The most recent Wells Fargo scandal has increased the public’s distrust of big banks.
A new survey, conducted by Aspiration, shows that one company’s PR crisis can damage the reputations of its competitors. That means a problem at your neighbor’s house can quickly become a problem for you, too.
According to the survey, 14 percent of Americans trust big banks even less than they do Charlie Sheen and Tiger Woods.
It found that Wells Fargo is the least trusted bank, with 44 percent of Americans trusting it less than other financial institutions. Those other banks are not off the hook, however. The survey found that 38 percent of Americans under 35 are less likely to trust their own bank due to the Wells Fargo revelations.
More than half of Wells Fargo customers (51 percent) would be willing to switch to another bank if they thought it was more trustworthy.
Self-inflicted crisis; botched response
Wells Fargo employees opened more than 2 million banking and credit card accounts without customers’ approval over four years. Some called the bank’s reaction one of the worst handled PR crises of last year.
Wells Fargo executives initially didn’t take the problem seriously enough. The bank’s communicators couldn’t get the story straight, and the company’s response was perceived as dishonest. Plus, no heads rolled until CEO John Stumpf finally resigned.
Wells Fargo faced millions of dollars in fines and remediation to customers, and the bank faced federal investigations and congressional hearings. The fallout has cost the company trust and customers.
The Wells Fargo scandal has damaged confidence in all of America’s financial institutions. Of the two-thirds of Americans (66 percent) who are familiar with the Wells Fargo scandal, 36 percent now trust their own bank less—even if they are not Wells Fargo customers themselves.
“There’s a lesson here for every industry,” recommends Shel Holtz, principal of Holtz Communication + Technology. “If a competitor is at the center of one of these scandals, you should start work immediately to differentiate your company.”
For example, corporate communications teams at other credit reporting agencies—such as Experian and Transunion—have not done enough following the Equifax crisis, Holtz asserts. Consumers will understandably be wary of all consumer credit reporting agencies because of the massive Equifax data breach.
Here are four tips experts recommend to safeguard company reputations:
- Educate top leaders about how corporate reputation affects shareholder value. Research shows that strong reputations enhance stock values.
- Pay attention to how stakeholders view competitors and peers. Show exactly how they are perceived and point to your relative strengths and vulnerabilities and how they can be addressed through improved performance and messaging.
- Use comprehensive social media monitoring to spot emerging PR crises before they explode. Regularly evaluate your public reputation through social media measurement. Measure public sentiment to compare your brand’s reputation against your competitors’ reputations.
- Consider how every management decision might affect corporate reputation. How will each move be perceived by the public?
The Wells Fargo PR crisis has tainted the reputations of other large banks—even those that have done nothing wrong. This serves as a powerful reminder that one company’s scandal can affect an entire industry.
Astute PR pros can protect their brands by continually monitoring public sentiment and distinguishing themselves from wayward competitors.
A version of this post first appeared on the Glean.info blog.