WELLS FARGO - Will they ever restore BRAND CONFIDENCE?
Wells Fargo - Disrupt the bank and restore internal and external brand confidence and achieve Brand Resilience
This past week while reading the WSJ I came across an article that talked about what the booming stock market has meant for brisk business for financial advisors. Not so at Wells Fargo & Company. It went on to say that their wealth management profit has barely improved from 2016, the year it's fake account scandal burst into public view.
Meanwhile, Bank of America and Morgan Stanley have posted double-digit gains in their wealth businesses. Wells Fargo's failure to improve performance has caused them to dismiss over 13,000 financial advisors while paying six-figure bonuses to attract and lure new advisors from competing firms.
Wells Fargo is still finding that it is hard to win back the trust they lost when it came to light that branch employees opened millions of phony accounts without customer knowledge. Management acknowledges that the business has a long way to go to make up the ground it lost following the scandal. The wealth division manages client assets at the end of last year were up 12% from the end of 2016. Client assets, however, at Bank of America and Morgan Stanley rose 21% and 28% respectively.
The Wall Street Journal article shared that Wells Fargo is paying huge sign-up bonuses to replace advisors lost in recent years. It is offering candidates as much as 200% of their revenue from the prior year, one recruiter said, which is about 25% to 50% points higher than what competitors are offering. The article continues, "Wells Fargo's damaged reputation makes joining the firm a tough sell." The article continues to say that recruiters hear advisors they are trying to recruit say that they don't want to have to apologize for the firm that they work for. Also, times are especially tough for advisors who work out of Wells Fargo's branches and depend on referrals from bankers, accountants and financial advisors outside the firm. Referrals fell after the bank eliminated sales goals in 2016 to stamp out an aggressive sales culture that led to the fake account openings.
I wonder if their brand can be resurrected and attain brand resiliency. How can they win over the public and employees and come across as sincere, trustworthy and reliable again?
Despite spending millions of dollars on mea culpa advertising, paying over $480 million to resolve a class-action lawsuit brought by investors in May 2018 and several public announcements of attrition, it seems customers, employees and new recruits do not respect or trust Wells Fargo any longer. The company has tarnished their brand and it may not ever recover when consumers, employees and recruits have other choices in their financial marketplace.
Admission of guilt – Promises to change - I can only imagine what it's like to work at Wells Fargo these days. There must be a lot of finger-pointing, chaos, urgency, blame, anger and depression, resentment, and the defection of talent going on there.
As an internal and external brand consultancy, here are some of our suggestions. First, they should seriously consider a total disruptive brand repositioning. Create a new bank – not a reinvented one. It should start with a new brand name. Yes. Drop the Wells Fargo name - all they have left of their past brand equity is the stagecoach and the team of horses. Why maintain a name and hold onto something that no one believes in?
Once they have their disruptive brand repositioning articulated they can truly start over. That would be a bold move. Changing CEOs and recruiting new management is not enough.
Then they should embark on a comprehensive multimillion-dollar repositioning and change communications effort. Internally and externally. Not a reinvention effort. A disruptive brand repositioning effort. Start over – don't improve the past. Don't re-invent. Establish a new bank.
What is disruptive brand positioning? It is when a company rethinks its core business model and strategy that broadens the customer and employee engagement beyond its traditional consumer marketplace. It radically changes the appeal, relevance, and attitudes of a new changing customer base. Examples: the classic example is when IBM evolved from being a traditional mainframe computing company to and e-business company. Overnight it disruptively repositioned itself and broaden its footprint appeal to senior executives to provide strategy creation, open markets and provide advisory and consulting services beyond hardware and software solutions alone. Today, IBM continues to evolve from E-business to "cognitive computing" with its introduction of Watson. The advertising is brilliant, the strategy is brilliant and their businesses benefiting. The head of their cognitive computing unit has just been named their new CEO.
Once Wells Fargo has clarity and a disruptive strategy for a new way of banking, it needs a comprehensive internal and external brand communications program using new channels, nontraditional media, and experiential marketing techniques. Tactics and media should match the disruptive repositioning of the new brand. Internally they need to overhaul their culture, purpose, and values through an effective on-going internal change communications program.
At this point, all we can do is wait and see how Wells Fargo's new leadership grasps the need to disruptively reposition their company. Divorce itself from the past and establish (not reinvent) a new future.
If you would like to have a conversation on how you can attain a disruptive repositioning strategy, please give me a call.
Give us a call at 617-558-9770 or reach out – at firstname.lastname@example.org.
Allan Steinmetz CEO