Learning From Bank of America’s Failure to Learn

4 Nov

Bank of America recently announced that it would cancel its plan to charge five dollars a month to customers who use debit cards. This change in responsibility comes in response to the outrage from customers across the country, angry with a seemingly unnecessary fee. Customers even switched from Bank of America over to the competition in anticipation of the new fees.

This action occurs only a few short weeks after the Netflix debacle and begs the question: what were they thinking? I understand that recent legislation and rules have limited how much banks can charge merchants for a debit card transaction and that the new fees are an attempt to recover some of that lost revenue. I also understand that other large banks were considering adding similar fees themselves. That being said, Bank of America ignored indicators that customers would have a serious problem with these new fees. Netflix essentially raised its prices without offering anything new since it simply split its product into two services. Bank of America tried to tack on fees without offering any new value, a dangerous proposition. President Obama certainly cannot control what the banks charge, however he has a huge impact on the opinions of Americans. Daring the president to exert his influence just cannot end well for anybody. To top it all off we are in the middle of a stagnant economy where any extra expenses are a burden. Adding new fees that do not provide more value simply is not worth the risk.

 
While hindsight is 20/20 and criticizing after events have already unfolded is easy, paying attention to the past is important so as not to repeat mistakes that have already been made. Bank of America failed in both its decision making and its communication because it failed to learn from Netflix’s failure to listen to customers. In effective business communication, being able to hear what the customer is saying is just as important as communicating decisions to the customer. Netflix failed in both aspects while Bank of America primarily failed to listen to its customers. In the future hopefully companies will be able to avoid repeating the mistakes of others by simply paying attention to communication errors that can lead to crisis.

by Daniel Cohen

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: