Jeff Judy

Jeff's Thoughts - July 7, 2010

Trust vs. Avoidance

One of the things that makes you uncomfortable in a business relationship is when the other side seems to be avoiding the obvious. You may find that information comes from a business customer a little more slowly than it used to, and that when you follow up you don't get called back as quickly as you would like. Questions take longer to get answered.

Or you get together with a client of the bank and find that their business plans don't seem to reflect the upheaval of the last couple of years. It's as if nothing had changed . . . and you know that's just not realistic. So your confidence in the customer is shaken, and you start to look for problems.

Of course, as bankers we are committed to talking about the major issues of the day that affect our customers . . . aren't we?

The big fact of business life these days is the recession. Not only that, the word "banks" is heard constantly in media discussions -- and main street conversations -- about the causes of the economic downturn, about questionable financial practices, about bailouts and ethics and greed, frankly. You know as well as I do that the reputation of our industry is not the best, in the eyes of the public, at just this moment.

Now, do not send me a note to point out that community banks didn't pull the economy down, or that your bank was prudent when others were not. Your customers' perceptions are the issue. Your customers, and your potential customers, want to know more than they can get from TV and radio and the printed (and online) press.

And what will they conclude if they do not hear anything about the recession, where we have been, and where we are going, from their own bankers? This is too important to leave to press releases, PR firms, and lobbyists. This is between you and your customers.

Yet Barlow Research Associates recently released data (2nd Quarter 2010) showing that the vast majority of small business owners, nearly 75%, answered "No" to the question, "Has your bank been proactive in discussing the impact of the recession on your company?"

Maybe that kind of discussion isn't much fun. But they know there's an impact, and they know you know there is an impact. They are hearing a lot of sources saying that the banking industry didn't behave as we should have. But they have worked with you, or know your reputation in the community, and they are willing to listen.

What do you customers think, then, if you never bring up the recession? What do they conclude when you avoid the discussion entirely? They think the same way you do about them, when they avoid discussing the obvious.

They think you might have something to hide.