Wells Fargo: An Expensive Example of A Company Trying to Recoup Its Reputation
I recently opened up USA Today to a two-page centerfold ad by Wells Fargo that read: Established 1852, Re-Established 2018.
A series of paid advertisements were written under the following headlines:
- Wells Fargo Retail Bank compensation plan eliminates product sales goals
- Wells Fargo names new independent Board of Directors
- Female Chair at Wells Fargo, a first for a top US bank
- New Wells Fargo structure focuses on customer experience “Change for the Better”
- Year of transformation at Wells Fargo
Shortly after that, I saw a 60-second TV ad, artfully written with high-end videography. On my drive home, I heard the message again on the radio. Everywhere I turned, Wells Fargo was trying to reassure me that they had lost their way but were working hard to get back on track.
All of this is part of a multi-million dollar campaign called Re-Established, an attempt by Wells Fargo to recoup their 166-year-old reputation rocked by bad corporate behavior and a fake accounts scandal.
The costs are much more than monetary.
The scandal has generated several federal investigations with likely more to come. It cost their CEO his job and ushered in a new Board of Directors. While Wells Fargo has settled a class-action suit, the litigation may not be over.
In response, the company has rewritten its policies, hired 2,000 new risk managers, rededicated itself to a set of corporate values that — at least on paper — put customers ahead of profitability, and apologized for and taken steps to remedy fraudulent practices.
The question is will it be enough to restore the public’s trust in a once well-established, venerable brand? Only time will tell.
What can the rest of us learn — and what should we do?
Behavior counts and bad behavior gets attention. Wells Fargo discovered the importance of reputation management the hard way. So, what can the rest of us do to avoid burning in this unwanted spotlight? At PPO&S, we believe it starts with being proactive about how one’s organization is perceived. Recognize that:
- An organization’s reputation is its most valuable asset. It drives whether people want to shop with you, bank with you, and whether employees are proud to tell their families and friends that they work for you. When incidents do occur, the threat to eroded customer confidence, employee loyalty and the public’s perception is real and costly. Organizations that take the “trust factor” seriously are organizations better prepared for the inevitability of turbulent times.
- Trust goes to the core of every relationship: Our relationships with each other, with our government institutions and with the businesses we patronize. People who know you before a crisis hits will decide whether they can trust your organization again. If people don’t know you before a crisis occurs, chances are the crisis will define you.
- Investing in the protection and enhancement of a reputation is good business. Continually assessing where an organization needs to adjust policies and behavior going forward is a strategic investment. Smart organizations, attuned to the public’s demand for transparency, continually take inventory of their own policies and practices looking for gaps and soft spots.
- Incidents like the one at Wells Fargo bring additional scrutiny not only to themselves, but to others in their industry. People may ask, what are your business practices? Are there similar trends in behavior that we should worry about? Others may be asked to account for their own practices in order to reassure customers and the community that we can trust them to do the right thing.
There has never been a more pivotal time for organizations to take a hard look at whether they are doing everything they can to carefully manage their reputations. From young start-ups to a time-honored brand, a reputation is everything that matters.