Run on the Bank's Brand: What Not To Do.

Ouch. At the obvious risk of turning away potential clients that are put off by vulgarism, we can’t hold punches. The marketing and communication strategies that one particular bank is implementing will go down in history as a text book example of a continuous, across-the board failure to be PROACTIVE and anticipatory about the impact of critical decisions.

1. Like every other bank, this one's rocket scientists, and MBA wearing, algorothimic geniuses somehow failed to anticipate the potential change in market environments, explaining their overweighted holdings in funky fixed income assets. And, before I continue, let me apologize to the rocket scientists at that bank who had presciently raised the unheeded warning flags directed to the former and current executive management. And, pardon me for saying so to the Chairman of this behemoth bank, but being in the same camp as Alan Greenspan insofar as pointing to the fuzzy nature of predictive science, isn’t a posture that anybody wants to embrace.

Here’s the point. Two weeks ago, the bank's marketing communications staff initiated a punch out program laying the ground work for across the board interest rates hikes in consumer and business credit cards. The ‘message’ was that the bank would be increasing borrowing on credit cards by 2%-3%.

Lo and and behold, I got my notification today. And what an eye-opener!

My interest rate was upped from 7% to 14.99% on two different cards, a whopping 100% increase in my interest rate, with an aggregate balance of $30,000, and a credit limit of $50,000..which was actually increased only two weeks ago, according to a special thank you email from the bank telling me what a great customer I am.

I’ve been a card holder for 20 years, and I have an 800+ credit score. I’ve never once missed a payment. Yet, I’m being asked to shore up the company's balance sheet, notwithstanding the fact that they’ve got access to hundreds of $billions of Fed money at a rate of 2%.

Raising my credit limit and two weeks later, doubling my interest rate smacks of predatory lending, but at least I'm smart enough to know that the borrowing ball is the wrong dance to be attending. And, we all know that as the litigation against banks and brokerages pick up, the line will be longer than the unemployment lines at GM.

OK. Shit happens. More important: anyone and everyone that takes on debt should understand there’s no free lunch. And so what if the country's top bank is getting a couple of hundred billion of bailout funding..(did the news report say $350 Billion??)from Uncle Sam and Uncle Hank (Paulson), and apparently, without any strings attached..i.e. without making sure that the bank actually makes money available to consumers and business borrowers to keep the wheels of capitalism turning.

Here’s the point i.e brand and marketing messages when a company is in crisis mode; so its a point that should be appreciated by a large majority of businesses, of all sizes.

1. Just like the gurus at the bank either failed to understand, or purposefully chose to ignore risk projections, the same morons are failing to understand that by increasing the cost of loan terms to their best customers, without having any programs in place to appease or address the tens of thousands of exceptions; those that have always paid on time and in full, they are destroying their brand faster than a speeding bullet.

I’m going to be one of those that says “not too big to fail”, and I’m going to tell my credit card issuing bank to take their credit balance and eat it. After all, my tax dollars, and most likely, my future social security entitlements are however indirectly, being used to bail this bank out today.

My guess is that no less than 50,000 of their several million customers will be doing the same over the next six months. That’s $1.25 billion in charge offs, another several billion in write downs i.e. projected interest income, and billions more lost in fees from those that stopped using the bank's brand credit card.

Now lets talk about a topic I raised several days ago; the impact on the brand when a company executes a layoff program as if they were an Appalachian abortionist. Again, I apologize if the phraseology is offensive.

The bank has announced unprecedented, across the board layoffs. Last week, as a professional courtesy, I emailed the six top HR managers at the bank and informed them of a great, and free webinar hosted by LeadershipIQ Guru Mark Murphy on the topic of how to manage layoffs with compassion, and without crushing the enterprise.

Those six individuals rec'd the email, but they were too busy firing people to pay attention to learn how to do it properly, and how to preserve whatever might be left, or so it seems.

How do I know this? In my communication with the 'customer service' staff and trying to understand how my rates could have literally doubled, the nice young girl on the phone broke down in tears and said she was "overwhelmed with hundreds of calls from people all asking why, when interest rates are going down, and the bank has been infused with how many tens of billions, could they be putting their best borrowers out in the rain?."

The young lady said "well the prime rate is going from six percent to nine percent this week, so we have to increase our rates.." The prime rate is actually at around 4%, so I could tell she wasn't particularly well-equipped to address my issue. So I switched the topic of conversation and told her that she might want to find another job before the house crumbles completely. She said she has "absolutely no idea whether she too will be losing her job at any moment." She told me that each of her coworkers had the same fear.

Not a great message to be sending to a customer, especially one with a blog that connects to tens of dozens of investment managers. It speaks volumes as to how poorly the bank's management is managing their staff and (not) communicating important messages. The brand means nothing without having the talent to support the value proposition. Mismanage the talent, and you mismanage the brand.

The remaining shareholders of this particular bank, and the remaining employees that have a managerial role should only hope that management realizes that they have no idea on how to manage a large infrastructure in a time of crisis, and that they need to bring in human talent experts; those that specialize in corporate crisis. If they don't understand these fundamental concepts, the entire management team should be fired, if not taken out and tarred and feathered.

The bank is apparently ignoring two of the most fundamental observations i.e. talent management, recently highlighted by LeadershipIQ's Mark Murphy in a very lively and live webinar that was attended by 1000 HR execs..I don't know if this partiuclar company's staff were too busy to attend, but they were invited, they just didn't show up. Perhaps they don't think they need any insight from an outside expert on this topic, or any other topic.

1. Don't Fire Talented Workers Just to Replace Them with Lower-Paid people. In fact, Citi IS firing high paid, top perfomers, and replacing them with untrained, low paid workers..except for those in the executive office of course. Those guys and gals are staying around to soak up their bonus allotments, which are 'contractually due to them', and now being subsidized courtesy of the billions they are receiving from me and you. Massive mistake.

2. Communicate the company's employment position and strategy crisply and clearly to all. Provide specific training to the managers delivering this message BEFORE the message is delivered. Have a clear message for those that remain.

If only based on the conversation I had on the phone with the customer service rep, is displaying a Total Failure to communicate to the remaining work force and give them a clear understanding of what their job security is.

Sure, nobody can really know for sure what tomorrow might bring, as the bank could simply close its doors tomorrow if the check from Uncle Sam bounces. But, the point is, when a customer service employee tells a customer that she has no idea about whether she will have a job tomorrow, that's not a good thing. The fact that she could not address my particular issue is completely beside the point.

3. Don't do stage-based layoff announcements. Do a full cleansing in one fell swoop. Stage-based layoffs, i.e. announcing a layoff in November, and holding back the January announcement about further layoffs is a recipe for disaster. So far this particular bank has announced three series of layoffs in the past eight months. The company's CEO says "our strategy hasn't changed."

OK, the business climate is changing on a day to day basis, so a company's ability to project out six months out, and consider the changes that might need to be made to workforce might be tough. Somehow, the bank's legion of rocket scientists, the ones that forecast five and ten years out on a variety of investment strategies, are unable to forecast how their own business will fare over the next six months. Will there be a 20%, 30%, 40% or 50% drop in earnings over the next 6 months to a year?. Apparently nobody has a clue.

So far, every single step that the executive leadership has taken suggests they are as out of touch with their own business as George W. was with the realities of foreign policy, and, as was his administration with respect to financial industry regulatory policy. And, so that we cross the aisle, shame on Barney Frank, and every other ill-educated Democrat that championed a mortgage for every voter, regardless of whether they could afford it.

As it turns out, this bank is far from learning its lesson on how to preserve brand integrity in times of crisis. Personally, I don’t care. I’m not a share holder, and I don’t necessarily embrace the same politics or culture as one of its largest shareholders, a Middle Eastern sheikh (actually a prince), even if he is widely acknowledged to be a smart guy, and even a very personable guy.

What’s a brand like this to do?? Here are few simple ideas, although they might be too simple for the complex minds at a global bank.

1. As quickly and easily as you’ve made rash decisions over the past months, leverage your internal resources and introduce a plan that helps your customers manage their outstanding debt. Don’t hit them over the head with a brick, especially after Bush and Co just approved a $25 billion+ infusion. You are almost drowning i new cash. How with a straight face (i.e. brand integrity) can you turn back your best customers?

2.Take a deep breadth. Yes, protect your outstanding receivables, but provide customers with a proactive step-by-step program that can help them FOR FREE, lower their outstanding debts. Ween them off debt, just like you weened them on to it. Its all about perception management.

Sounds stupid? Actually its brilliant. And this exact strategy has been used successfully in prior recessions by local banks in different parts of the country.

Just last week, I heard from a banker in Chicago soliciting our firm to help ‘message’ the same type of consumer credit counseling program that he successfully implemented back in the 1980’s, during an economic tailspin that turned the Midwest upside down. When he first created the program for his bank, the management was a bit leery about providing free debt counseling, and keeping the bank open at night and on weekends so that customers could come in for private counseling sessions. The program was a massive success. The number of loan delinquencies dropped by double digits, savings deposits increased, and new customers came into the bank.

This tailspin is a tsunami, and the sooner that the banks ‘get it’, and take PROACTIVE steps that not only protect their balance sheet, but their BRAND, and their good will, the greater the chances are that those financial institutions will survive

Online Advertising: Black Box Behavioral Ad Designs Lead to Green-filled Cash Registers?

Advertising is all about capturing eyeballs, and according to an interesting piece in the business section of today's NY Times, at least two advertising agencies (Adisn and Tumri) are working to solve the complexities of behavioral marketing and the impact on ad design--computer generated ad elements that target specific websites based on the user demographics..

Different colors, different fonts, different key words within the ad text, all based on how specific types of consumers have responded to different types of ad elements.

Smart stuff!

The Inexorable Link Between Sales and Marketing

I shout this just about every day. In fact, in a recent "client-facing" consultation with a young MBA wizard, when I was asked whether our strong suit was marketing or B2B sales, I felt compelled to remind the client the reason they had brought me in the first place--i.e. our tag line "We Connect the Tag Line to the Bottom Line"

TheStreet.com has a columnist that was compelled to post a recent article from Entrepreneur.com's Mark Stevens; "Sales and Marketing. Separated at Birth?" which suggests that either the media so deprived of content that it needs to fill space with business wisdom taught in elementary schools, or that there might be some people left in the world that don't understand the interconnection between marketing and sales.

Yes, it takes a certain skill set to create the "image" and "package" it,and another skill set to "sell" it. But if those two skill sets aren't continuously working hand in hand, whoever owns that business might want to think about changing careers.

And, if you've got employees that don't understand the link between the two practice areas, save yourself some time and energy and simply fire them. If they don't get it by now, they never will.

Click on the link to the article, its a good read. Especially for high school students that won't be able to afford to pay for college or graduate school in this period of economic reflection. If your MBA-trained managers need to read it, that's really scary.

Somali Group Offers To Buy Citigroup

We couldn't resist: The art of the press release...

November 20 (Bloomberg) -- The Somali pirates, renegade Somalis known for hijacking ships for ransom in the Gulf of Aden, are negotiating a purchase of Citigroup.

The pirates would buy Citigroup with new debt and their existing cash stockpiles, earned most recently from hijacking numerous ships, including most recently a $200 million Saudi Arabian oil tanker. The Somali pirates are offering up to $0.10 per share for Citigroup, pirate spokesman Sugule Ali said earlier today. The negotiations have entered the final stage, Ali said. ``You may not like our price, but we are not in the business of paying for things. Be happy we are in the mood to offer the shareholders anything," said Ali.

The pirates will finance part of the purchase by selling new Pirate Ransom Backed Securities. The PRBS's are backed by the cash flows from future ransom payments from hijackings in the Gulf of Aden. Moody's and S&P have already issued their top investment grade ratings for the PRBS's.

Head pirate, Ubu Kalid Shandu, said "we need a bank so that we have a place to keep all of our ransom money. Thankfully, the dislocations in the capital markets has allowed us to purchase Citigroup at an attractive valuation and to take advantage of TARP capital to grow the business even faster."

Shandu added, "We don't call ourselves pirates. We are coastguards and this will just allow us to guard our coasts better."

Courtesy of our wry friends at JLC Group...Hey-put that bottle of rye down! :)

The Marketing Impact of Managing Layoffs

In this new era of economic reflection, its fair to say that 6 out of 10 companies have already started, or are in the process of evaluating and/or implementing a downsizing initiative.

Having held senior positions at three global companies, and being recruited by two dozen+ small, medium and large companies, all facing "gale force headwinds", its safe to say that a very small percentage of HR managers have any extensive practical experience, truly appreciate, and/or have any training in the area of wide-scale downsizings and managing the post mortem process.

Yes, we're referring to grief counseling, as those that are left behind are the ones that have to be attended to.

What does this have to do with marketing? Just about everything.

As the attrition rate escalates, remaining employee morale is a priority that too many people discount (marketing execs, sales execs, etc), and truth be told, the team managers that are responsible for taking proactive steps to ensure ongoing productivity are often ill-equipped, or too distracted wondering about their own future.

The internal communication process is the foundation for any/all outbound initiatives. Low employee morale leads to reduced productivity, lower quality of goods/services, and ultimately to lower sales/revenue. And no amount of advertising can fix that problem. That's when the brand starts to disintegrate.

Screw up the layoff process, and you'll easily poison the well for those that remain. Its that simple.

The country's biggest banks and financial service firms are already implementing unheralded, enterprise wide layoffs. As are every company serving the auto industry, the lodging industry, etc etc.

Sure, the big ones have legions of HR execs to help "manage" the process, and to otherwise implement programs that ensure remaining employees stay loyal, stay focused and stay productive.

Aside from a lack of perceived objectivity, one could argue whether any of these companies and their respective HR people truly understand what needs to be done; which is why outside crisis management and objective corporate grief counselors need to be brought in.

Real experts, not "internal HR managers", but objective, outside professionals that really know what they're doing, and have broad experience dealing with these situations.

If your company is downsizing and recognizes how important it is to 'invest' precious dollars in your remaining human talent--I'd heartily recommend that you contact the people at LeadershipIQ. It just so happens that the firm's CEO Mark Murphy, who just finished a gig teaching the teachers at Harvard University is an expert on the topic..just look at his resume, or search him on Google : MARK MURPHY LEADERSHIP IQ

Don't look at how much money you don't have, just call him.

Commenting about Competitors: Marketing Basics

Courtesy of our friends at MarketingProfs.com:

"...In a post at Gapingvoid, Hugh MacLeod tells the story of a superstar blogger who publicly congratulated a corporate competitor for joining the blogosphere. In her "welcome to the neighborhood" post, she also complimented one of her competitor's products, "which truth be told," says MacLeod, "is … really good … for that industry."

A senior executive at her own company quickly excoriated the superstar in an internal email that bemoaned the press she gave to a competitive product. "What the poor suit doesn't realize, of course, is that on a basic, primal level, how you talk about your competition actually says a lot more about you, than talking about yourself ever will," says MacLeod.

He argues that a willingness to acknowledge the quality in a competitor's product or service underscores the confidence you have in your own. Great artists, he notes, often champion protégés and colleagues; hacks, meanwhile, run around denouncing established artists as overrated or untalented. "Animals can smell fear," says MacLeod, "or the lack thereof." And when the superstar explained this rationale to the executive, he eventually came around to her perspective.

We see plenty of Marketing Inspiration in MacLeod's philosophy: "[W]hat's true at cocktail parties is also true in marketing," he says. "If you want to be boring, talk about yourself. If you want to be interesting, talk about something other than yourself."

Marketing Communications and The News Media: Former TV News Anchor Launches Consulting Firm

Here's an interesting idea: Create a consulting firm and assemble a global team of news media reporters/jouranalists, talking heads, and other media professionals that can be tapped into by corporate clients seeking their collective opinions on the potential impact of a pending corporate news announcement.

Given that many, if not most of the news media members are spin masters, it makes perfect sense that they'd be called upon to opine on how their peers would present the upcoming news story.

Created by former MSNBC Anchor Dan Abrams, the business model for the firm is equally compelling; they'll bill out an hourly basis (and presumably they'll also offer extended retainer agreements so that a corporate client can present an unlimited number of queries).

Do You Want to Know What the Most Successful Advertising Strategy Is?

Can asking a question in an ad increase sales?
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And kudos to Barry A. Densa and the gang at MarketingProfs.com

Social Media in Times of Economic Reflection: If you don't use it, you could lose it (potential sales)

Below excerpt from an Oct 13 WSJ online article with tips on how to market in ever-more challenging times.

Personally speaking, the first sentence i.e. "hottest trend on the web is social media" is an observation that's been made thousands of times over the past several years...but the fact of the matter is that social networking has always been the most impactful form of advertising/marketing. Six degrees of separation goes a long way...
Perfect example: A marketing staffer at Hachette Publication was assigned the task to surf social networking sites, starting with LinkedIn, as part of a campaign to promote a new novel from David Baldacci. She necessarily searched profiles of members that included "favorite authors", and it so happens that my LinkedIn profile included several of my favs, including David Baldacci.

Since my phone and email address are displayed on my profile, this lovely gal phoned me up, introduced herself, and solicited my mailing address so that she could send a FREE copy of Baldacci's latest book. A week later, a lovely package arrived from Hachette, well before the book becomes available in book stores.
Its a good one too!(a continuation of the Camel Club/Oliver Stone series). Hachette is out the cost of a hardcover book, plus postage.

In return, they've earned my continued loyalty to the author, my new-found appreciation for Hachette, and unbeknown to the marketing department, this posting in the blogosphere--which will presumably be read by the many hundreds of fans that tune in to my latest musings, and since many of them are like-minded, at least several will be inspired to buy Baldacci's book at Barnes and Noble.. Long live Social Media

TAP INTO SOCIAL MEDIA

The hottest trend on the Web is social media -- services that allow people to connect with friends, family and colleagues, as well as interact with people around common interests. Social sites could prove crucial to marketers around holiday time, since shoppers often turn to people they know for help with making gift decisions.

"People trust people like themselves more than they trust experts," says Greg Verdino, chief strategy officer at Crayon LLC, a social-media marketing consultancy based in Westport, Conn. "It would be advantageous to have these folks telling your story."

Among the most important social sites for small companies are those where consumers post reviews of local businesses, such as Citysearch and Yelp. Matt McGee, director of strategic search at KeyRelevance, a search-marketing agency based in Dallas, recommends that businesses find ways to address poor reviews as well as encourage their loyal customers to write positive reviews. Companies might do this when they send emails to customers to confirm completed orders or in follow-up notes a few weeks later.

A strong presence on review sites "encourages other shoppers to become customers, it's good word-of-mouth marketing and can have long-term impact in the search engines, which often award better rankings to well-reviewed businesses," Mr. McGee says.

Jerry Yang Set to Step Down as Yahoo CEO ; SEC puts Cuban into the Penalty Box

Although there's no need to link the media stories blanketing the two headline stories, rule of thumb suggests that its good protocol insofar as ensuring that this blog's comments get noticed.

1. In all due respect, and without intending to be rude or discourteous, Jerry Yang was pulling on his wang when he thought that his return to the CEO office would help resuscitate Yahoo!'s business model. Even Carl Icahn figured out that Yang didn't have the gravitas that was needed in the current environment.

His notice of resignation should be seen as a bright spot to anyone that is actually in the position to take over the company. Given the current financing challenges, this will be remembered as one of the great "take unders" of the new economy.

2. Mark Cuban is one of the brashest, most opinionated remnants of the Internet Bubble Age. He's also one of the smartest, savviest entrepreneurs of this generation, as well as the prior generation--and perhaps the next generation. Unlike many that minted millions building net-cenric platforms and cashing out with big bucks, Cuban has a well-documented track record for plowing his money back into well thought out businesses.

OK. He's brash, and he's been tagged with more fines by the NBA than a combination of outspoken coaches and push the envelope players. He calls them as he sees them.

Our opinion is that the SEC's charges, alleging purported five year old insider trades made by Cuban five years are not only trumped, but begets a more important question: "What is the SEC doing investing its time and valuable resources in pusuing outdated actions against a basketball team owner, when they would seemingly have more important things to pursue?

OK. He's a deep pocket. And, he might be in a position to write a check for a few tens of millions that can otherwise help Uncle Sam pay for the hundreds of billions that Sam and Henry have allocated to bailing out banks and Wall Sreet firms.

But why aren't those SEC guys spending their time going after the hundreds of millions of dollars that bigger targets walked away with????

Enough said.