When you're investing for the long term, it behooves you to try to understand how a company is adapting to changing customer behaviors, expectations, and demands.
Doing that can be a visceral exercise, imprecise and subjective. We rely on the media to represent public sentiment as much as we rely on corporate filings and financial statements to represent the company's triumphs and challenges.
Consider Bank of America (NYSE: BAC), the much maligned megabank based in Charlotte, N.C. Since the financial crisis, the bank has found itself playing defense over and over again as Wall Street occupiers, criminal investigations, scandal, and massive financial losses continuously beat and bruised its public image.
Yet at the same time, CEO Brian Moynihan has slowly and steadily repaired the bank. Today it's smaller and more efficient and has by and large put its legal troubles behind it. With the books looking a whole lot better, we need to understand how the bank is going to repair its image among consumers.
Looking for an answer from a non-traditional source
Recently, the Harvard Business Review ranked public companies in the U.S. and U.K. based on the customer interactions on their Twitter (NYSE: TWTR) accounts. Twitter is a fantastic tool to use to assess B of A's current predicament, because it gives us a transcript of exactly how the bank is interacting with its customers.
Of the companies reviewed, Bank of America placed 11th best overall, and first among U.S. banks.
If that strong performance surprises you, you're not alone. I couldn't believe it, either. In the not too distant past, Bank of America was faring pretty poorly at Twitter. Actually, it was worse than bad. It was horrible. Here's one example, among many examples I found to choose from.
The company claimed that actual employees, not software, were running the Twitter account, which makes that poor performance almost worse. The company's social-media efforts were reinforcing its public image as a faceless, corporate monolith. It was emblematic of the company's perceived culture: greedy, unsympathetic, and maybe even a little incompetent.
Today's Bank of America Twitter presence is a different entity altogether. It's clear that smart, caring, and empathetic human beings are on the other side of the digital conversation. Problems are resolved smoothly. The steady stream of new Twitter "fails" has dried up. The company suddenly seems authentic.
The account today simultaneously represents the brand, provides customer support, connects with customers emotionally, and still allows the individual managing the account to maintain his or her own personality.
Gone is the corporate castle. Today there is a jack-of-all-trades human being who can help you with whatever you need.
Harvard Business Review put it thusly:
Companies of all stripes must understand that empathy isn't just about customer support. It is also about how companies relate to their employees and to the world at large. Social media is merely the most public and obvious means to measure it. We have come a long way from the era of unconcerned shop assistants and unaccountable call center workers.
Other U.S. financial firms have some ground to make up
Bank of America isn't alone in its struggle to correct the public-relations mishaps of the past eight years. It is, however, proving to be a leader in using social media as a tool to make real improvements.
Social-media competency is a skill that all companies must eventually master. It is how the millennial generation communicates. Word-of-mouth marketing has always been powerful; today that power is amplified exponentially thanks to the interconnectedness of social media.
Brands such as American Express and the Bank of New York Mellon -- two financial-services companies in the worst 50 of the HBR report -- should take note of not only the tactics Bank of America has put in place, but also the results.