CitiBank shows how to fail at failing in the Costco Visa-Amex conversion 

In preparing for battle I have always found that plans are useless, but planning is indispensable.”

Dwight D. Eisenhower

It seems so simple: All CitiBank needed to do was convert an estimated 11 million card members to their new credit cards—all on the same day.

What could possibly go wrong?

It seems CitiBank failed to plan. So, they planned to fail.

CitiBank Visa tests Costco’s Brand Stickiness

Pure and simple, Costco turned its brand’s good will over to CitiBank Visa in the conversion process from American Express. That’s a decision they’d probably like to rethink given what happened next.

CitiBank’s catastrophic fail in getting cards delivered, activated, or even dealing with customer calls was only compounded by their failure to effectively manage the situation and preserve any measure of good will.

How do you fight a fire?

As tempers blew, CitiBank doubled down on their fail by taking cover under corporate suit-speak. CitiBank’s 800-number on hold message cheerfully explained how to activate cards on-line, repeated every twenty seconds. With hold times lasting over an hour (1:42 for me), it rubbed digital salt in a growing wound. Strike one.

Given the lack of anything approaching a mea culpa, it seems CitiBank failed (is failing) to understand that there’s a fire. Stopping a fire means either removing fuel or oxygen. Lack of working cards was only the fuel. Lack of compassionate engagement was the oxygen. Strike two.

The fire soon spilled out onto Twitter, Facebook and the news. Headlines reading “Costco just made a huge change and furious customers are threatening to cancel memberships” and “Costco’s switch from Amex to Visa is off to a rocky start” only helped stir the pot. Strike three.

Meanwhile, back at the CitiBank Visa website, they finally added: “If you’re trying to call Customer Service, we apologize for the long wait time that you may encounter. We’re experiencing high call volume.” No kidding.

Sorry, I’m not scripted to help you

A robotic response technique doesn’t mollify customers, it infuriates them. When, on the third day of waiting for my next-day card delivery, I wrote to ask for a tracking number, I received this reply:

Very sorry for the delay’s (sic)…We’re experiencing a high call volume due to interest in our new Costco card. We’ll reach out to assist you as soon as the next specialist becomes available. We appreciate you (sic) patience and look forward to assisting you.”

You can’t make this stuff up. Using boilerplate language on Facebook is so confoundedly inept, that it only demonstrates how unprepared CitiBank was for this calamity. A more effective reply might read:

Well, this isn’t going the way we’d like. We know you value and want your Costco Visa card. We want you to have it too. Sorry for the delay. Please hang with us as we work to get yours delivered.

Make no mistake, there’s a fire in your future

What makes this tragic: it didn’t have to be this way. Don’t let it be for you. When a PR fire sparks in your business, handling it better than CitiBank could be as simple as adapting what worked for Seinfeld’s George Costanza: think of what CitiBank did and do the opposite.

Four ways CitiBank could have won at failing

Be like Ike: Plan ahead to keep a customer service spark from becoming a fire:

1. Own it: You screwed up. Admit it. Throwing yourself on your own sword is the shortest route to good will. Everyone makes mistakes. Admitting one makes you human.
2. Empathize: Instead of (inaccurately) proclaiming long hold times as proof of interest in your product, express a measure of empathy and provide an alternative contact method.
3. Communicate: Show customers you’re making progress. Keep the conversation going. CitiBank could have sent out overnight tracking numbers and posted an ongoing tally of activated cards.
4. Make it right: CitiBank could suck all the air out of this fire by offering 90 days waived interest on every card. They won’t. But, that doesn’t mean you can’t provide some kind of make-good when a fire rages at your door.

Any of these are cheap, easy and go a long way to salvaging a win from a fail. Three reasons I’m not holding my breath to see any of it from CitiBank.

This is so going to wind up like childbirth

The pain of delivery is soon forgotten in the joy of beholding a newborn. Same goes for the ultimate delivery of CitiBank’s wayward Visa cards into waiting hands.

Eventually, this episode will fade from the news. Life will go back to normal for millions of inconvenienced Costco shoppers. As it turns out, only about 2% of cardholders encountered problems. Most of them will, in time, forgive. But, will they forget? That kind of brand damage sticks not only to CitiBank Visa, but Costco as well.