Quick Study: Banks, Corporate Leaders Not Communicating Well in Financial Crisis; Sales Get Boost From Cause Marketing


*Financial Institutions Not Banking on Communications: Despite the chaotic economic atmosphere that has settled over the entire country (and world), financial institutions aren't keeping their customers calm by overcommunicating--or communicating at all. Findings from an Opinion Research Corp. survey revealed that: 46% of surveyed customers said the bank in which they have the most assets was not communicating with them enough; 42% who own the majority of their assets with mutual funds expressed disappointment in the level of communication from their provider; Brokerage firms appeared to be doing the best job of communicating with customers as 62% of survey respondents indicated that the level of communication has been good; 55% of respondents thought the financial crisis would have a negative impact on them; and, 24% didn't think it would impact them at all. Source: Opinion Research Corporation *Senior Leadership's Communications Lacking: Just as financial institutions have been lackadaisical in communicating with customers about the current economic crisis, corporate leaders have failed in the eyes of their employees. According to national research conducted by Weber Shandwick: 70% of surveyed employees expect the current economic and financial problems in the U.S. to have a negative impact on the company they work for over the course of the next year; of those, 26% believe their company will have to lay off employees, and 62% said their company would have trouble meeting its goals; 71% felt their company's leadership should be communicating more about current economic problems; 54% have not heard from company leaders at all on the impact of the financial crisis on their company; and, Of those who had discussed the financial crisis at work, 86% said their senior executives or management were seen as "believable" and "trustworthy" sources on the topic. Source: Weber Shandwick *Causes Affect Sales: According to research conducted by Cone and Duke University's Fuqua School of Business, cause-related marketing can exponentially increase sales. Nearly 200 research participants evaluated a new regional magazine and were exposed to either a cause-related or generic corporate advertisement for one of four focus brands. Afterward, participants entered a mock convenience store and were given real money to purchase a product in each of the four categories. Their subsequent purchase decisions revealed the following: 74% increase in actual purchase for a shampoo brand when associated with a cause (47% of participants who saw the cause-related message chose the brand, while only 27% who said the generic corporate advertisement chose the brand); 28% increase in actual purchase for a toothpaste brand when associated with a cause (64% of participants who saw the cause message chose the target brand versus 50% who viewed the generic corporate advertisement); and, Modest increases in the other two product categories tested (chips and lightbulbs); qualitative consumer responses showed that the issue, the nonprofit and the inherent nature of products were key factors in making cause-related purchasing decisions and helped explain why movement in these categories was not significant. Additionally, Cone conducted the 2008 Cause Evolution Study to better identify what drove substantial product sales for two of the four brands. The following factors appeared to be important when deciding to support a company's cause efforts: 84% want to select their own cause; 83% say personal relevance is key; 80% believe the specific nonprofit associated with the campaign matters; 77% say practical incentives for involvement, such as saving money or time, are important; and, 65% find emotional incentives for involvement, such as it making them feel good or alleviating shopping guilt, is important. Source: Cone & Duke University's Fuqua School of Business

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