1-VancePackard-th-091007Rhetoric as a form of persuasion relies on three basic appeals: 1) logos or persuasion based on logic and facts, 2) ethos, persuasion based on the character or celebrity of the speaker delivering the message, and 3) pathos, a reliance on emotional or humorous stirrings.

In my experience, the vast number of public utterances, declarations, and slogans coming from companies both large and small on the subject of customer service – if not all claims having to do with a  product’s presumed prowess – is rarely rooted in fact. Little has changed since 1957 when Vance Packard wrote the immensely popular book, The Hidden Persuaders. In that book Packard stated that we rarely buy products and services based on logos – that is, the intrinsic qualities of a product or service. Rather, that we fall prey to appeals that play to our emotions. Examples abound.


Wachovia Bank, once one of the largest banks in the nation, publicly, and with great fanfare, announced that it had made an investment of $100 Million to upgrade frontline staff to better serve its customer base. Crowing about the recently released American Customer Satisfaction Index (ACSI), which showed Wachovia was ranked the number one bank for customer satisfaction, its chairman and CEO, G. Kennedy Thompson, had this to say: “Providing excellent customer service is a hallmark of our company, and this award is a testament to our success.”

Meanwhile, the bank was processing unauthorized, unsigned check transactions from thousands of accounts; representing auction-rate securities – complex, illiquid debt instruments – as alternatives to liquid money-market funds; ignoring anti-money laundering federal guidelines; and selling negative amortization mortgages whose principal balance would increase if the customer chose the lowest payment option available. In the first instance, court documents show that bank executives knew of the fraudulent scheme that allowed telemarketers to steal hundreds of millions of dollars from unwary depositors but failed to stop it. The reason: telemarketers were a huge source of revenue for the bank. As to the bank’s sales practices of auction-rate securities and negative amortization mortgages, and its disregard for money laundering safeguards it is clear the intent was to deceive the consuming public while feathering its own nest. So much for “customer service as a hallmark.”

Wachovia’s experience is proof positive that clichés and slogans alone won’t cut it. In April 2008, Wachovia agreed to pay $144 Million to settle claims that it allowed telemarketers to bilk depositors. In June 2008, Mr. Thompson was ousted. In July 2008, the bank eliminated 11,000 jobs. In August 2008, regulators forced the bank to buy back $9 Billion of auction-rate debt, pay a $50 Million fine, and make no-interest loans to consumers hurt by the fraud. In October 2008, the bank a victim of the subprime mortgage implosion it had a huge hand in inducing, got its comeuppance for its systemic cheating as it was picked over by both Citigroup and Wells Fargo. In the end, Wells Fargo prevailed by offering $11.7 Billion for a bank that was worth ten times that amount only one year earlier.

Oh, and what about Wachovia’s number one ranking for customer satisfaction in the ACSI survey? It turns out that on this occasion the ACSI survey only covered five banks – this, out of a bank population of roughly 7,000 banks in the United States at the time of the survey. Most egregiously, however, the bank’s mortgage, investment, and brokerage customers – the source of many of the bank’s major transgressions, aside from money laundering and unsigned check fraud – were not included in the ACSI survey. So much for a number one ranking!


Wachovia’s profound disregard for the customer is perhaps epic but lest consumers think this is a one-off episode consider that every claim from the niggling – Blockbuster’s “no late fees” acclamation which proved to be false – to the tragic – Bernard Madoff’s “I made a lot of money for my clients” when, in fact, he was running a $65 Billion Ponzi scheme  which in the end resulted in multiple investors taking their own lives – puts the onus on the consumer to reach for the logic and facts of a supplier’s service claims.



Vance Packard's book The Hidden Persuaders, ab...

Vance Packard’s book The Hidden Persuaders, about media manipulation in the 1950s, sold more than a million copies. (Photo credit: Wikipedia)


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