‘A good reputation buys you the benefit of the doubt when things go wrong.’ This is a quote I heard recently in a discussion about the pros and cons of marking and PR in financial services. My own contribution to the conversation was plagiarised from Warren Buffett, which touches on similar ground: ‘It takes 20 years to build a reputation and five minutes to ruin it’.
I find both these comments hold true in protection and the wider world of personal finance. All companies make mistakes, but having a sound track records, and ensuring that you use common sense and a decent helping of humility, can work wonders.
Sound crisis management can even enhance a company’s reputation. I recently familiarised myself with a bank whose tech errors left their consumers without access to their accounts. But the contrition, honesty and swift action they subsequently showed enhanced their reputation in their customer’s eyes.
Greater transparency and consumer-friendly action, such as the publication of claims stats, has enhanced the protection market’s reputation among journalists and the general public – at LifeSearch we have noticed this first hand when talking to clients on the phone – and the proactive PR efforts of a handful of providers and distributors has fostered a better image of what we do.
I think there still exists in large parts of this conservative market a feeling that no news is good news; that it is better to keep your head down and stay out of the public gaze than to proactively contact media outlets, particularly the consumer press, with good stories, lest they twist them to something more damaging to suit their own agendas. No doubt this is less of a threat for an adviser than it is for a big national or multinational organisation, but it is still a rare occurrence for either company type, and usually the result of a mishandling of the message than from any genuine malevolence on the part of the journalist and editor.
For the benefits greatly outweigh the perceived risks, both for the individual companies and for the industry as a whole, especially at a time when financial institutions are often blindly lumped together with CDO peddling derivatives traders in the minds of laymen as part of the ‘city corporates problem’.
When a negative story does arise, justly or unjustly, it’s the work you put in beforehand that can often come to your aid. Just as the old saying about mending your roof when the weather is fine has seemed so economically prophetic in recent years, so proactive marketing is important to establish reputation for the time when it start to ‘rain’, as surely it does for every company at some point. And that ruinous ‘five minutes’ in Warren Buffet’ words, can by lessened, mellowed or even averted by the reputational work that is put in during the previous sunny years.
Marketing and PR is not there primarily to spray out press releases about often-drab financial reports, its purpose should be to help explain to consumers why protection is crucial; that it saves people’s financial lives. It is a vital tool for both growing and protecting the industry, and the more proactively companies embrace it, the better for all.
Matt Morris is head of communications at Lifesearch