On the heels of a Nielsen IAG study urging financial institutions to advertise more to build consumer confidence, Thomas Riehle, managing partner with D.C.-based polling firm RT Strategies, told Marketing Daily that financial companies must not only do more advertising and public relations, but must also address the issues that are currently on consumers' minds.
"You have a moment when people want to hear from you," he said of the financial firms--but most consumers "are not hearing anything.... The one group of people that has everyone's attention is not using the opportunity."
Riehle's firm, in conjunction with communications agency Waggener Edstrom Worldwide, just polled 1,000 U.S. adults and found that 38% of them had received no direct communications from the industry; 44% had heard something from the industry but then felt more negative about it; and just 11% had heard from the industry and then felt more positive.
That last figure, according to the study, suggests that "authentic and credible communication ... positively influences widely held opinions about the industry overall." A similar conclusion was reached recently by Boston Consulting Group, which found that financial services providers could diminish defections simply by communicating honestly with their customers.
Yet, Riehle noted, consumers have largely been hearing from financial services firms through "product advertising as if there is no crisis going on, or media coverage when you're on the defensive." But what consumers really want, he said, are straight answers to two questions: "What were you thinking? How are we getting out of this?"
Since they are not getting those answers from the industry, the public has largely put its faith in government. The RT/Waggener poll found that 69% of Americans believe President Obama is doing more to address the current financial system than banks and the financial services industry (12%); 57% credit Congressional Democrats with doing more, versus 18% for the industry; and Congressional Republicans also beat the industry, 39% to 25%.
These results, combined with a "crisis in confidence in the leaders of banks and financial services companies," means "very bad news for the financial sector going forward," Riehle said.
Indeed, in 25 years of polling about industries of all kinds, Riehle said, he has never seen scores as low as the 4 to 1 negatives received by the financial services firms. Even "run-of-the mill corporations" that spend money on advertising and PR usually get 4 to 1 or 5 to 1 positive scores from consumers, he said.
Only 8% of the poll respondents expressed full confidence in banks and financial services companies--a steep fall from the 31% who reported full confidence in a 2006 study by the University of Chicago National Opinion Research Center.
Riehle's suggestion for the industry? The largest companies, he said, should quickly put together a white paper detailing "what we've done in the past few years, and what we're doing to get out of it."
"People are waiting to hear from them," he said. "A big part of the problem is just silence."
And the wrong kind of communication can hurt. Riehle should know. He just received a postcard from the AIG Private Client Group declaring: "We Know Risk."
James Gregory, CEO of CoreBrand, notes that even "the best campaigns cannot overcome bad business decisions or poor management." According to CoreBrand, a brand crisis occurs when the brand's consumer favorability declines quickly and significantly at the same time that the brand's familiarity increases. Thus, AIG has become a "brand crisis defined."
"The AIG brand name is done," declares Riehle.
Yet other brands--particularly banks--may still have plenty of life left in them.
For example, the consumers polled by RT and Waggener were found to be split down the middle over what banks are doing with the Troubled Assets Relief Program (TARP) funds received from the federal government:
• 28% said the banks
are using TARP funds to make consumer loans
• 27% thought the banks were holding the funds in reserve
• 23% said the banks are using the funds to make business loans
21% thought the banks were using the funds to pay salaries and bonuses for their executives.
"Despite the overwhelmingly negative media coverage of the industry in the past few weeks, it was surprising to see that consumers still express a fairly balanced view of the industry and even acknowledge some of its recent positive contributions to economic recovery," said Torod Neptune, senior vice president and global public affairs practice leader of Waggener Edstrom Worldwide, in a statement.
"Clearly there lies a huge opportunity for financial services leaders to step forward in the midst of this storm -- but they need to proactively communicate."