Maybe Bank of America means to make this a yearly thing. It's the cusp of fall and winter, and the banking behemoth is backpedaling furiously from yet another PR disaster relating to account fees.
Back in 2011, as the leaves fell from the trees, BoA junked the fantastically unpopular proposal that customers be charged $5 per month simply for using their debit cards. The Bank was already charging a transaction fee for debit card use at non-BoA ATMs, in addition to any fee imposed by the ATM vendor.
Customers' patience finally snapped. Their weapon of choice? Social media. One individual customer alone collected over 150,000 signatures opposing the decision through a Facebook petition. A Google+ user created a fake and insolent BoA Business Page, which quickly gained more followers than the authentic BoA Google+ page. Consumers Union used Web outreach to prompt 40,000 consumers to demand a Congressional investigation.
Did BoA learn the social media lesson from all this? To some extent, it did. Last week, and at the last minute, it backed off doing it all over again. For now, anyway.
The scheme this time was to levy new checking account fees on customers who maintain a low account balance; in other words, the customers who, by and large, can least afford extra charges. This threatened, of course, another wave of consumer revulsion against the famously bailed-out bank.
It seems clear that bank researchers have been using small focus groups in an attempt to discover what will and won't wash with consumers. According to the WSJ:
Researchers at the bank have spent several hundred hours over the past two months with customers, sitting in their homes for hours at a time and interviewing them about their financial habits.
There's no sign, though, that BoA is utilizing the biggest focus group there is: the non-stop national conversation taking place on Twitter, Facebook, Google+, and the other major social media sites.
If BoA, buoyed up by being "too big to fail," can perhaps afford to blunder a bout the market place like a deranged elephant, attempting to impose unpopular and unfair charges on its customers. Small to midsized businesses can't afford to act like this.
Media relations guru Howard Rubinstein said, in the context of last year's BoA about-face, "Every company is now sitting on electronic quicksand." How true. And for smaller businesses, whether B2B or B2C, swimming against the tide of what the market wants is no longer an option in an environment where customers -- as well as partners, suppliers, and competitors -- are communicating in real time.
Electronic quicksand. That's a negative image. What's really available, to companies agile enough to understand and respond, is an electronic foundation. As never before, it's possible to learn in real time what potential customers are looking for -- in terms of product, price, and service. It takes a fumbling, monolithic enterprise like BoA to turn a foundation into a swamp.
This is where midmarket companies enjoy an advantage. Because they're smaller, they might be less likely to convince themselves they're so essential that their customers can't afford to shop for alternatives.
The fact that a media relations "expert" called this quicksand tells the whole story to me. There's a stratified crowd at the Enterprise level that considers the consumer a cost center.
Yes, yes, they're the ones spending the money. OK, they get that. But this... this... expectation of being treated with value and respect, it's just so darn costly. Don't those filthy peons understand that BofA is actually doing them a favor by "helping" them to interest below the rate of inflation, and that it costs money to do that, so they *have* to charge us for it?
Yes, enterprises have responsibilities to the shareholders. But it seems that someone needs to remind these geniuses that the shareholders are *not* the business.
Part of BoA's problem, and it's a real one, is that customers who maintain modest balances may indeed be costly. There has to be a more imaginative way of fixing that problem than, in effect, taxing them for not having as much money in their accounts as others.
In todays intant world no company can afford the bad press that can come from social media outrage. BOA and Ulsterbank in ireland this year have both in the last 12 months had a great deal of negative media to deal with based on poor decisions made. Can banks who are already on thin ice with consumers afford to have this and in today's world of competitive banking why are more customers not choosing to take action and switch banks? Are consumers all talk and no action or has BOA & ulster bank had lower profits this year? does anyone know?
I am very much in favor of consumer's taking back the reins from banks, utilities, and other big corporations which have been able to, frankly, push us around for so long.
Like so many other businesses, some are embracing technology and bending over backwards to provide white-glove customer service, while others are trying to trying to suck every dime out of their current customers while providing the minimum level of customer service.
On one hand, I have accounts at Chase Bank, which provides a system that allws me to deposit checks from my iPhone, a personal banker who knows me by name, and a generous system that pays me a small amount every month to use my electronic cards at merchants. On the other side, we have banks that eschew customer service, and charge $2 per month per account for paper statements.
Like other businesses, customer-facing financial institutions seem to have split into those that embrace technology and those that refuse to change.
The irony is businesses are not realizing the importance of customer service. Even if they make it a point to empty the pockets of the customer they should atleast provide some decent level of support.
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