Branding Power: The Bank Of Apple, Part 1 of 2

Two years ago, there was a little-read post that speculated what might happen if Apple opened a banking or credit card division. Most of the speculation centered on Near-Field Contactless (NFC) technologies, which would enable payments to be made with a phone; no cards, inserts, or swipes.

This year is a little different. Strategic and research consultancy KAE in cooperation with online pollster Toluna didn't focus on whether or not Apple could open a banking division based on technology but rather the willingness of customers to bank with Apple. Ten percent of the public, almost half of all Apple customers would.

The real value of a brand is elevated trust.

Some people never go further than the latest valuation of a brand — Apple is valued at $39.3 billion — to determine its worth. But with the simplest of surveys, KAE demonstrates what brand value really means.

The reason people would bank with Apple, a field in which it has never operated before (unless you make the connection that shopping carts are close), is the high level of trust. Sixty-six percent, in fact, said that their trust in the brand would sell them alone. More than half said they expect Apple would make banking easier and more reliable. Many wouldn't expect the company to open brick and mortar banks.

"Apple would face no capital constraints in building a deposits base. With a proven ability to cross-sell additional products, along with the highest sales per square foot of any retailer and affluent customer base, it wouldn't take long for Apple to become one of the most profitable banks in recent times," said David Rankin of KAE. "Once the power of the Apple brand and its options for growth are understood, it tends to prompt one of three responses from financial institutions: accelerated invention, defensive benchmarking, or blissful avoidance."

In recent years, especially with disruptive innovations that include iTunes, phones, tablets, and even the near perfect prospect of iBooks (there are a couple more advents the company needs to kick publishing out of the ball park), Apple has consistently demonstrated it can reinvent how industries are perceived, elevate expectations within those industries, and then either meet expectations or even exceed them.

A logo alone is not what modern branding is about.

In looking at communication trends among top performing brands, there has been one standout among those brands like Apple and Google racing to the top and unseating some of those that held the reins for a long time. These companies in particular are less interested in managing their reputations and more interested in managing their character.

How can that be? For companies, character isn't merely an assignment of an individual's trait to a group. It's really a manifestation of corporate culture — the company's ability to do what it says it will do with some exceptionalism at every level of customer contact — product/service-to-person, person-to-person, public perception-to-person.

That's not to say that all things will be perfect. Apple, much like Google, has its share of detractors and sometimes questionable decisions. But mostly, it consistently delivers on every point of contact — at least as good as it says it will (which is often more important than being number one in every category). Any company can do it, assuming they choose to. We'll take a look at the steps on Friday.

Blundering Pundits: Etch-A-Sketch Candidates

Having worked on, reviewed, and analyzed hundreds of political campaigns and crisis communication scenarios, I'm among the first to admit that communication gaffes can be costly. But don't think for a moment that any loss of momentum by the Mitt Romney campaign can be tied to senior advisor Eric Fehrnstrom's ill-advised analogy that the campaign is like an Etch A Sketch. There's more to it.

Most communication gaffes don't cause people to win or lose elections. They merely become a de facto moniker or brand that best sums up the weakness that a campaign team has been struggling with all along. For Romney's campaign, Fehrnstrom accidentally summed up the greatest weakness — people are still unsure whether Romney will do what he says that he will do. It's a matter of trust.

Communication gaffes don't kill candidates. They merely articulate any weaknesses.

There is no doubt that this single well-meant misstatement will go down in history as one of the worst, joining several others: the infamous picture of Michael Dukakis in an M1 Abrams tank during the 1988 presidential campaign; the "Dean Scream" by Howard Dean during the 2008 presidential primary after losing the Iowa caucuses; and Sarah Palin's inability to explain how Alaska's proximity to Russia gave her foreign policy experience during an interview with Katie Couric.

But while all of them are memorable, it's important to consider that it was not the gaffe but how the gaffe symbolized much deeper issues that made the difference. Dukakis, Dean, and Palin's gaffes didn't cost anyone an election. They only perfectly summed up deeper campaign problems, much like this one did.



If there is a lesson to be learned, it's as simple as this: never be so articulate that you make yourself a slave to your own message. And given that everyone is jumping on the Etch A Sketch comment, including the current administration, it seems pretty clear that this is one of those moments, but only if Romney's team cannot recover. There isn't much they can do to recover from it, except one little thing that carries a risk.

The Etch A Sketch gaffe is an opportunity to be humble, human, and approachable. 

Although he didn't personally make the remark, he might as well have. To date, the campaign seems unable to seize the moment, attempting to be too serious over a message meant to appeal to conservative and moderate voters.

Instead, Romney would have been better off defusing the moment by making fun of it. He should have shown up somewhere with his own Etch A Sketch, poked fun at the comment himself, and then used it as an opportunity to reinforce his positions — not with broad boasts of conservative ideologies or elaborate explanations that sometimes require Cliff Notes but with specifics that only a human can deliver. And that, right there, is why Romney faces competition. He has yet to be human enough.

On the bright side, Etch A Sketch sales are rising. I guess nobody realized how magical they can be.

Making Decisions: Do Anything But Wait

Despite the potential for market recovery, 48 percent of American investors believe they will run out of money in their lifetime. Ten years ago, only 30 percent believed they would run out of money.

These statistics are among the findings from a survey commissioned by BNY Mellon Wealth Management. CEO Larry Hughes went as far to say that "bleak is the new black" among investors.

He could be right. The same survey, taken in February, shows that more than six in ten investors (61 percent) say Americans are pessimistic about the markets compared to the balance who are optimistic. The outcome of the anxiety has slowed investments in the private sector, with 59 percent saying they are waiting for conditions to improve before taking any real action in their investment strategy.

How psychology and external pressures play a role in communication. 

As many as four in ten investors said they are holding off on making investment decisions until after the upcoming presidential election. Their trepidation includes the potential for tax increases and interest rates. But in general, shaky employment numbers (with many people removed from the work force), fear over the growing debt, and ultra high gas and energy prices are all baring down.

Part of the problem goes beyond hard numbers. Some of it is tied to an unwillingness to accept what's temporary and resign themselves to complacency. People are more likely to wait during good times and bad times. They are less likely to wait when they are in periods of innovation or adoption.

Unless a company is innovating new products that demand attention, it is likely deciding between identifying the shrinking pool of optimists or attempting to adopt new programs or approaches designed to change the the behavior of the pessimists. Common problem-solution communication is one strategy.

For example, a car dealership might emphasize more energy efficient vehicles as an economic alternative. They might even increase the trade-in incentive for less fuel efficient vehicles. Rental companies might offer a free tank of gas, assuming it is built into the rental price. Resorts with higher drive-in traffic might create an incentive with gas vouchers. Educational institutions might be more aggressive in providing online courses that do not require students (and instructors) to commute.

Any of these programs are short term, but represent how companies need to remain responsive to environmental conditions as much as operational improvements and/or competitive pressures. Companies have to be more responsive in eliminating the pressure or increasing the product/service value to exceed the perceived cost of acquisition.

When external pressures become too high, even communication can't help. 

In terms of gas prices, some people are now predicting that they will eclipse $5 per gallon this year. If that happens, even consumers with fuel efficient cars will be impacted. But they are not alone. Businesses will be forced either to absorb high fuel costs or increase prices to compensate, leaving consumers to face both higher fuel prices and inflation.

The prospect seems daunting given that 9 percent of Americans are unemployed, more than one in five Americans are underemployed, and several million were written off from the ranks of the work force. On a macro scale, all of it is contributing to shrinking optimism and slowing down economic recovery.

In such instances, unless it is innovation driven, companies and communicators are best served looking for smaller scale successes, perhaps in regional or even local markets that are less impacted by a continued downturn. While some people might think this goes beyond the scope of a communicator, it really doesn't. Whether marketing or public relations, well-intentioned professionals ought to be able to provide keen insight from the various publics served by the company every day.

The worst thing to do, however, is resign to a wait-and-see attitude that might permeate the rest of the market. If you are merely defending what you have, then there is a good chance you might already be losing. The same can be true for some who are unemployed; waiting for the 'right opportunity' often carries more risk than seizing temporary opportunities.

Voting: Personal Business Becomes Public Policy

According to a new Harris Interactive/HealthDay poll released today, most Americans are ambivalent about new regulations aimed at governing lifestyle choices. In most cases, the public is happy to support regulations that they perceive have little impact on themselves, personally.

While 61 percent worried that legislation aimed at lifestyle choices might be too coercive, impeding individual freedoms, 81 percent agreed (33 percent strongly agreed) that these same laws are important to protecting safety. This creates a paradox in that Americans vote their immediate moral conscience without considering consequences.

"The public is somewhat schizophrenic about laws and policies that are intended to improve health and safety and reduce injuries and accidents," said Humphrey Taylor, chairman of The Harris Poll. "Most people favor many regulations that protect them but they worry about our becoming a 'nanny state.'"

Issues that respondents supported or strongly supported.

• 91 percent supported the ban on texting and driving.
• 86 percent supported child vaccinations.
• 86 percent supported safety belt laws.
• 82 percent supported motorcycle helmet laws.
• 80 percent supported smoking bans in enclosed public places.
• 78 percent supported requiring nutritional information on menus.
• 70 percent supported cell phone use while driving.
• 68 percent supported reducing salt in packaged goods.
• 61 percent supported mandatory HPV vaccinations for girls, ages 11-12.
• 38 percent supported a tax on high sugar soft drinks.
• 35 percent supported employers not hiring people who smoke.
• 24 percent supported employers not hiring people because of weight.

The same respondents said that people should be free to make their own decisions (81 percent) unless those laws reduce accidents, improve health, save lives, and reduce health care costs (78 percent). And it is in this paradox that the survey doesn't go far enough, one that is prime for psychologists.

Packaging and propaganda are driving Americans to make decisions for others.

When you look at many of the controversial issues today, many are packaged with an intent to reduce accidents, improve health, save lives, and reduce health care costs (on both sides of the argument). The only difference between one argument and the other is how it is framed and how directly it impacts the individuals making the decision.

This is a compelling study in that it pinpoints a growing ease for people to vote for what used to be considered lifestyle and personal choice. However, with the adoption of a national health care program, people are increasingly willing to make personal, medical, health, and lifestyle choices for other people.

The extremes tell the story. Most people support the texting and driving ban because it represents an activity considered by most to be the highest form of distracted driving, and a significantly increased risk. But the bottom of the scale tells another story. How much you weigh may become a public issue.

Forgetting Publics: Kony 2012

When the Public Relations Society of America (PRSA) recently redefined the term "public relations," it was met with some criticism. Most of the criticism is aimed at three areas: the oversimplification of the definition, the sameness to past definitions, and the litany of terms (a.k.a. jargon) that need to be defined in order to understand the definition.

“Public relations is a strategic communication process that builds mutually beneficial relationships between organizations and their publics.”

While there is plenty to be unimpressed about, the one word that generally draws the most disdain is "publics." It rivals the use of "audience(s)," which is used by advertising and marketing, as receiving the most scorn among all words used in communication. And yet, despite confusion, both are needed.

How the neglect of "publics" undermines the Kony 2012 campaign. 

The general argument against using "publics" in defining people is usually tied to the negative sentiment associated with the categorization of people, which is said to dilute individualism and reinforce the old model of mass communication. Ironically, the opposite might prove to be true.

Identifying and prioritizing publics recognizes individual differences, desires, and concerns that various people (employees, investors, regulators, etc.) have about different issues. Knowing how different publics might react to any well-crafted message becomes paramount in how we communicate.

In looking at the Kony 2012 social media campaign, the importance of recognizing publics is crystal clear. While the campaign succeeded in employing tried and true tactics for social media, it neglected how various publics might respond to the well-intended message.

• The Ugandan government has rejected the campaign because it says that Joseph Kony is no longer operating in the country, a criticism initially brought to light by human rights watch groups.

• The people of Uganda, including victims, have had a furious reaction to the campaign after seeing screenings of the film in their country. The screenings have since been halted.

• People who categorize the Ugandan government as repressive claim that any aid will only pop up an unjust government. It could also accidentally destabilize the region.

• Philanthropic advisors have elevated the backing organization as a cautionary tale for donors, especially after several scrutinized the organization's financials and track record for transparency.

• Not everyone is keen on U.S. military intervention: not Ugandans, not Americans. Some critics draw parallels to U.S. involvement in other areas of the world, and fear it could do more harm than good. Some argue interest in the area has as much to do with oil as humanitarian efforts.

• And, not everyone is keen on the way that social networks can propel propaganda so quickly and efficiently that people support it before they have any facts whatsoever.

The examples are starters, but listing them is not meant to criticize intent. 

On the contrary, highlighting critical response is a means to demonstrate the importance of thinking about publics instead of a singular public (e.g.,  social media). If the campaigners had thought through their communication, there would have been fewer detractors. And if the organizers would have thought through their publics, the filmmaker would have been less likely to have a mental break.

Prior to the launch of the video and subsequent social media campaign, Invisible Children would have benefited from public relations and its practice in identifying, prioritizing, and communicating to various publics. What publics? Here are few considerations for starters.

• African governments. The African governments of Uganda, Democratic Republic of Congo, and South Sudan need to be unified in the decision to bring Joseph Kony and the Lord's Resistance Army (LRA) to justice. The LRA exists because it is not bound to boundaries whereas these governments cannot pursue aggressors into neighboring countries.

• African people. A real effort to support bringing Kony and the LRA to justice must to be supported by the victims. The filmmakers really needed to consider how they might react to the campaign. Had they educated the people before the campaign and not after, they might not have seen push back.

• Human rights groups. Invisible Children could have communicated with other human rights groups such as Amnesty International, Human Rights Watch, and others. By informing of them of the intent, recognizing their parallel efforts, or even partnering with more groups, it would have been less likely for the lead organization to be so scrutinized.

• U.S. Congress/political influencers. There is no question that American politics is partly driven by constituent correspondence. And while Invisible Children has had contact with many decision makers since it first began, it would have been prudent to have given politicians backgrounders about the campaign so they could have addressed the issue with intelligence.

• Celebrities/public influencers. It's always great to have a campaign spurred on by people who are already in the public eye. But much like politicians, the early success of receiving celebrity attention could have been compounded with advanced notice of the campaign, especially among those with an expressed interest in human rights.

• Special interest groups. There are several to consider, which would need to be broken out in any formal plan. But for the purposes of this post, an oversimplified list begins with pacifists (those who object to fighting violence with violence), non-interventionists (people who believe the focus needs to be at home and not abroad), and similar political action groups (opposed to what they call American imperialism or modern colonialism). It's doubtful these groups would become allies, but considering their views prior to the launch could have made the organization better prepared to address their varied concerns.

How communicating to publics in addition to the campaign could have made a difference.

While there is more to be learned from the Kony 2012 campaign, one lesson might be to stop defining a successful social media campaign as one that constructs slick and sharable messages that go viral.

A truly successful campaign is much more than that. It shapes public opinion into an actionable outcome. With Kony 2012, whether or not Invisible Children will achieve its objective is debatable (for now). What isn't debatable is that for all of its successes, the campaign has created new barriers.

What a shame it would be if the entire campaign renders itself pointless by raising awareness around the world while undermining the means to accomplish the objective at the same time. If the African people and their governments do not want support in bringing Kony or the LRA to justice, then what will have been accomplished beyond the opposite of intent and possibly detracting support from other important goals?

Being Wrong: Banco Popular Customers

When banks sell loans, you really never know what to expect. And with some banks, you never know what to expect from month to month. Popular Mortgage a.k.a. Banco Popular is much like that.

About a year ago, our small home improvement second was sold by Bank of America to Popular Mortgage, a subsidiary of Banco Popular, which is a subsidiary of Popular Inc. Ever since, the experience has been a comedy of errors, apparently ours.

The customer is always wrong with Banco Popular.

The first time it was our fault was because we received a statement two days before the due date. We sent the payment straight away. But their processing department is slow. So the payment didn't post until the day after their collection department called, two weeks after the due date (but still within their grace period).

Not wanting to take any chances with our credit rating, we made a payment over the phone (you can't pay via the Internet as they don't accept online payments). Meanwhile, the missing check posted the next day. They had it for more than a week, but didn't know it. No big deal. The extra payment was applied to the principal, and we offered remedies that they rebuffed.

The second time it was our fault started out as a mystery. The collection department called on Sunday but didn't leave a message. When we called to find out why they had called, we were greeted by a message that said their offices were closed. (They can call out, but you can't call in.)

In the interim, we checked with our bank. We had sent the check the same day that we received the payment (Feb. 21), they processed it on March 2 (the day after the due date), and it cleared our bank on March 5. This time, their collection department called even earlier within their grace period (March 11).

When they returned our call on the next day, "David" said he would open a ticket and research it. The practice is pretty standard in the banking business so I thanked him. What isn't standard is that he called back a few minutes later and told us to research it and send evidence of payment, with urgency.

We sent a copy of the check the same night, but found out it wasn't so urgent. After I didn't receive confirmation that the email was received, I called. He had the day off.

He never did confirm receipt of the email, but he did call the next day. He called to say we were wrong.

"The issue they had was because you didn't put your loan account number on it," said David, much less accommodating than in our previous conversation.

What happened was that they received the check (which carries the address of the home with the second) and statement coupon, but they were confused which account to apply it to (even though we only have one account with them). So, they cashed the check and set the money aside until someone claimed it.

I didn't know what to say. Apparently, I was wrong again. All I could do was chuckle and accept it.

You can learn a lot about investments by working with prospect companies. 

While we do business with several banks — various business and personal accounts — I have only ever invested in one. And I would never invest or willfully do business with Banco Popular. Why?

Three reasons. 

• Its operational structure is lopsided to account for the deficiencies it creates (e.g., its payment processing is overburdened or incompetent, which slows down their process and gives their overstaffed collection department more cause to be zealous, calling high credit score customers on days that they are closed even if the customers are well within grace periods).

• It violates its own stated values and creed (e.g., it claims to obtain customers' satisfaction and loyalty by adding value to each transaction but places the burden of research and evidence on the customer).

• It works too hard to prove itself right and the customer wrong (e.g., interactions frequently seem to bear it out, given the emphasis is always about discovering what the customer did wrong rather than addressing how they can fix their shortcomings).

I'm happy to admit I'm wrong with Banco Popular. But every now and again it pays for a company to work harder to make their customer right, at least as hard as the customer works to make them right.

The first time we experienced a problem, we had requested they send their statements out earlier (25 days out is relatively standard, but they said it wasn't their policy). We requested a payment book if they could not send them earlier (they refused because our account was an acquisition). And we asked about making payments online (they said they offer no such service).

They did suggest direct withdrawals from our bank account, but I don't believe in giving deficient companies that kind of access. Instead, we feel crummy every time they send a statement, paying it as quickly as possible and hoping for the best. It usually arrives between two and seven working days before the due date, which gives them a chance to prove us wrong every month. Go figure. It's their policy.

The policy seems to be working for them too. Here is an analysis of investor recommendations. Yikes.