Look beyond the negative: valuing the customer in a difficult economy
This morning CNN.com reported that the credit card industry, a part of the financial services landscape, was going to have a difficult year (like most industries). Charge off rates exceeded 7.7% in December.
The story quotes Bank of America's CEO stating "Bank of America CEO Ken Lewis warned lawmakers at a high-profile Congressional hearing on the government's $700 billion rescue plan that he had no doubts 2009 would be an "awful year" for the credit card industry."
While this is definitely a serious concern for issuing banks and the payments industry, it is also an opportunity. Customer service and clear communications can play a more strategic role in this economic climate and can help the issuers differentiate themselves and capture a competitive advantage.
The media is going to focus on the negatives. The late fees, the rising interest rates and how they negatively impact consumers. Companies have two options.
1) Let those stories appear, realize they will most likely be criticizing the industry as a whole, take the lumps and move on with business as usual - focusing on mitigating risk while still attracting the high-value customer.
2) The other option, and the one I recommend, is to be more aggressive and clear when it comes to consumer education and customer service. Take the long term view and realize in this climate, if you are shown to work well with customers, the ones you have will remain loyal when the market rebounds, and you will attract valuable new users who are frustrated with competitors' policies.
Make sure the media outlets and bloggers have tips from your company on what consumers can do to mitigate late fees and bring interest rates down. Launch a consumer education campaign. Highlight how you are working with consumers to help them pay off their debts. While some consumers will still be negative - the positive comments will also be out there and will spread. Thanks to the longevity of comments and Google search - both will last for years. You want the good ones out there when the economy rebounds.
This lesson can be applied to more than just services companies. By remembering the customer is the brand ambassador and working with them to build a relationship grounded on clear, positive communications - companies will reap the rewards now and the future, regardless of the business climate.
Posted by Mark McClennan on March 10, 2009 at 11:00 AM
