Managing reputation when unhappy customers go public

Community banks are not dragged through the mud by angry online reviewers as frequently as your local restaurant or service company. Yet, a cursory search of Yelp reveals negative reviews of hometown banks are pretty easy to come by:

“Just stopped in to make a deposit,” begins one such complaint against a Minnesota-based community bank. “The poor teller is running the drive-thru and lobby customers by himself while the branch manager pays no attention. She finally noticed him running around trying to help everyone after he had to run to her desk to ask for help with something. 5 stars for an awesome, hard-working teller! 3 stars for the branch manager’s lack of initiative.”

“No ATM,” another reviewer said of a small bank in Iowa. “It really doesn’t matter how great they are; there is a certain minimum level of service required to be a bank and an ATM is one of them.”

Yet another lengthy review recounts the tale of a small business owner who felt a lending officer at a different Minnesota bank was less than honest about the loan products on offer. When challenged, that banker suddenly became unresponsive. “A review of their website states their motto as ‘The community bank that cares about you.’ That’s certainly not been my experience and will not use this bank or refer anyone that I know in the business community to them.”

Complaints about bad service aren’t new but the impact of crowd-sourced reviews that reach thousands and sometimes millions of people has the potential to irreparably harm a bank’s brand. A survey conducted by the Reputation Institute in partnership with the American Banker, released in 2017, looked at what sorts of activities can harm a bank’s brand. The study, which analyzed more than 12,000 reviews of 40 large U.S. banks, looked at how the public perceived certain actions taken by the bank or a banker, and applied that action to the degree to which a bank’s reputation might be damaged. The top weighted ways customers perceived a bank’s quality, according to the study, was whether it behaved ethically, met customer needs, was fair in the way it conducted business, and whether it offered leading edge products and services.

Maintaining a good reputation both offline and online should be easier for community banks than large banks, said Stephen Hahn-Griffiths, an executive partner and chief research officer for the Reputation Institute. “They have strengths in categories that matter most to customers,” he said.

Yet community banks can face reputational challenges because they lack the resources in areas such as corporate communications, Hahn-Griffiths said. They can find it “difficult to get their message out.”

Where community banks shine, Hahn-Griffiths suggested, was in living up to and delivering on a deeper sense of purpose. “Small banks can win on ethics, transparency, fairness, and good corporate citizenship,” he said. “It’s much harder for a big bank to win on values.” In the minds of most customers, corporate citizenship is more important than convenience or free checking, and a bank that advances its messaging about its values can weather the smaller public relations foibles that emerge when a staff person has a bad day.

Unlike credit risk, which can be measured objectively, reputation risk is an industry-wide issue for banks of all sizes, said Karen Grandstrand of Fredrikson & Byron, Minneapolis. A corporate reputation can be lost in a moment, said Grandstrand, who called reputation risk the one risk that is the “most ill-defined” for most organizations. “I’m not sure anyone appreciates the importance or what it could mean for an organization,” Grandstrand said.

Grandstrand serves on the board of Twin Cities-based TCF Bank, which turned up at the top of a list of most complained about banks. She acknowledged the challenge facing banks in terms of crowd-sourced reviews: “You can never come up with a list that can identify every event that could potentially happen.” Mitigating reputation risk often requires a bank to determine, in advance, what it should do or what its appropriate corporate response should be, Grandstrand said.

Hahn-Griffiths said the best way for community banks to manage online reputation might be considered old fashioned: foster adoring customers. Having a passionate customer come to your bank’s defense in response to a Yelp bash or a social media rant has more authentic validity than anything a bank could say in its own defense, Hahn-Griffiths explained. “Promoters can help elevate a bank’s reputation by neutralizing squeaky-wheel detractors.”

Reputation managers: Worth it?
The desire for companies to stay on top of online complaints has sparked a new industry: Online Reputation Management. ORM professionals offer advice and can be on the lookout for a bank, business or individual that wants to protect a good reputation. Alexa Martin, an ORM specialist with Status Labs, said the best way to handle a typical complaint is cordially, respectfully and completely. “Responding is the best thing a business owner can do,” Martin writes in an article published on the Status Labs website. “Unsatisfied patrons for the most part just want to have their voice heard. I recommend responding publicly and then taking it to a direct message to work out the details.”

Martin said that while ORM firms are available to help a bank return the sheen to its tarnished reputation, not all such firms’ services are effective. This makes many people skeptical of ORMs, she admits. “Be on the look-out for firms with cookie cutter solutions, PR firms that claim they also do ORM and those that offer to completely remove your [online search] results,” she counseled.

This new industry is not without its detractors, including Yelp, which publishes its own advice on how to keep online reviewers from turning on you. Yelp says ORM firms don’t offer much value beyond being additional eyes on the lookout for online complaints for companies that don’t have staff to do this work.

Vince Sollitto, who works in corporate communications and public affairs for Yelp, encourages bankers to read its guide to success for business owners. The advice therein might be summarized in the most obvious way possible: If you don’t want angry customers complaining online don’t make your customers angry. Sounds simple. But what about the one day you are short staffed and things don’t go perfectly and you hear about it online first? Yelp suggests you “take a deep breath and think very carefully about what you are going to write. Or even better, don’t think too much: Keep it simple by thanking your customer for their patronage and feedback.”

Sollitto and Martin agree on two points: There is no substitute for organic loyalty. And, anyone who promises to rid the internet of bad reviews is lying.

“In the long run, the best approach is to not interfere with the natural flow of reviews,” Sollitto said. “Taking the time to respond to reviews and provide great customer service will go much further in building a great reputation.”