A broken Egg?

Pic rules as usual. Credit


Under the looming spectre of the credit crunch (where the hell did that phrase come from by the way) and the – ahem, problems – faced by Northern Rock over recent months, certain financial institutions have starting becoming a little antsy.

Last week, Egg made its own contribution to calming down the public by announcing that it was to strip almost 10% of its customers of their credit cards with virtually immediate effect. No longer would they be able to spend any more on the cards, but, graciously, Egg have permitted those affected to continue to pay their minimum payment until the balances are settled. How very kind. (Only the cynical would suggest that Egg highlighted the ‘minimum payment’ route because it’s by far and away the most profitable course of payment for them).

Commentators are split about this decision. Whilst some herald it as a masterstroke and an example of extreme business prudence, others (often found residing within the letters’ pages of the press) are screaming about how grossly unfair it is (‘I called Experian and I have a perfect credit score’). I’m probably somewhere in the middle. As a customer of Egg (clearly their risk algorithm isn’t that effective as I still have my credit card) I can see the business logic of the move, but as an individual with a professional interest in world of branding, I think they’ve gone about this in utterly the wrong way – in fact, in a way that’s got the potential to do some long term damage to their brand.

Granted, this is a difficult gig to pull off. You’re always going to piss people off. But this can be managed, and as such I have two major issues with the way Egg have handled the situation. Firstly, who on earth thought it was a good idea to continue hawking for new business whilst this was going on? On one hand we have them quite loudly recalling thousands of credit cards, whilst simultaneously on the other we have them touting 0% deals in the pages of the national press. For me this behaviour is grossly incongruous (bordering on offensive) and simply fuels the image of the greedy, faceless corporation (which Egg have spent years trying to avoid) – couldn’t they have waited a week or so before beginning another assault on the nation’s debters? Wouldn’t it have been better to use the space to communicate exactly why they had taken the decision in first place rather than expect punters to piece together the economic rationale from hearsay and comment?

The second issue is the seeming lack of return path for Egg customers to debate and discuss their situation with the bank. As an irate consumer there is nothing worse than feeling utterly cut off, with no room for further conversation. The ‘they don’t care’ mentality is powerful and hard to shake off once established – and one which, if the customers’ comments are to be believed, Egg are doing their best to cement.

Egg should be careful. When the economic issues eventually blow over (be in six months or six years) they will still exist and possess a brand that will be required to sell product. How a brand behaves during tough times could well have a major effect on its success when things are brighter.

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