Advocacy is key to rebuilding banks' brand reputations
Think back before the sub-prime mortgage crisis that sent retail banking into a tailspin. Hindsight is 20/20, right? But, looking back at the lending practices of many banks and other financial institutions, could we have stopped this crisis? Maybe. But what really caused it? Bad business decisions? Lax lending guidelines? Greed?
Probably all of the above and more. But even as these unforgivable practices were putting our global financial system at risk, many banks ignored a measure that could predict how their customers would respond when the system nearly collapsed and when the honesty and transparency of banks would be questioned by nearly everyone. That measure is advocacy – the percentage of a bank's customer base that actively recommends it to others.
In March 2008, right before the US economy started to officially slide into recession, we studied the relationships between six popular US retail banks and their respective customers.