Keep up the PR: when it comes to reassuring customers about your bank's safety and stability, the most effective approach is to involve all your employees in an extensive, long-term communications effort.

• Author: Spaeth, Merrie
• Position: Calming Customer Fears

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The bad news is everywhere. Customers have heard on television and read in the newspapers that some big-name banks have invested too heavily in risky subprime mortgages. Some of these banks have failed; others have been taken over; still others are receiving government bailout funds Customers are worried. They are asking themselves: "Is it possible that our bank is in trouble too?"

You need to reassure customers today that your institution is financially safe and secure. But how?

Some banks say the best response is silence--any attempt at reassurance might simply raise more questions in the mind of spooked customers. This approach is wrong. Whenever there ix a potential problem involving a bank, the financial institution needs to communicate its positive message. Otherwise, the bank loses control over the stories that customers hear and remember--to the detriment of the financial institution's best interests.

Other institutions have responded with advertising: television, print or letter campaigns.

This approach is better than nothing. Advertising, in many cases, can be a useful component of a comprehensive campaign--but it is not the solution by itself.

The problem is essentially a communications issue, and the best answer is a dynamic public-relations response--one that involves all bank employees in getting the message out and cementing long-term relationships with the customers.

Before I explain the elements of an effective public relations response, I would like to point out that the current situation is actually an excellent time to deepen relationships with existing customers. As Alan Hyman, chairman of Fremont Bank, Fremont, Calif., (assets: $2.1 billion) says, customers today are more aware of financial institutions than they have been in a long time. "People are paying attention to banking. They may be worried, but they're listening."

Public relations is fundamentally communications. Many years ago, we recognized that financial institutions approach communications with the idea of what they want to say or what they think their listener--internal or external--needs to know. Yet, when you ask, "How much does the listener remember from what you say?" The answer is usually, "A lot of a little."

Before you start you PR campaign, focus on a shared definition of good communications. That is, communications aims to influence what the listener hears, believes and remembers.

Words drive memory

Words are the first and most important component of communication because they stick in our memory. We divide these into "good" words, the ones you want the listener to remember and pass on, and "bad" words, the ones you don't want the listener to remember. In today's environment, it isn't hard to know what the "good" words are: safe, secure, well managed, responsible, accountable.

The current communication challenge is, at heart, a problem of negative words--fail, bailout, shaky, loss, bankrupt, insolvent and so on--and highly memorable statistics. The "$100,000"--now $250,000--FDIC "guarantee" has caused, as all bankers know, incredible confusion and misunderstanding.

The challenge for banks delivering the positive message of "safety and soundness" is finding the messenger or communication route that works best in today's environment.

The influence model

Use the "influence model" as a strategy map for your bank's communication initiatives. It identifies three major "routes" of communication: what the customer knows you control, what the audience perceives is the objective media, and finally, verbal communication, particularly person-to-person dialogue.

The goal is to use all three networks, use them proactively, and have the information or message aligned on all three. In today's environment, the "audiences" are being bombarded by negative news through the media, and banks need to use the other two networks to counteract the negative words.

In the current market environment, banks have stampeded to traditional advertising to trumpet their safety and security. There have been full-page ads in national and local newspapers promoting this concept. A famous advertising man once said, "I know 50 percent of advertising is wasted. I just don't know which 50 percent." We suspect it's a...