Upholding your good name X Y: you should periodically monitor customers' perceptions of your bank's reputation. After all, from a marketing viewpoint, your institution's image is one of its most valuable assets.

• Author: Johnson, Winslow
• Position: Image Management

Your bank must control its reputation, or that reputation will control the bank. Remember, a reputation is built up slowly over a long period. It can be damaged, however, very quickly. It is easy to imagine how bad publicity or a group of employees with a negative attitude can generate a lot of mistrust in a short time. Ideally, you should take ongoing steps to minimize this possibility. The bank should practice policies that foster trust. You should also periodically monitor the bank's reputation and take immediate action whenever its reputation starts drifting off course.

The cost of a bad reputation can be high. The symptoms may be subtle, but can quickly erode the strength of a financial institution. Major longtime customers move their business to competitors. Potential customers no longer call. With a bank traded on a public exchange, the price of the bank's stock begins to drop because stockholders are no longer willing to pay a high price relative to the bank's earnings. What may be less subtle are the actions that management may have to take due to a bad reputation. Massive amounts of time and money may have to be spent on damage control to repair a fallen reputation and rebuild trust.

An environment of mistrust

An opportunity exists for a bank to stand out from its competitors by having an outstanding reputation. We now live in a time where there is a lot of mistrust of corporations. The news media is constantly bombarding the public with negative reports. This has resulted in disillusionment with many businesses, including banks. People are looking for organizations they can trust, especially banks. They want to deal with financial institutions that have character and are willing to do what is right. A bank with a strong positive reputation has a powerful advantage over its competition. It has the ability to build an emotional bond with all those it deals with.

In today's environment of corporate deception and misconduct, many people are prepared to think the worst about the organizations they deal with. The large number of bank mergers has not helped to reverse this mistrust. Some customers develop a negative impression of large banks that have merged with their institution. They sometimes resent the fact that the new bank was forced on them through a merger. Many liked their old bank, and now see the new bank as a big, cold, impersonal institution that does not care about their needs.

Today's banking customers are tough and...