Oh no. It’s happened again. Another major brand has been caught stealing from its own customers. This time, it’s Wells Fargo, the massively huge banking juggernaut that uses, as its logo, the iconic, horse-drawn stagecoach, symbol of one of the few institutions that could be trusted in the old west. The Wells Fargo message? You can trust us. When all you’re selling is trustworthiness and then it turns out you can’t be trusted, well that just stabs you in the back and then puts salt in the wound. This betrayal of trust does serious damage to the Wells Fargo brand. Because trust … well, actually, that’s all a brand really is.
A brand is a covenant between a business and its market. The business makes a brand promise to its market. And, when it delivers on that promise consistently, over time, the market begins to reward the business with repeat patronage – brand loyalty. It’s in that symbiotic relationship that a brand takes seed and grows. If the brand is the bond between a business and its market, then when you break that bond, you break the brand.
Markets are made up of people and people have values. They bring those values with them into any relationship they enter, including relationships with businesses. They expect that implicit in any brand promise, there is an unspoken pledge to do business in an ethical way – sort of like a handshake. Businesses need to establish their own sets of values and make sure they align with those of their market. That way, they can be sure to always stay within their market’s good graces.
In 1992, the public was alarmed to learn that Nike was manufacturing shoes using child labor in sweatshop conditions. There was a huge negative reaction. People refused to wear their Swoosh-bearing shoes in public. Nike’s stock tumbled. At that time, the Nike people were considered masters of branding, as they still are today. Their brand promise was to deliver shoes that were perfectly designed for your sport, whatever that sport might be, at a reasonable price. They never mentioned what kinds of methodologies they would have to use to deliver on that promise. In their eyes, process was not part of the deal. So they pushed back against the public outcry, claiming they were only giving the market what it wanted. But they protested in vain. People just didn’t want to be associated with those kinds of practices. And the only way to not be associated was to stop wearing the logo.
Nike got the message that they were out of sync with the values of their market. They changed their tune and, eventually, took the lead in urging other manufacturers, worldwide, to provide safe working environments, hire only adults, and build schools for their workers’ children. Like they say, if you’re being run out of town by an angry mob, best to grab a baton and make it look like you’re leading a parade. In the end, Nike was one of the first modern companies to formalize the values that would guide their future business practices.
More recently, SeaWorld has had to rewrite its business plan in order to stay aligned with the changing values of its market. As its customers became less and less accepting of keeping orcas in captivity, the aquarium/amusement park found its main attraction to be less and less – attractive. Making such a significant change to their business model is a huge risk for them. It’s not clear they can continue to be profitable but, really, there’s no other way. They’re doing the right thing. The market has spoken.
Like Wells Fargo, Volkswagen is another recent example of a fraudulent brand in that they promised one thing and delivered quite the opposite. VW offered low-emissions vehicles to those within the car-buying public who care deeply about reducing their own carbon footprint. Instead, they made their customers co-conspirators in deceiving the Environmental Protection Agency by gaming regular smog tests and pumping gigantic amounts of toxins into the air. The first ones to breathe in those toxins? Volkswagen’s own, environmentally conscious customers, and their families. Because of that breach, it will take decades for Volkswagen to repair its brand.
At Wells Fargo, apparently, the pressure for more quarterly earnings and higher stock valuations proved to be more than leadership could bear. They transferred that pressure downward to their rank-and-file branch managers, forcing them to get more and more aggressive about opening new accounts. Predictably, some cracked and crossed over into criminal practices. They opened phony accounts in their customers’ names and charged fees to maintain those accounts. Worse, they opened phony lines of credit that, not only cost customers money but, damaged their credit ratings as well – perhaps, permanently.
CEO, John Stumpf, now seems to be sacrificing the Wells Fargo brand in favor of his own golden parachute. He claims to accept responsibility for the crime but is not willing to pay any personal penalty for the mess. If he gets fired, he can take with him as much as $200 million. And Carrie Tolstedt, the executive who ran the business unit responsible for all the fake accounts has already taken the stagecoach out of town with her $125 million retirement package.
Wells Fargo will survive, of course. But its brand is taking a huge hit for its corporate malfeasance. How much of a hit will depend on how extensive and authentic are their mea culpas. Will Wells Fargo, like SeaWorld, risk its very business model to get right with its customers’ values? Will they, like Nike, grab a baton and lead a parade towards better industry-wide banking practices?
I wouldn’t trust them to.
Best Branding Reads – Week of September 26, 2016
Blind Spots That Jeopardize Brand Relevance
Transparency. Accuracy. Timeliness. Clarity.
CSO Imran Khan Explains Snapchat's Rebrand to Snap Inc.
If Snapchat had a CSO when they started, they wouldn’t have had to rebrand so soon.
6 Insights For Brand Transformation And Change
Excellent edit by Derrick Daye, linking to 6 excellent articles on branding.
The Brand Relevance Index: What Leading Brand Thinkers Really Think
OK, brand builders! This is your weekend reading assignment.
When Should Brands Challenge Foes?
Are you ready to throw down the gauntlet? Read this first.
New Logo and Identity for Primary
Interesting approach to logo design
Thriving in ‘The New’ Economy: 5 Ways Accenture Is Driving Growth
Not surprising that a giant consultancy like Accenture leads the way in showing how to brand B2B service companies.