Despite an improving economy and recent record highs in the stock market, nearly half (44 percent) of financial services companies lost 5 percent or more business in the past 12 months due to ongoing reputation and customer satisfaction issues, according to the 2013 Makovsky Wall Street Reputation Study.
Losses based on total sales of these companies are estimated at hundreds of millions of dollars. There was an average loss of 9 percent of business among all companies surveyed.
“Almost five years later, the financial crisis has transformed into a reputation crisis for financial services firms and there is still a long road back to recovery,” says Scott Tangney, executive vice president, Makovsky. “Sixty percent of marketing and communications executives in charge of restoring and building brands at financial service companies told us it could take up to another five years to restore their reputation to pre-financial crisis levels.
“Only about one quarter of financial services firms told us that their corporate reputation has already been completely restored to pre-financial crisis levels.”
The study also revealed the effectiveness of programs in place over the past year to change internal and external perceptions at financial services companies:
• 56 percent of financial services marketing and communications executives believe their company’s communications and marketing programs have only been somewhat effective in changing external and internal perceptions of their company.
• Only 18 percent of companies report programs to be very effective in improving perception.
• Top negative factors ruining reputation: 61 percent said negative public perception of the financial services industry and 52 percent said their company’s management of a crisis, compared to last year’s: liquidity and capital challenges and subprime mortgages.
The study revealed a new set of strategies emerging at these companies to stem loss and rebuild reputation.
“Financial services companies now see the number one reputation challenge for the next year to be differentiating themselves from competitors saddled with significant negative perception issues,” says Tangney. “Marketing and communications executives are struggling with internal issues too, as they told us the biggest obstacle to a stronger reputation is their company’s lack of commitment to devoting the time and resources necessary to rebuilding it.”