Banking Crisis – Another failed opportunity

We moved from housing crisis to credit crisis and are now in the middle of a banking crisis. First Bear Stearns, now IndyMac – who’s next? Wachovia is mentioned in various publications, WaMu seems to be in trouble (Where’s the Whoo Hoo when you really need it?) and ABC spills out a list of banks that are close to a meltdown. Urban myths are rearing their ugly head and there’s a feeding frenzy in the media (Just check out Drudgereport and you know what I mean). This is a full-fledged crisis, one that calls for crisis management, blogger outreach, connecting with nervous customers on a personal level, being open with your situation assessment and, and, and.

And what are banks doing?

You go to their corporate sites, scan the blogs for outreach and any interaction with their customers – absolutely nothing. As we know, banks are in the confidence business. That’s what they’re all about. Nothing else. No bank in the world has enough money on hand to survive a bank run. Just ask IndyMac. The Citigroups, BofA’s and Wells Fargo’s of the world have no way of surviving a bank run. Not even them.

Banks demonstrated confidence through shiny skyscrapers and glossy brochures. But in today’s world of free-flowing rumors, these old confidence builders don’t work that well anymore. We’ve been through the Enron disasters and know that we need to look under the hood. But the banks hide behind their old facades and don’t let anybody in. The problem is that they make themselves increasingly vulnerable to new forms of communication. A bank run can start within a few hours and ruin their business even quicker. Hiding is not an option.

My plea to banks: Open yourself up. I’m not talking about your quarterly earnings calls. Talk to your customers and discuss with them the current situation. Reassure them that their investments are safe (You better be telling the truth!) and explain to them how your bank is dealing with the current crisis. If you have to, go over FDIC regulations. Build confidence through open communication. And reap the benefits. Take a look at ING, see how they handle possible landmines.Stop all your Whoo Hoo and smiling faces – serious handshakes garbage advertising and invest in real conversations with your customers.

Take the concerns of your customers as serious as the demands of Wall Street.

American Airlines – Failed Crisis Management

American Airlines is on everybody’s mind right now: Thousands of flights cancelled, more than 100,000 passenger stranded and millions of dollars lost.

How did AA react to this crisis?

Sure, they put up a link on the corporate site, summarizing the situation. Very White House press statement of them. The press statement from Gerard Arpey was uploaded on their YouTube page. They covered the bases. But did they join the conversation? 

Obviously not. 

Top-down statements might have been good enough a decade ago, today they just cause a shrug. CEO’s tend to apologize on a daily basis and links on sites to a press release are almost an insult to seething customers. Instead, American Airlines should have explained the situation in full: Why were the planes grounded? What is the benefit for the customer? How are they going to make sure this won’t happen again? Are they willing to accept that customers are so fed up with their product? How are they going to change it?

Encourage people to converse with American Airlines. Let them express their feelings. Passengers feel helpless when dealing with airlines. Give them a channel to communicate their feelings. 

And, most importantly, give the staff on the ground authority to treat people like they should be treated: If they have to spend the night, offer them luxury accomodations. If their flight is delayed, offer them a generous voucher for food and drinks. Give everyone affected a free flight within the US. People that had to stay overnight should receive a transcontinental flight. 

Currently, American Airlines is hiding and hoping another airlines will mess up and their mistakes will be forgotten. People don’t forget days of delays. They will talk about it. Write about it. Share it with others. American Airlines should consider the crisis as an opportunity. It’s not too late.