It’s not all good news on Wall Street these days. That’s because despite an improving economy and recent record highs in the stock market, nearly half (44%) of financial services companies lost 5% or more business in the past 12 months because of ongoing reputation and customer satisfaction issues, according to new findings by PR firm Makovsky.
The losses are based on total sales of these companies and are estimated at hundreds of millions of dollars. There was an average loss of 9% of business among all companies surveyed, including banks, brokerage firms, asset management firms (mutual funds, venture capital firms), insurance companies, real estate companies, credit card companies, mortgage lender, credit unions and financial technology firms.
“Almost five years later, the financial crisis has transformed into a reputation crisis for financial services firms and there is still a long road back to recovery,” stated Scott Tangney, executive vice president of Makovsky.
“Sixty percent of marketing and communications executives in charge of restoring and building brands at financial service companies told us it could take up to another five years to restore their reputation to 2007 (pre-financial crisis) levels. Only about one quarter of financial services firms told us that their corporate reputation has already been completely restored to pre-financial crisis levels.”
The study also revealed that:
• 56% of financial services marketing and communications executives believe their company’s communications and marketing programs have only been somewhat effective in changing external and internal perceptions of their company.
• Only 18% of companies report programs to be very effective in improving perception.
• Top negative factors ruining reputation: 61% said negative public perception of the financial services industry and 52% said their company’s management of a crisis, compared to last year’s: liquidity and capital challenges and subprime mortgages.
The 2013 Makovsky Wall Street Reputation Study was conducted online by Echo Research, which interviewed 151 executives and managers responsible for the management and supervision of communications, investor relations or marketing at large and mid-sized publicly traded and private financial services institutions, in May 2013.