KQ Article

It is already yesterday’s news. The financial meltdown has compromised countless balance sheets, along with many relationships between the consumer and service provider.

As we move toward recovery, regaining this lost trust should obviously be at the top of the agenda for every financial institution. If you enjoyed a high level of trustworthiness before the financial crisis, you can recover well simply by handling the issue proactively.

JetBlue, for example, quickly recovered customer trust  following the 2007 Valentine’sDay ice storm, when it had to cancel more than a thousand flights over a single holiday weekend. The carrier remedied the situation by immediately — and voluntarily — compensating affected customers, in an amount that was well above any regulatory requirement.

But how do companies like JetBlue build such a high level of trust in the first place? Becoming trustworthy seems to have two necessary requirements. Specifically, customers must believe that a business:

1. Has good intentions (i.e., it has the customer’s best interest at heart).
2. Has the basic competence to deliver on those good intentions.

Addressing the misperceptions
While your intentions likely have always been sound, a widespread perception has emerged about the industry that must be addressed by every financial institution. Specifically, many consumers interpret the exorbitant levels of executive compensation, especially in the face of poor financial results, as bad intent pure and simple, which reflects on every bank and credit union.

It may be true that to navigate these perilous post-meltdown waters, a sophisticated financial services firm needs the most capable (and expensive) brains available. But a firm looks untrustworthy when the bonuses are paid whether performance is stellar or not. There’s a good deal of public indignation at the injustice of all of this, and it seems that every financial institution must proactively address it in order to regain trust.

And these times call for straight talk. Although lost trust can generally be restored after a period of good behavior, trust almost never fully recovers when shrouded statements follow bad behavior. This is one of the biggest problems plaguing most public companies, because the first officials on the scene of a disaster are usually the PR folks. And no matter how good it is, spin is spin. It’s the opposite of straight talk.

Ways to restore confidence
Regaining trust might face an uphill climb for the financial services industry, but it’s definitely not too late for you, especially if your bank or credit union enjoyed high levels of consumer trust before the market went astray.

And there is more good news: the measures for making reparations are surprisingly simple. Here are six steps for helping you fully restore trust with consumers:

1. Acknowledge the problem’s seriousness. If you ignore or downplay that seriousness, the mistrust may only intensify.
2. Act immediately. Every day you do nothing could deepen the perception that inactivity equals indifference.
3. Apologize. Consumers will forgive honest mistakes if you just acknowledge that errors were made, show sincere remorse and have effective measures in place to ensure it won’t happen again.
4. Don’t make excuses. Never utter phrases like “you have to understand” or “circumstances beyond our control.” Simply own up and apologize. A little humility goes a long way.
5. Offer a gift. Following the JetBlue example, provide an economic gift that shows you are taking your customers or members seriously, and that this is not simply a PR issue.
6. Make a serious effort to do better. A stated promise of better behavior can accelerate the growth of trust, but only  actual good behavior will make it last.

A good reputation and the trust of your customers are vital for your long-term success — not simply because these attributes are a boon to business in good times, but because they are essential to restoring your credibility in the wake of service problems, mistakes and other crises that will occasionally be experienced by any business, no matter how good it is.

At the end of the day, business resilience is built on a foundation of trustworthiness. By taking immediate steps to rebuild yours, you’ll be well positioned to enter growth mode again as the economic horizon brightens.