Managing Your Bank’s Reputation

What is the word on your street?

Managing Your Bank’s Reputation

There was once a time, in the not-so-distant past, when banks of all sizes didn’t have to worry about their reputation in the community, let alone the nation.  However, with the continuing and increasing use of the Internet and social networking sites to gather information and feedback from consumers, managing your bank’s reputation is a little trickier and the reality is that not enough banks are utilizing Customer Relationship Management (CRM) tools, nor are they building CRM projects into their marketing budgets.  This could prove to be a costly mistake.

In today’s climate, the ethical standards by which a bank conducts itself (governance) is as important, if not more important, than its products and services offerings.  According to a Reputation Analysis conducted by the Reputation Institute, “how a company behaves with respect to ethics and transparency in its business dealings is the most influential factor in a bank’s reputation, accounting for 15.9% of the overall score, edging out products and services, at 15.7%.”[1] This, of course, comes after the recent bailouts and economic crises this country has faced.

One way to manage your bank’s reputation is to appeal to your audience in new and distinct ways.  Offering “green” products for instance, may have been enough to change the mind of consumers in the past, but in today’s climate, banks need to offer these products and promote them in such a way as to appeal to the beliefs and values of its consumers.  And right now, people want to hear about corporate citizenship, perceived workplace environment, leadership within the community, as well as the innovative products and services that are being offered.[2] Banks need to combine the story of their bank and how it is reaching out to their community, while simultaneously offering new and innovative products and services.  Even more so, banks need to apply marketing dollars to tracking customer feedback, whether it appears on their own website, on social networking sites, or on blogs.  Knowing what is being said, where it is being said, and who it is being said by, can help banks increase their perceived reputation and aid in controlling what is being said about the institution.  In other words, banks need to be in command of the conversation, rather than reactors to it.  Being ahead of the trends, genuinely listening to and responding to customer feedback, and quickly employing new marketing tactics and messaging can help a bank overcome the reputation obstacles they are facing in both online and offline communities.

Why is this important?  The reputation of banks and financial firms has dropped considerably since 2009.  “Less than a third of Americans surveyed at the end of last year said they trusted banks to “do what is right,” down from 36 percent a year earlier.”[3] And as employment rates continue to rise into the new year, bank reputations may continue to decrease in the eyes of the consumer if proactive measures aren’t taken.

2. Ibid

3. Crowley, Kevin.  “Banks’ Reputation Declines Last Year, Edelman Survey Shows.” Bloomberg Businessweek. 17 December 2010. Web.