Archives for posts with tag: TARP

Yes, we all fall down. We all make mistakes. We fail, we get up, succeed, just to fail again.

  • A boxer that gets knocked down, just to get up again and continue the fight.
  • A rocket that fails, just to launch successfully later.
  • Evel Knievel, crashing with his bike, just to be helped up again.
  • Popeye, knocked out, revived by spinach.

Great commercial. Tapping into popular culture and the emotion many Americans are feeling right now after they fell down. Battered and bruised. But ready to get up and fight again.

But it’s a commercial that shouldn’t have been written for GM. It should have been made for a company that made one huge mistake and tries to move on from there. It might have worked for Nike when they were associated with sweatshops. Nike is a well-run company with an innovative spirit. Sure, they fall down. Like we all do.

GM didn’t fall down. GM’s demise was decades in the making. It was based on being not in touch with the desires and needs of people, their arrogance of not watching the competition closely and, maybe most importantly, how GM’s structure and culture related to its strategy. When I started working with Mercedes-Benz in the 90’s, their executives were already talking about the future demise of GM.

You can create beautiful commercials (as to be expected by Goodby) but if your message is at its core intellectually dishonest, you still waste your money. And create an uproar on conservative blogs and in comment sections on various Social Networks:

“This makes me SICK. I don’t owe auto workers union members a retirement, medical care, or ANYTHING else. I will NEVER-NEVER-NEVER own a GM product.”

“One major difference GM. Everyone that you showed getting back up, did so on their own.”

“It does take courage, because GM just slapped taxpayers in the face. Should thieves make commercials expressing gratitude to their victims?Most companies wouldn’t make this because the bailout resides in so many moral hazards it was inconceivable. Perhaps we’ll see more of these ads in the future now that the precedent’s been set.”

“This makes me sick to my guts. GM could never get approved for a loan from a bank, but small businesses and individuals get laughed at when they need help.”

Instead, GM should have stuck with the tone of its initial apology letter:

While we’re still the U.S. sales leader, we acknowledge we have disappointed you. At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster. We have proliferated our brands and dealer network to the point where we lost adequate focus on our core U.S. market. We also biased our product mix toward pick-up trucks and SUVs. And, we made commitments to compensation plans that have proven to be unsustainable in today’s globally competitive industry. We have paid dearly for these decisions, learned from them and are working hard to correct them by restructuring our U.S. business to be viable for the long term.”

Oh, and Randle D. Raggio from HBR disagrees with me.

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face it: Nobody is more hated than Wall Street and the banks associated with the financial crisis and TARP. These emotions are based in reality: People feel they are paying for the mistakes of the banks, the banks have escaped punishment, get preferential treatment from the Federal government, and continue to reap benefits/pay bonuses.

Pre-Lehman, all banks tried to build emotional trust by showing smiling employees, happy customers and surround their communications with happy music, inviting colors, babies and dogs. The warm-and-fuzzy path. This might have somehow worked pre-Lehman when we considered banks as partners and service providers.

From partners to enemies

When banks transformed from partners to enemies, people started to look closer at bonuses, at their own bills and the fees they are forced to pay. Each new scandal (can you say Foreclosuregate?) reinforces the negative perception and opinion of banks. And, what do banks do? They continue to travel down the warm-and-fuzzy-path. Instead, they need to walk a mile in the shoes of their customers and understand the daily struggle of private customers and small businesses. They need to stop pretending the financial crisis was nothing more than a little bump on the road to economic recovery. For many people, it was and is the Mt. Everest of financial difficulties.

Stop smiling. Start helping.

It’s time for banks to stop smiling and understand the severity of the situation for many people and businesses. There’s nothing warm and fuzzy about the path many people and businesses have to travel right now. Banks need to develop programs and services that help build trust. Stop squeezing your customers with hidden fees and unnecessary penalties. Consider your cusomters as kings and not servants of your marble-filled empire.

In summary, stop talking about how great you are. Rather, let the people talk about the good experiences they had with your brand. Good experiences in the banking system are so rare right now, any shared success story by people could have an enormous impact. Stop advertising a false reality. Start producing a valuable experience for experience.

The biggest opportunity: Credit Unions

Is it the decentralized nature of Credit Unions or the non-flashy nature of Credit Unions that made them not take advantage of the financial crisis and the negative perception of banks? Sure, we have brilliant initiatives but we don’t really experience a unified effort from Credit Unions. They are perfectly positioned for the current mindset of people: local, community-focused and human. Their biggest disadvantage remains that people believe Credit Unions are for specific professions only and have a limited network. Credit Unions need to fight these misperceptions aggressively and continue to tap into their biggest strength: the community of like-minded people.

Financial institutions have to find ways to disrupt the current way of doing business. Clearly, people are not happy with the status quo and starve for disruptive products and services. They have to focus less on delivering profits and focus more on delivering a delightful experience and service. Marketing is much more effective when you have a remarkable product or service. Too many financial institutions continue to focus on their above the line campaigns or the bottom line and not enough on what really counts: the needs of their customers.