Wells Fargo Fail: A Lesson in Crisis Communications
Sep 22, 2016
We have all seen the footage on the nightly news of Elizabeth Warren berating Wells Fargo Chief John Stumpf while he stammers explanations, excuses and apologies. The more he talks, the more he seems to fuel public outrage and skepticism. For a quick lesson in crisis communications, we turn to Pushkin PR founder and public relations pro Jon Pushkin, a guy who is all about shooting it straight.
Why do you think people continue to be so frustrated with John Stumpf and Wells Fargo?
JP: When an organization has lost the public’s trust, it takes more than an apology to get it back. Repairing a damaged reputation requires more than just saying sorry. The organization needs to respond in a way that is heartfelt, sincere, and compassionate to be believable. Wells Fargo’s CEO may be sorry that he has to testify before the United States Senate, but if he wants to demonstrate that he serious about being accountable, he needs to demonstrate some compassion for the customers that Wells Fargo deceived.
What do you think about Wells Fargo's reaction to the situation? What could they have done differently?
JP: So far, Wells Fargo’s response has been to fire thousands of low-level, low-paid employees. These are the same employees that the company pressured into boosting its accounts. At the same time, the executive in charge of the program is retiring with a package worth over $100 million, and the CEO’s compensation this year is over $19 million.
That alone is not doing much to help the company regain the public’s trust. Wells Fargo can start by showing some compassion for the customers the company deceived, outlining concrete steps they are taking to correct the situation, and talking about the company’s core values.
What is the takeaway for other businesses?
JP: Reputations take years to build but minutes to ruin. When things go wrong or people make mistakes, a company should worry about the long-term health of its brand rather than law suits or other penalties. It should listen to its PR counsel in addition to its lawyers.
Instead of offering platitudes, a company needs to show how they are taking responsibility. The public wants to see action, not hear empty promises. A good first step would be to cut the compensation packages for the CEO and the executive in charge of the program.
What crisis communications grade do you give Wells Fargo?
I would give Wells Fargo a D so far. Good for them for saying we are not going to do this anymore. But until they show that they are sincere and accountable, they will have a difficult time regaining the trust that they’ve lost and repairing the damage they’ve done to their reputation.
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As a digital marketing strategist, Maribeth loves learning and writing about content marketing, social media, SEO, paid advertising, PR and mobile. She is obsessed with data-driven marketing and believes all online channels should be given a strategy, so engagement can be personalized and well targeted. In her free time, she likes watching science documentaries, hiking, skiing and traveling to far-flung places.