Why I Fired Washington Mutual (Chase)

We all know how bad the use of tax payer dollars has been by the banks.  We have not seen the easing of lending in the system that is required to start a strong recover.  In addition, we have all heard the stories of new fees charged by banks to consumers.

It pained me to right this post.  I am not a fan of flaming companies or using public forums to highlight personal customer service issues.  I find them self centered but since I write about lots of different types of business issues on the Startup Whisperer^TM, I thought that I would use a personal plight of mine to reflect on how company acquisitions are often botched causing customer defection and negative synergies for the acquirer.

I have been a Washington Mutual customer for many years and they have lost me as a customer.  It pains me to do so.  But, the acquisition by Chase has severely impacted the manner in which customers are valued at the now mega bank.  We've seen a bunch of posts recently about bad acquisition planning and behavior cause major problems for customers and enterprise value for all involved (like this recent post from a Seattle-based company).  There are some obvious things that big and small companies need to remember during phasing in new processes, infrastructure, and communication during an acquisition.  Namely:

• Remember that customers are not robots – Robots are robots.  Customers typically have an emotional connection to a brand or service.  If you try to move too rapidly to change certain behaviors, you (the acquirer) will run into resistance and/or customer defection.  Its easy to make a financial decision but planning for that change needs to be thoughtful and consistent over a well thought out timeline.

• Customers have choices – customer service has to be one of the hardest jobs.  You can win or lose a customer based on the manner in which you deal with a customer service problem.  As customers, we all know that their is a spaghetti landscape of phone systems, call center locations (yes, some are international-based), and customer service levels.  You can tell which company has invested in customer service as a strategic weapon to engender customer loyalty.  A great example is Zappos (here is a post from the SW).  My own proxy was Washington Mutual versus Wells Fargo.  Night and day.  Wells Fargo was far more efficient in dealing with issues and concerns than Washington Mutual.  If you are running a low margin, commoditized business like banking, don't forget where your asset value comes from — your customers.

• Don't fire your good customers – you read a lot about how its wise to fire your unprofitable customers.  That makes sense to me.  It doesn't make sense to fire your best customers.  Banks are doing this by increasing fees and changing their products on their best customers.  As we all have heard countless times over the intercom when we land on any flight these days, "..we know you have a choice of airlines and we appreciated your business."  Unlike some air routes where you might have 3 really good choices in terms of service and pricing advantage in the airlines for any given route, there are a lot more choices for banks as consumers. 

So, why am I firing Washington Mutual.  Using the template above, here are the mistakes made by WAMU over the last several months:

1. Increase fees without notification to their customers – I am a high valued customer and where in the past fees were low or waived, that is not happening now. 
2. Arbitrary increases in APR without notification
3. Go green and get f@#$*! – Moving to paperless statements means you don't get email alerts when bills are due.  I guess you are a troglodyte if you don't know to setup alerts for paperless bill notification.  Of course, its not automatic.  The attitude (from the bank) is that we as customers should spend a bunch of time in their online credit card system configuring those types of features.  Of course, that’s not automatic. 
4. Changes to the online payment product – you can't do certain types of payment methods (e.g., payment to the same payee 2x month).  There are a bunch of changes to the Washington Mutual online product that have made my life more of a hassle.
5. Fraud?  Don't worry about it. – I caught a fraudulent transaction and the bank didn't think to offer up canceling my debit card.  That floored me.  Of course, it is now going to take me 14 days to get a new one.  It wont matter now since by then I will have ported over to a new bank.

The individuals at the bank are phenomenal (at WAMU).  At one point many of my family and friends have worked at Washington Mutual.  But, as we all know the values of an acquirer set the mood from the back office to the front office.  Chase has certainly set the mood for their entity.  It is not a good one.  Take note if you are an acquirer or acquiree.  Treat acquistions almost like a product launch.  Build a roadmap.  Make it an operational product launch.  Make it operational bulletproof and be careful on not powering consumer defection.