"Right now, consumers' opinions of all financial brands are very low," says Laura Ries, president of Ries & Ries, a brand consulting company based is Roswell, Ga. "It's like when you have a major airline crash--people are afraid of every airline, because they're all the same--they can all have crashes."
It's the same with just about every sector of the finance industry. "Some of these companies said at some point that they were fully liquid, and now look. The smartest ones are laying low, because the last thing you want to do is be out there advertising, 'Hey, we're okay' if it turns out you might not be."
Two brands that seem to be doing well so far are Bank of America, which acquired troubled Merrill Lynch, and Wells Fargo.
"People are extraordinarily angry at these companies, and measures of consumer trust in the financial world is eroding faster than a sandcastle in a rainstorm," says Robert Passikoff, head of Brand Keys, a New York-based research consultancy that focuses on customer loyalty. "The value on banks and financial institutions is the lowest we've ever seen."
Passikoff believes it will take these brands between 5 and 10 years to rebuild consumer trust. "This has fundamentally shifted consumer perceptions of financial service companies."
YouGovPolimetrix's BrandIndex, a research company that tracks the perception of leading consumer brands, says that for September, while most financial companies had a "buzz" measurement of around zero-which means there was just as much negative perception as positive--Bank of America's score jumped 565% from 2.6 to 17.3 earlier this week. And Wells Fargo rose from a 0.8 score to 7.2 earlier this week--a gain of 890%.
Not surprisingly, the brands that dominated the "Wall Street debacle" headlines--Goldman Sachs, Morgan Stanley, and Merrill Lynch--were all regarded as extremely negative.
And while the attention in most recent weeks has focused on investment banks, with consumer ire lasered on issues of executive pay, they haven't forgotten--or forgiven--companies that are viewed as especially responsible for mortgage and credit disasters.
For example, Americans for Fairness in Lending, an advocacy group, released testimony of two former employees of MBNA, now owned by Bank of America, saying the company required them to strong-arm consumers deeper into debt.
Add it all up, and you've got an anti-Wall Street zeitgeist that's powerful. A Bloomberg/Los Angeles Times poll released earlier this week found that 55% of Americans say no taxpayer money should be used to bail out private companies, even if their collapse would damage the economy.
The poll also found that in addition to blaming President George Bush, people are angry with Wall Street. But how they will channel that generic rage against individual companies, Ries says, depends on how responsibly companies maintain their visibility during the crisis period. "While it's important for companies to get out in front of consumers," she says, "the best thing is to fight a PR war with PR, not with advertising."
Still, she predicts, "while this looks like a disaster short-term, there will continue to be a banking and investment industry. The kinds of brands that get killed by something like this were the weak ones anyway--people aren't about to start stuffing their money under the mattress. They will forget about this, and move on."