Ragan.com's Christine Kent tells us today what to do
Months of news reports about million-dollar office renovations (Merrill Lynch), Super Bowl carnival parties (Bank of America), and junkets to Palm Beach and Las Vegas (Morgan Stanley and Wells Fargo respectively) have raised the ire of the media and the public to apoplectic levels.
“Companies that have gotten bailouts continue to make a mockery of taxpayers,” said New York Times columnist Maureen Dowd earlier this month. And President Obama, discussing the enormous bonuses that bank execs received in 2008, said, “That is the height of irresponsibility ... It is shameful.”
How, oh how, could financial institutions possibly extricate themselves from this PR debacle? There are short-term fixes, and then there are long-term fixes, say PR professionals—assuming the banks really want to improve their reputation. Here’s the prescription for getting financial institutions ahead of this fast-moving story.
Uncover problem activities before the media does: “The communications people need to be in a position to hear about things beforehand,” says Don Middleberg, CEO of New York’s Middleberg Communications, which has a financial services practice group. “They need the authority to go to people before dumb things happen, and say, ‘You can’t do that.’”
By now, says Middleberg, any PR person for a financial services company should be asking whether execs are involved in certain “hot-button activities.” It’s not too hard to come up with a list of key words that PR pros should be asking banking execs about—items like “junkets,” “Vegas” and “private planes” should set off alarms.
Bring PR into the boardroom: And how do PR people get the advance word on potentially stupid moves by their employers? They need to be working at the highest levels of the company—something that PR people have been demanding for decades.
“I do not understand why PR people are not on boards of directors,” says Middleberg. “Given the damage that’s been done, wouldn’t it have made sense to stop the damage before it happens?”
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| John Thain |
Take pains to explain: Contrary to the example set by former Merrill Lynch CEO John Thain, who didn’t even bother trying to explain why he spent $1.2 million on redecorating his office, financial institutions need to talk about why they’re taking certain steps that come across as extravagant or consumer-unfriendly.
For instance, says Matt Wolfrom, executive VP of the corporate practice at PR agency Cohn & Wolfe, banks have been raising credit card interest rates to boost weak profits—and media coverage has been less than sympathetic. “It’s a necessary business activity, but it’s one that’s not being explained,” says Wolfrom.
Show some sympathy: “Right off the bat, you need to tell the press that austerity measures are in place and you understand the public’s concern,” says Joseph Dans, a former banker and credit union exec who is now president of Rogue Wave PR in Warwick, N.Y. “Once that’s done and trust is built up—and you are making money—you can remind the press and other folks that certain marketing expenditures are legitimate.”
Become see-through: “Banks should focus on being transparent about what they’re doing with their bailout money,” says Abigail Gouverneur Carr, managing director of BlissPR in New York. “The public is craving information on what these banks are doing with their money.”
Carr’s firm is currently working with a bank that’s getting some bailout money, and has taken pains to produce data showing that the bank has loaned 10 times the amount of funding that it has received. “It’s not easy to get these numbers,” Carr acknowledges, given the complexities of financial reporting. But better that you crunch the numbers before the media does.
Offer a healthy dose of reality: Well-paid execs who fly around in private planes aren’t exactly new, says Carr. Some of the activity that has so inflamed the public “is business as usual—we’re coming off several years of a bull market,” she explains. “But the external world changed quickly, and the institutions didn’t change quickly enough.”
It’s up to the PR pros to offer some straight talk to financial execs who seem baffled about why they can’t party like it’s 2003. A new Cohn & Wolfe study shows that 64 percent of consumers say they’re pessimistic about the economy, while only 20 percent of financial services employees feel the same way. “It’s clear that there’s a wide gulf in perceptions,” says Cohn & Wolfe’s Wolfrom.
Speak in one voice: Mark Kollar, partner at CJP Communications, a New York firm specializing in financial services accounts, says banks won’t get ahead of this fast-moving story unless they’re consistent. “We’ve been made well aware of what a global economy we have,” says Kollar. “The banks need to make sure their PR messages are the same in New York as they are in London as they are in Tokyo.”
Enlist employees: In tandem with getting consistent messaging, adds Kollar, make sure employees are getting the same messages—and that you’re not ignoring their concerns or complaints about the institution’s financial challenges.
“Those who have the jobs in the company are the ones who can help rebuild the brand,” Kollar says. The flip side of this, he adds, is that unhappy and uninformed employees can also drag the brand deeper into the muck (via blogging, for example).
Talk up the good stuff: “There’s a real appetite now for good news,” says Carr. Where they can, banks should tell stories about what they’re doing to help businesses and individuals get through tough times.
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