In The Trust Edge, author David Horsager says, “Trust has the ability to accelerate or destroy any business, organization, or relationship. The lower the trust the more time everything takes the more everything costs, and the lower the loyalty of everyone involved. Trust, not money, is the currency of business and life.”
Today, when news travels fast, and what a company does, good or not can be instantly amplified; an organization can win or lose in a tweet second! Redeeming trust once it’s lost is an uphill challenge. And it comes with a high cost.
In the last several months, UBER, Wells Fargo, Facebook, United Airlines, the list goes on, have broadcast ads, print, radio, television, trying to atone for mishaps and very public and unfortunate “mistakes.”
Companies are spending millions of dollars on advertising campaigns and apology ads and, to be believed, they need to be perceived as authentic and address solutions if they are going to be effective. As Gene Grabowski, partner at kglobal warns, “Apologies should be treated like spices you add to a dish…You don’t want to overdo it.”
Many of us are not 100 % buying their apologies. According to Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management, “these are all classic apology ads.” Whether they will inspire forgiveness is another matter.
Tony Calcao, executive creative director at the advertising agency CP+B, says “an effective apology ad addresses the “elephant in the room…. If you want to get those customers back, you had better acknowledge that you screwed up.”
Unfortunately, the ads that some of these same companies are broadcasting, on television, in newspapers and magazines fall short in terms of perceived sincerity. In the Facebook ad, the company doesn’t own up and take responsibility for the spam, clickbait, fake news, or data misuse and never mind the Russian “incidents” during the election. Saying “and then something happened” after the huge trespasses against consumers is not enough!
While they promise a change: “From now on Facebook will do more to keep you safe and protect your privacy.” Mr. Calkins comments, “The risk in the Facebook approach is that people may say it’s an insincere apology, and the company isn’t really taking ownership of their issues.” Mr. Calcao adds, ”I would have preferred to know exactly what they were doing differently. Tell me exactly what it is you fell down on.”
The UBER commercial does not mention UBER’s shortcomings with harassment and it ties the ad to its present CEO, which is not considered the best strategy. “They’re certainly not addressing any issues the brand has had in the past.”
Wells Fargo’s numerous scandals over the last couple of years haven’t let up yet. It seems there is a new scandal every six months, which I have written about on many occasions, including their latest with employees doctoring expense accounts.
Wells Fargo’s latest ads and they are going all out on television, radio and print, remind us of their origins in 1852 when their stagecoaches delivered mail and money. “Over the years, we have built on that trust. We always found the way, until we lost it.” In the commercial, the company notes that it is “ending product sales goals for branch bankers,” referring to the unrealistic sales goals that put pressure on employees to sign customers up for accounts they didn’t want.
However, while Wells Fargo does acknowledge some of its mishaps, have they gone far enough? According to Andrew Gillman, founder of the crisis communications firm CommCore Consulting Group, the commercial skates past most of what Wells Fargo did wrong. From his perspective, the transition from “we were great, then something happened, now we’re great again,” seemed too abrupt.
Gui Liberali of the Erasmus School of Economics in Rotterdam and Glen L. Urban and John Hauser at the MIT Sloan School of Management may not agree. They claim that it’s simply not enough to tell consumers that they can and should trust a company. From their perspective, it’s critical to actually prove, again, and again, that a company and its products can indeed be trusted.
Trust is earned by listening to and respecting the customer’s voice.
There is also a big difference between promised “trust” and a genuine and sincere, proven “trustworthiness.” To get to trustworthiness one has to make genuine internal changes. With the repeated “incidents” we keep seeing at Wells Fargo it’s pretty obvious the internal changes that lead to trustworthiness are not being made.
Michael Gordon, chief executive of Group Gordon, a corporate and crisis-communications firm, concurs, “an apology is only as good as the actions that follow. What’s more important to the consumer is the action. They don’t want to see the same mistakes repeated again.”
Specifically related to Wells Fargo, Nick Kalm, an experienced reputation builder says, “I very much appreciate that Wells Fargo needs to push the reset button on its self- inflicted damage to its reputation. That said, I don’t think its current ad campaign hits the mark.” Of the recent two page ad in the wall street Journal he says, did no one at the Bank or its agencies realize that “authenticity” was a value they most need to manifest?”
Regardless of the hundreds of millions of dollars that the companies I’ve mentioned have spent on ads, they still lose. Wells Fargo will probably never grow as fast as it did before the fake accounts problem. It appears consumers opened 35% fewer checking accounts with the bank this March than they did the same period last year. That represented the bank’s seventh straight month of declines. Credit card applications also fell 42% during the quarter.
[bctt tweet=”Trust is a company’s most valuable asset.” username=”RichardMBowen”]
Trust is a company’s (or an individual’s) most valuable asset. We may forgive, maybe. However, when it is lost it costs and it’s a real challenge to earn it back. We want to do business with people we trust and this is especially important if they deal with our privacy, security and/or our finances.
[bctt tweet=”When trust is lost it costs and it’s a real challenge to earn it back.” username=”RichardMBowen”]
By all means, I’m for giving the companies in question the benefit of the doubt, that they do mean well. Yet, not till I see real sincerity.
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
