It has been interesting to follow the development of the so called “Map Gate”, the media circus triggered by Apple’s failed attempt to replace Google Maps in the new iPhone. Please, do not think that I am gloating on the misfortune of Apple. No, I am interested in how quickly the public opinion can change. Not long ago, Apple was heralded as the innovator and customer advocate on simplicity and design. That has changed and media is now portraying Apple as a bully with poor working conditions in their assembly factories and never ending legal disputes with Samsung. Media has even rained on Apple’s parade during the launch of iPhone 5. You could really sense the sarcastic undertone when media realized that most of the people standing in line for the new iPhone 5 were not raving fans, but people eager to get exposure to themselves and their products. Similarly, many companies in the financial sector have experienced that they suddenly are described as the Evil Company. Just ask the General Partners at the Private Equity firm Triton that went from unknown to the illustration of greed with their investment in the healthcare company Carema Care. I will argue in this blog post that companies in the financial sector are facing an increased risk of ending up in the headlines on tabloids and that neglecting to pro-actively address this risk may jeopardize your long-term competiveness.
Let’s face it. Media and the general opinion love to hate the financial sector. Politicians, both on the right and left wing, capitalize on this bias. You can expect headlines if the banks do not slash the mortgage rates when the Central bank reduce the repo rates but there are no comments when manufacturing companies benefit from changes in the exchange rates. Stig Malm pulled some cheap shots when the he ridiculed the stock brokers and called them financial puppies (finansvalpar) in the eighties. Have you ever heard the union ridicule the real estate brokers that were just as young and made as much money at the time? And the twitters on #sägdinränta love to question the integrity of the financial advisors at the banks but they probably trust the recommendations from their dentist without any second thoughts. Some may quote Liberace on this and say that they will “cry all the way to the bank”, but I think that is shortsighted. Especially now when the financial sector is losing ground to the IT-sector in the war for the best talents.
So, if you just like Goldman Sachs want to recruit SWANs, i.e. candidates that are Smart, Work Hard and are Ambitious and Nice, you have to consider your reputation and talent branding. I would recommend you to consider the following three pro-active measures:
- Governance. Those of you that follow this blog have probably read my post (in Swedish) where I argue that an enforced Corporate Governance would have been more successful in preventing the crash at HQ Bank than more legislation. The Swedish model for Corporate Governance (Bolagskoden) addresses most of the issues where financial institutions get complaints and bad press. A company with strong values and the guidance from a carefully constructed Corporate Governance model and a policy on Corporate Social Responsibility will probably make fewer questionable decisions. And their board members will be better prepared to defend their decisions when challenged by the press.
- Human touch points. Many banks are making major investments in self services. I see a risk in reduced customer loyalty if the customer contacts points are engineered solely to minimize costs. You have to consider the customer experience, especially in the most critical contacts points. The most recent Customer Quality survey from SKI (Svenskt Kvalitetsindex) revealed that customers are giving increased importance to service quality. I strongly believe that the best way to build trust for your company is by having employees that earn trust in their interactions with the customers. It is easier to accuse a faceless company of being evil than one where you have good relationships to its employees.
- Social media. Most of you have probably heard about the blog storm Dell Hell. It was initiated by a famous author in the IT-industry that blogged about his frustration with the contact center at Dell. His comments resonated with the experience from other neglected customers that quickly provided additional war stories on the poor customer service at Dell. The whole thing escalated into a perfect storm and quickly made the headlines on several magazines. After a while, Dell realized the severity of the situation and decided to ramp up their contact center and start to monitor and engage in dialogues with their customers on social media. Dell is now recognized as one of the most responsive companies on the social Media but few other companies have picked up on the lessons learned. A recent survey showed that only 16% of the companies monitor the social media.
You may call me naïve, but I do not believe in the old saying that “all PR is good PR”, at least not if you want to attract the talents that will determine your future competitiveness. Being a good company is not about engaging PR consultants that are experts on damage control when incidents happen. It is about acting on your values and meeting your customers on the channels where they are and building relationships to them.