Financial Firms Must Break From The Pack To (Re-)Establish Trust

by Stephanie Fierman

Here at the Garage, we believe that a more measured approach to bank and investment advertising is probably a positive development.

After all, hadn’t all the ads begun to look the same? Could every company and every investment have possibly offered the best return, and the most Morningstar stars, and the biggest retirement homes in paradise? Unlikely. Outside of just a few stalwarts, such as Vanguard with its slow-and-steady point of view and Bogle-esque approach, many of the siren calls in the newspaper, on television and online had all taken on a surreal and undifferentiated patina. That’s not effective.

Now it appears that all the bulls have stampeded in the opposite direction.

Consider the list of firms advertising in one issue of The Wall Street Journal this past week, along with text pulled verbatim from their ads:

MORGAN STANLEY: “To find the smart investments today, you need to be world wise.”

MERRILL LYNCH (aka Bank of America): “Seeing clearly. Acting confidently.” “With personal insight into your goals and an understanding of the market…” “…Find a smart place for your money.”

CME GROUP: “Rise Above the Risk.” “For more than a century CME Group has provided competitive, transparent and safe markets.” “…protect customers and ensure financial integrity by guaranteeing the performance of every transaction on our exchange.”

TD AMERITRADE: “There’s never been a better time for a second opinion.”

FIDELITY: “Guaranteed income you can live with.”

GLENMEDE: “There’s no substitute for safety and stability.”

PNC: “…It’s also a way of doing business that has strength and stability at its very core.”

Safe, smart, transparent and guaranteed: these are the adjectives to which financial firms are now rushing as they adjust to our new economic circumstances. The problem is – well, it’s the same problem as before, isn’t it? If your messages are entirely undifferentiated from those of your competitors, they essentially melt into one and stakeholders become unable to distinguish one from the other.

If the Garage held a focus group tonight, and scrambled the names of the above firms and the quoted text, we would challenge any budding Trustmeister to re-match the elements correctly.

And killing an ad’s effectiveness may, in fact, be the most benign result. Worse? Just as when every firm claimed great returns – which turned out to be untrue and, in some cases, backed by unscrupulous actions – everyone now shouting about safety looks equally as unlikely and untrustworthy.

All of these brands are more and are capable of doing more: the “more” being the hard work needed to determine exactly what it is about the brand that is unique and distinguishable from the competition.*

Without doing this work, going out with a “safety” message isn’t safe at all.

* Many of the above firms may not technically be competitors, but that’s an insider’s view. To the public and the U.S. Congress, too much of the same becomes one shapeless – and dubious – perception.

A version this post was first published on http://www.stephaniefiermanmarketingdaily.com/.

Tone Deafness In Financial Advertising

by Stephanie Fierman

If we here at the Garage haven’t said it aloud just yet, it should be a given that financial services advertising is an arena fraught with peril these days. Do you advertise at all? And, if so, what message do you communicate that won't end up sounding like a punch line? Consider for a moment that Lehman Brothers won a Best Advertising Campaign of the Year in 2007 and Bear Stearns’ tagline was “Risk Managed. Value Added.”

You can’t make this stuff up.

Here’s a Bear Stearns stress ball for sale on eBay that carries the line “Little Things. Big Impacts.” (Ha ha ha! Thank youuuu! Please remember to pay your waitresses!)

Unfortunately, Bessemer Trust appears to be playing the dark comedy angle this week.

Henry Phipps founded Bessemer over 100 years ago to manage his family’s proceeds from the sale of Carnegie Steel. Today, the firm’s website states that Bessemer manages in excess of $50B in assets for over 1,900 families, and that its “history of serving wealthy families affords us an understanding of the issues that matter to you.”

It would be safe to assume that some of those “issues” might include the scary guy in the room these days, Economic Meltdown, and his accompanying stooges, Uncertainty, Irresponsibility, Misrepresentation and Anxiety. A financial firm that chooses to advertise in this climate must reflect that it understands these realities.

So imagine my surprise when I saw Bessemer’s ad in The Wall Street Journal: a half-page ad with huge type, saying “We invest your money right along with ours. Needless to say, you benefit from some very careful thinking.”
My reaction: “They’re joking. Bessemer is an honorable and discreet company. Why would they get down in the mud with other companies that followed this same practice and lost their investors billions of dollars?” Investing your own funds is no guarantee of anything – it’s not a guarantee of wealth, intelligence, integrity or the “alignment of interest” touted in Bessemer’s ad. Lots of categories currently in the hot seat invest their own funds: venture capital firms, investment banks, mortgage companies… Enron invested its own funds alongside clients, for Pete's sake!

The ad's small type does actually call out some positive characteristics and benefits of working with Bessemer “as the credit crisis loomed.” Unfortunately, I am fairly certain that no one who saw this ad ever read that far.

Does Bessemer have an executive tuned in to the reputation and trust zeitgeist today? If not, it needs one; if so, we would suggest a bit of retuning. Contact us here at the Garage: we’ll be gentle.

A version of this post was originally published at www.stephaniefiermanmarketingdaily.com.

Reputation Management for New Media (Paul Dunay)

A strong brand helps to communicate that a company and its offerings are relevant and uniquely able to meet customer needs. Most companies today pour millions into brand-building campaigns to generate that external awareness, which in theory can speed up the sales cycle. This has become the accepted norm, taught to us by the very advertising agencies we hire.

But all this great awareness can come crashing down on you with one reputation disaster online.

Good and bad reputations are opposite sides of the brand coin. And the ability of consumers today to share their opinions of your brand with just a click of a mouse levels the playing field for all and puts your brand in constant peril.

A solid reputation reflects the partners you do business with, the strength of your management team, your company’s financial performance to date and, ultimately, the types of employees you hire and will hire in the future. But literally millions of customers and prospects engage in social communities on the Web today. Facebook alone has 50 million community members, with over half of them logging in daily! Couple that with the ease and ability to create a quick video or podcast, or post a negative comment on a blog, and you have a recipe for reputation disaster.

Unfortunately, when a reputation disaster occurs, it is becoming more difficult for your PR team to execute using the usual crisis management playbook, because the type of media, placement of media and approach to each medium differs. This fragmentation means it will become increasingly difficult to neutralize criticism and restore reputations when something happens.

Additionally, the Internet already has built-in, automatic reputation ranking systems. Currently examples are Google for companies and eBay for vendors. These ranking engines are quickly becoming extremely effective ways for people to determine how reputable your company is before deciding whether to do business with you.

The bottom line: As media continue to fragment with the explosion of yet more social networks, aggregators like Google will become increasingly important in helping users decide whether or not to do business with you.

So what is a company to do?

I recommend a three-step approach to reputation management called “MRO”:

1. Monitor – Companies should designate an employee or hire an external service to monitor, moderate and drive positive discussions.
2. Respond – Technical staff should be designated to respond to any product or support issues that arise from communities and take the lead in responding with action plans to any negative sentiments that develop.
3. Optimize – Companies need to proactively optimize their reputation online over time by exploiting the positive aspects of their brand (an example here is GE, whose Ecomagination is demonstrating the company’s commitment to keeping the environment clean).

Each MRO element is designed to give you a point person for this reputation-protection trifecta:

Monitor gives you a way to see and engage in conversations before they get out of control. People will be a lot more polite online when they know you are listening. The challenge is learning about conversations that arise quickly. This is where you need reputation bulldogs, who can be out there watching all the time.

Respond gives you a dedicated point person internally who can talk about your product or service with authority and provide clarity on how you might resolve an issue. As I said above, this should be a technical person rather than a communications person. This will convey the company’s commitment to address the issue.

And finally, Optimize. Optimizing your reputation in the marketplace means you go beyond just keeping it on track. You invest in the online aspects of your reputation just as you invest in other dimensions of your brand.

Having a strong brand doesn’t mean you have a strong reputation. Ignoring this critical factor is a risk that companies can’t afford to take today.

Managing Reputational Risks across the Global Supply Chain (By Jarvis)

In the wake of well-publicized poisonings from pet food, toothpaste and drugs, China is now widely believed to have a food safety problem.

And the “Brand China” trust problem threatens their place in the global supply chain. Do you find yourself checking the country-of-origin labels in the fruit and vegetable section at Costco? In the same vein, one wonders how long it will take for pet food brands to begin touting “all-American made” ingredients.

What’s happening in China highlights a key principal applied by the Trustmeisters here in the Reputation Garage: Trust problems are at their heart organizational performance issues. To mitigate the risk of a serious trust event, you must put reputation into a performance management framework – managing it with the same rigor applied to other performance issues, such as quality and cost control.

And, yes, China is taking action. Step one in their trust recovery program: Show that you are serious about the corruption that led to the problems, in this case by sentencing to death the head of your food and drug oversight organization. To maintain decorum, we’ll give no comment on this one, but we could! Step two: Increase public protection by setting up a national food recall system. Step three: Communicate concern and your willingness to work and dialogue with interested parties across the global community.

China’s fix is of course reactionary – these are moves taken to dampen an escalating crisis of confidence amongst both producers who source in China and their downstream consumers. It will take months and years before the effectiveness of any changes is known.

The more important question for would-be brand Trustmeisters is this: How confident are you in your ability to police the behavior of your overseas suppliers? If the answer is “not very,” then be prepared for some potentially nasty consequences.

Just look at the impacts of the recent crisis on the U.S. pet food industry:

1) A costly recall.

2) Announced programs (expensive ones presumably) by some companies to test all of their ingredients.

3) Widespread bad publicity that has not only damaged brand trust, but also alerted consumers to the fact that many pet food brands are really just re-marketers of the same globally-sourced ingredient mix. This will likely send more pet food brands into the off-price commodity bins at places like Wal-Mart.

4) According to today’s Wall Street Journal, weaker companies may not survive this crisis, and we should expect to see further consolidation in the pet food industry as stronger players capable of imposing more rigorous quality control gobble up the also-rans.

A word to the wise: China’s recent problems will not be the only road bumps over the course of what many economists are calling China’s century. Which is why we never tire of saying it: Hope is not a strategy. If you haven’t put the issues of trust and reputation into a performance management framework, what are you waiting for?