Chase Bank declares war on me

This week I joined the legions of Americans who received notice that their credit card APR was rising, for no reason other than they can. In my case, it's doubling, from 7.24 % to 14.24%. I know some people would be happy with 14%, but I'm used to low rates on all my cards. On a personal level I'm outraged, as I've had this card for years and I'm never late with a payment. As a consultant, I'm baffled at this business model.

This card is issued by Chase, and like many banks, Chase has it's share of problems. Unfortunately, they think the way to solve their problems is on the back of loyal customers. I saw a web headline the other day that said "Banks are Declaring War...on You." Sadly that appears true.

Why not use this economic crisis as an opportunity to change strategy, and communicate a message to customers and consumers that we'll find a way to weather this crisis, but not at customer expense? Banks are perceived as greedy and evil these days, so why add evidence to the perception by punishing loyal customers? Why not present Chase as a bank that will innovate and improve itself and find other ways to cut costs and increase revenue?

But Chase won't. It's a dinosaur and unwilling to shed its arrogant behavior anytime soon. I called Chase and let them know my response, which is to shred my Chase card and never use it again. More people should do the same.

Watch for signs and make your move (in business, that is).

The economy is going to recover. When, I don't know, nobody does. But it will recover. It always does. One big question is what it will look like when that happens. I think it's essential for those who fret about the economy to look at small signs of change. Not in the usual way, not by looking at the usual indicators like the Dow or consumer spending reports and the like. I mean take notice of small changes or tweaks in the nature of how business is operating in the turmoil of today.

The Wall Street Journal had an interesting article the other day describing how while companies are laying off large numbers of employees, they are also hiring at the same time. But who they're hiring and for what skills is what's different. In the struggle to survive, businesses are changing and adapting as they try to navigate their way to a profitable future. So rather than hire for the same skill sets for the same jobs in the same way, new employees are brought on for positions that didn't exist before or have changed job descriptions in adaptive ways.

Every business in America should be doing this. We don't know how radical or how nuanced the changes in the economy will turn out to be, but smart companies will watch carefully and make these adaptive changes along the way. Those that do will be in a better position to thrive once we pull out of this. In fact, they may well begin to thrive now! Why not? What better time to innovate and experiment? Hunkering down will leave you where you were before this whole mess began. What's the point of that? Crisis brings opportunity for those willing to step up, and they will see success first.

After my small rant on the administration's meddling with the Chrysler's marketing budget, along comes the state of Washington with its own form of a bailout. In trying to emulate the Washington D.C. mindset, Washington state has decided to give its newspapers a 40% cut in business taxes to help them stay alive and print another day. One of the papers has already stopped publication and changed to an Internet-only format. Other newspapers around the country have struggled with low subscriptions and falling ad revenue as people look for news in other ways and without the perceived biases plainly evident in many of the nation's largest papers.

If newspapers are failing, what should we do first? Well, I think we should look at the leadership of the industry, its collective attitude and mindset, and the leadership of individual papers. If there was ever a case study of failed leadership in a single industry, this is at or near the top (along with the automakers and airlines). I have always loved newspapers since I was a kid, and still find great satisfaction in holding a paper in my hands and reading every section. However, I no longer subscribe to any paper and get all my news online from several newspaper Internet editions and online news sources. I would love to see the newspaper industry succeed, but on their own merits and not because the federal government subsidizes them.

Technologies come and go according to the marketplace and the vision and leadership of particular companies. I love horses, but I'm glad the horse and buggy industry didn't get bailed out. The horseless carriage won out and we have been the better for it as a nation (can't argue that, all environmental arguments aside). Newspapers have done a terrible job of adapting to market needs and trends, and their editorial policies are a national joke (I loved one comment from a reader of the Seattle Times...the online edition... about the new tax break policy: "Why don't they create one paper and call it Pravda?").

Really, what do we want? Do we want Washington or state governments to step in and try to save certain industries? Or do we allow the market, that is, you and me, decide who wins and loses according to what we're looking for?

Detroit vs. Washington

Here's a headline that shocked me: Obama Halves Chrysler's Planned Marketing Budget. That's the president of the United States telling an American automaker how much it can spend on advertising. This is what we can expect when quasi-nationalization occurs in private industry. Accept bailout money and lose operating control, even in marketing. I have to say that I hate this concept and it worries me to see this happen. Our economy is built on the principles of free enterprise and you (in theory) rise or fall according to your merit and the marketplace. Unless the federal government steps in and takes control as a return for the cash to keep the doors open. If you thought Cerberus couldn't run Chrysler, wait 'till you see the government try!

A while ago the head of Russia was visiting the US and noticed some highly critical remarks published in a local paper about his host, the American president. He asked our president why he didn't simply fire the newspaper editor. The response: I can't do that; we don't do things that way in the United States." Well, look at what's happening now. Government steps in with money, and suddenly executives are fired and marketing budgets are cut. Is this what we really want?

Great customer service should be the norm, right?

I had a couple of interesting customer experiences this past week that caused me to reflect on the relationship between leadership and customer service, and marketing, too. First with a bank, then with a major retailer.

My bank is US Bank and I'm generally pleased with them. I'm especially pleased they didn't get involved with making bad loans in the sub-prime market. They're ranked as one of the strongest banks in America right now. I used my local branch outside Salt Lake City largely because the tellers were friendly and polite, and Karen, the Customer Service Manager was simply terrific. A new branch manager was brought in with no evidence of leadership skills and promptly micromanaged and browbeat the tellers, all of them, into leaving. Karen requested a transfer to another branch as fast as she could. Branch customers were furious and a number of them left. That included me as new tellers were poorly trained and turnover seemed high. I followed Karen to her new branch because I knew what service would be like wherever she went and I was right. I gladly drive 15 minutes instead of five for that. I visited my old branch last week for a quick deposit and the teller didn't greet me, never smiled, and was generally unpleasant. Leadership shows, one way or the other.

Now for Sears. Here is a retailer that has struggled mightily to stay alive and has made some truly awful business decisions along the way. I still shake my head over the K-Mart merger, and they've done nothing with the acquisition of Land's End except to milk it for cash. But they still make pretty good tools and power equipment, and the Craftsman guarantee is still in effect. I know because I bought a new Craftsman lawnmower a week ago, and it broke not 30 minutes into using it for the first time. After a round of mild cussing, I drove it back to Sears with retribution on my mind. To my surprise, there were no questions, just apologies and a brand new mower in my car. Craftsman equipment has always had an unconditional guarantee and I've known people to take screwdrivers back that broke after having obviously used them as chisels and received a replacement on the spot. I left completely satisfied.

In Sears's case, their leadership team has made some crazy business decisions but were either smart enough or lucky enough to keep their Craftsman guarantee in effect. My defective mower was an anomaly and customer service was great. Why don't they advertise that more? Shout it from the rooftops and get your customers back! OK, it may take more than that, but it would be something. For US Bank, there's a middle management problem which is a senior management problem since they're not paying attention to dumb decisions made by middle management (and around it goes).

In this economy it's imperative to get your business house in order, change and improve what you do and stay (or get) customer-focused. Consumers have so many choices; why should they choose you? Give them, give us, a reason. Please!