who the first airline was. Perhaps the same will happen to Bank of America—the consumer outrage will turn to general outrage against banks rather than the one who went first.

I think it will be different in that there seem to be all kinds of ways that banks can increase fees and with a large number of consumers switching accounts as seems likely from the heated comments, the other banks would be wise to hold off on adding the debit card fee, or like Citi bank find another way of adding revenue. So whether the present problem affects the bank longer term rather than a quick blip of customer loss depends on what competitors do and how much animosity against the bank has been built up. Is this the straw that causes mass customer reaction?

No doubt banks have to find ways to increase fees from consumers and the closer the fees are to the costs of doing business, the better. But building understanding of the realities even the biggest banks face, allowing time from the reaction to cool down before taking action, and then making certain you have the ability and actually do engage in conversation with your customer base seems a much better way forward than we have seen with Bank of America. In contrast, their actions and communication seems like the arrogance that Reed Hastings, CEO of Netflix, admitted to and apologized for.

Given BofA’s other reputation issues, it certainly seems that it would have been in their best interest to let one of the other guys take the lead in this new era of higher bank fees. Sometimes its best of the leader lets someone else take the lead. Pioneers, as they say, often get arrows in their backs.

—Update

Bulldog Reporter seems to think that this anger and backlash is all part of the bank’s grand strategy to switch customers to using the more lucrative credit cards. It is surprising to me that Dog, which seems hypersensitive otherwise to social media backlash, would blow this reaction off as some part of a grand strategy.

I also find it interesting that in this post that the bank spokesperson says they are “doing their best to explain the impact.” Hmm, seems their best could have been a lot better.

 

 

Bank of America sit-in–in search of a bad guy

A commenter on this blog suggested I weigh in on the protest against Bank of America by laid-off workers from Republic Windows and Doors. From this article from Bloomberg, I see that Pres-elect Obama has weighed in on this as well as Gov Blagovjevich–who suddenly it appears has greater problems than these protesters.

Just a quick take–and it is related to the post about blame. These people are angry about the loss of jobs. I’m angry about this terrible economy. I’m angry about all the suffering going on. I want to blame someone. I really really want to pin this on someone and feel better about not just finding the cause but pinning them on it and then making them suffer. But is Bank of America to blame? Is Republic to blame? Who can be blamed?

The reaction to our sense of frustration and helplessness is to find someone to blame and focus our anger on them. In this case it happens to be Bank of America. It’s effective on the one hand because BofA is big and powerful and they are the ones who pulled the line of credit. But will it be effective? I don’t think so. Everyone knows that the problem is not BofA and their “heartless” lending policies. The problem with this mess is that it is too big for almost anyone to take the blame. Sure, some will blame “Wall Street”–but who the heck is that. Many are blaming Pres. Bush–an all too easy target these days. The very fact that others are so quick to blame the usual suspects makes this mostly a non-issue for BofA. I haven’t studied their response yet but if they are doing anything than expressing sympathy for and empathy with those who are so angry at them they are probably not responding well.

Lessons learned for crisis communicators? If you represent a big and powerful organization, you will get blamed–for something.