Editor’s Note: Turns out Wachovia wasn’t being totally forthright. The company was bought today by Citigroup and shares fell to 94 cents in pre-open trading. Surprise, surprise.
Wachovia is worried about the financial meltdown’s impact on its customer base. That’s the message I got, anyway, when I read this letter from CEO Bob Steel.
Now, I’m a fan of Wachovia. The Charlotte-based bank is a pillar of they local economy, and they seem to be practicing sound business. But given this week’s turmoil in the financial markets — not to mention the collapses in the housing and mortgage sectors — is a CEO’s word worth much these days?
I’m not suggesting the troubles of Lehman Brothers, Merrill Lynch, AIG and a growing list of others has anything to do with Wachovia. It’s just that I’ve heard the “everything’s peachy here” song before. Try singing that tune to the guy whose 401k just withered, or the low man on the totem pole whose job at the Wall Street powerhouse just disappeared.
Wachovia isn’t alone. After the collapse of IndyMac, when most of us were wondering if Fannie and Freddie were next, the banking industry scrambled to reassure customers. But as PR Week pointed out, “Many banks, often reticent when it comes to communicating problems or changes, are struggling with how, as well as how much, to communicate within the tightly regulated industry.”
The big issue, of course, is the economic one. But the PR question is an interesting one, too. Do blanket reassurances really work? What do they accomplish?
You know what would really reassure customers? Tell them how you plan to weather the weak economy. Honestly explain what the market meltdown means for your company and for their money. Tell them what you’re going to do — besides “remain focused [and] continue serving customers like no other competitor” — to protect their investments.
I don’t know what’s next for the economy, and frankly, I don’t care. I’ll survive no matter what. But lots of people are genuinely scared. And to reassure those folks with a “don’t worry, everything’s A-OK” message? Seems like a lightweight answer to those fears, if you ask me. But, hey, you’re in a regulated industry — sharing real information with customers to put them at ease probably violates the law.