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Sometimes The Giants Shoot Themselves: Wells Fargo Illustrates the Importance of Trust

As giants go, Wells Fargo was a big one. In 2008 it became a coast-to-coast super-bank with $1.4 trillion in assets and 48 million customers. From there, Wells Fargo grew to the point where it became the largest mortgage company in the country, providing one in every three home loans. 

Everything should have been awesome. But it wasn’t. Things began to go catastrophically wrong, and people – Wells Fargo customers and the general public – felt like they couldn’t trust the bank any more.

Side-Eyeing the Giant: What Causes Trust to Be Lost?

In the course of my research into how customers gain and lose trust in brands, I’ve seen several companies – giants, if you will – stumble through a scandal, recover, and emerge smarter and stronger. The opportunity was there for Wells Fargo to move past an admittedly massive fake accounts problem successfully. 

But that’s not what happened. Instead, during the pandemic, Wells Fargo unfairly denied hundreds of struggling homeowners loan modifications. The number of foreclosures, along with heartbreaking stories of families losing their homes, dominated the news cycle for months. The bank blamed their software, but from the public’s perspective, the giant stumbled again. When Wells Fargo had to pay 1,800 homeowners over $12 million in compensation, that made headlines too.

No Trust, No Love: What Are You Going To Do When You’re Your Only Friend?

Wells Fargo lied, cheated, and made little kids homeless. That’s a lot to come back from, particularly in terms of customer trust and love. Wells Fargo is no longer the biggest bank in the country. They’re third – and the new leadership is talking about not being tethered to past ambitions. They’re no longer interested in being #1 simply for the sake of being #1 – which is exactly the sort of sour grapes rhetoric you get from a brand that knows it’s never going to be on top again. 

That being said, there’s a lot to be said for right-sizing an organization during troubled times. If you have parts of your business that carry great potential to leave you looking like a bad guy unless a number of unlikely things happen perfectly, it is a good idea to stop those parts of your business. In other words, make choices that build the trust you have with your customers. 

To this end, it’s encouraging to see Wells Fargo focusing on their existing customer base and communities where their bank already has a presence. Maintaining strong relationships requires effort even when everything is great. When the boat is rocky, it’s a little harder to keep everyone on board. An increased emphasis on customer satisfaction makes a lot of sense right now. 

Will Wells Fargo stabilize after shrinking – or even start to grow again? 

If the answer to either of these questions is Yes, we will need to see the bank begin behaving in a way counter to its behavior for decades now. It will require radical change to bring the brand into a position where they’re both trusted and loved. But in this world, anything can happen – and I can’t wait to see what does. 

What do you think? What does the future hold for Wells Fargo? What would it take, in your eyes, for the bank to become more trustworthy? I look forward to hearing your thoughts. 

Source

https://www.bloomberg.com/news/articles/2022-08-14/wells-fargo-to-cut-back-mortgage-business-after-scandals-take-toll

August 22, 2022 by

Brand Trust: How to Build and Protect Your Most Important Asset in 2022

Of all the factors that go into creating Brand Lovers – those shoppers who will come to your store time and time again, even when they have other convenient options – trust is the one that’s entirely within the brand’s control. No matter what’s happening in this world, you can always choose to be trustworthy.

Every single interaction you have with your customer is an opportunity to demonstrate trustworthiness. There are a couple of ways to illustrate this idea. Let’s pick two – pricing and policies – to point out opportunities to create trust.

Pricing & Policies –  Understanding The Infrastructure of Trust

Pricing first. No matter what you’re selling, from diet soda to diamond tiaras. Your customers are going to be aware of the price. Trust is established, at least to a minimal degree, if the price they encounter aligns with their expectations. When things don’t line up, trust starts being damaged right away. If a diamond tiara only costs $20, you don’t trust that it’s the real thing. This can work in your favor. If you’re a specialty gourmet foods retailer, let’s say you might be able to sell a diet soda for $20 to the connoisseur looking for a particularly unique flavor. They may have never heard of the brand, but they’ll buy it because they trust you & your store. That being said, if they pay that $20, that diet soda better be the best one they ever had.

If your pricing deviates significantly from the market, there needs to be a credible reason why your customer won’t trust your prices. And if your prices can’t be trusted, the relationship you have with this customer will not go too far. More than half of all shoppers price check; two-thirds will check prices online while shopping in-store. Is Will having trustworthy prices close the deal? Not necessarily, but even the opposite appearance will lose your business.

The Power of Policies

Policies are precisely what I’m talking about when we get into discussing the infrastructure of trust. Every business has policies – how do you return merchandise, is it acceptable to bring a pet into the store, is it necessary to wear shoes in the establishment, and so on. In terms of establishing and maintaining trust, what the policy is isn’t nearly as important as if the procedure is clearly communicated and consistently applied.

Consistent application of policy allows your customers to trust that the experience they have in your establishment is one that they can expect to proceed in a specific fashion. If your fine dining restaurant has a dress code, your guests can reasonably expect to eat their dinner without looking at someone wearing a bathing suit, flip flops, and towel. People who are underdressed can trust that they’ll be able to dine comfortably once they too are suitably attired – and that no one else is getting away with dodging the standard they’ve been asked to meet.

Assuredly, these seem like simple points – but they’re the points that make or break relationships on a day in, day out basis. If your customer retention rate is just not there, it’s a good time to do that close perspective examination of your operation, focused on whether or not your customers trust you on that granular level. If the answer is not yes, the good news is it’s entirely within your control to improve.

March 28, 2022 by

We Don’t Talk About Bruno…What Can Brands Learn From Encanto?

Because I have small children, I have seen The Walt Disney Company movie Encanto about 37 million times. And this experience has made me wonder: does every brand have a Bruno?

We Don’t Talk About Bruno – What’s That About?

A quick summary for those who haven’t seen the movie. Encanto is about a family that has magical gifts. Bruno’s gift was the ability to see the future, which sounds fantastic, but most of his predictions were negative. His family began to believe his predictions caused the bad outcomes, and after one especially notable conflict, Bruno left. Ever since, the family’s most famous song says, we don’t talk about Bruno.

In every group, each person has a role to play. Bruno’s role was that of the truth-teller: the person who, genuinely out of a sincere desire to help, says things other people don’t want to hear. These people are often dismissed from the conversation, brushed off, as Bruno was, as the crazy uncle no one listens to.

Who Is Your Bruno?

What does that mean for a brand? Who is your organization’s Bruno? Who don’t you talk about?

Bruno could be a customer, quick to write harsh reviews pointing out even the smallest flaw.

Bruno could be an activist, loudly demanding your company conduct itself in a way they see as more humane, ethical, or otherwise correct. 

Bruno could be an employee speaking up about working conditions and pay rates.

Bruno could be a manager pointing out that changes need to be made because the in-store experience is suffering.

Bruno could be in leadership, taking a stand and telling the others the organization isn’t going in the right direction. 

In the movie, it becomes clear that Bruno’s predictions weren’t causing the events that happened. He merely spotted the clues of impending events ahead of time and did his best to let people know. But it was easier for the family to become angry with what they were hearing and stop talking about Bruno. 

This dynamic plays out in every human setting, including within our organizations. Perhaps you can think of times within your career when you’ve seen someone who’s been acting as a truth-teller phased out of the organization or otherwise disregarded. This is a thing that happens, but it doesn’t need to be that way.

As part of our ongoing conversation about trust, we need to reach a point where brands trust themselves enough to be able to listen to the Brunos of the world without shutting them out. We have to trust that the people in good faith relationships with us – our customers, our communities, our employees, team, and leadership – tell us things we don’t want to hear because they want us to do better. 

We don’t talk about Bruno, but we have to if we want to grow.

March 22, 2022 by

Social Media and the Power of Public Knowledge

We’re starting to hear the rumbles, here and there, from businesses of every type and every size. Social media, the marketing tool that was supposed to deliver amazing results, doesn’t seem to work very well for some companies. They say effort invested isn’t providing anything much in the way of meaningful results.

The first response seems to be platform flight. Facing Facebook failure, organizations decide to move on. They decide to focus on Twitter, and if that doesn’t pan out, they move onto Pinterest, perhaps, or Instagram.  It’s the digital equivalent of the African Savanna, where the herds are traveling ever onward, perpetually in search of a water hole that will quench their burning thirst.

It’s not a bad strategy, if you’re an elephant.

If, however, you are a company that wants to build meaningful relationships with your customers in a profitable and enduring fashion, it’s a disaster.

So what’s going wrong here?  It’s a simple problem. We’re focusing too much attention on the media aspect of social media, and not nearly enough on the social end of the equation.

Understanding Social Media: The Power of Public Knowledge

Let’s start this whole conversation by saying this: it’s not Facebook’s fault you’re not connecting with your customers. It’s not Twitter’s fault, nor Pinterest’s fault, nor even Instagram’s fault. All of these social media platforms do exactly what they say they’re going to do: provide a fairly easy-to-use way to share your content easily with anyone who wants to listen to it.  If nobody’s listening, it’s not the communications vehicle that’s the problem. It’s the message.

In other words, don’t blame the radio if nobody dances when your band’s song plays. The people have proven that they’re willing to dance — if the music has the right beat. When a song comes on that they like, they dance.

If you want to use social media effectively as a marketing tool, you have to understand, on a fundamental, humanistic level, what causes people to participate in online conversations. Why does someone join Facebook in the first place? What drives them to post their thoughts and feelings? What encourages them to like a company page, to comment on that page, and to share the content they see there with others?

Steven Pinker has some great answers. We encourage you to watch this video — it’ll take about 10 minutes of your life, but it’s 10 minutes that will make you a better marketer. Of particular interest is the bit on public knowledge.  It starts at about minute 8.

Watch that, and then think about the Arab Spring revolutions that rocked the Middle East. Pinker points out that it’s the phenomenon of public knowledge that sparks community action. What we learned from the Arab Spring is that social media is an ideal vehicle for creating public knowledge.

Knowing that someone else has the same knowledge you do, and is experiencing similar emotions as a result of that knowledge, is an extremely empowering and motivating experience. Dominant organizations have learned the lessons of Arab Spring, strategically using their social media presence to create the experience of public knowledge within their target audience.

Harley Davidson is doing this on Facebook with their Harley Davidson Worldride Campaign. Go to their page and check it out. During a two-day event, where Harley riders are “taking over the world,” fans are encouraged to log in and share how many miles they’ve ridden. So far, the results have been astronomical — the total miles would bring you to the moon and back!

This is public knowledge in action. Riders are sharing their distances, true, but they’re also sharing their experiences. They want to tell what a good time they’ve had. Hearing about other people’s good times on the bike motivates those who haven’t gone riding lately to get the hog fired up so they too can participate. Even the people who can’t go are logging in to share their support, explain why they can’t participate, and offer encouragement to those who are riding.

Real world activity can, with the proper, strategic encouragement, drive social media activity, which in turn can drive real world activity. That’s the power of public knowledge. It transforms governments, it builds brands, and it is the only thing that’s been proven to change the world. If your organization isn’t tapping into the power of public knowledge now is a good time to start. Give it a shot before you give up on your latest social media endeavor. You’ll be glad you did.

June 26, 2012 by