NEW YORK From credit card companies increasing penalties for late payments to banks raising interest rates on credit cards, the recession's bad news knows no bounds. But how consumers learn about such developments can determine how they feel about the companies that dictate them.
 
Often, people learn about such changes via direct mail. But the good news is, bad news doesn't have to taint the messenger, according to a recent study from Omnicom Group's Siegel+Gale. Rather, institutions can actually gain the trust of consumers if they communicate clearly and offer a contextual explanation for such moves, said Lee Rafkin, global director of simplification at strategic branding company Siegel+Gale in New York.

"What we found is, if you can go to the effort of actually explaining why you're in the situation and what you're going to do about it in a comprehensive and relevant way, people actually respect you for that," said Rafkin.

Siegel+Gale's The Simplicity Survey asked an online panel of 400 consumers to evaluate the effectiveness of four pieces of mail. One, from a credit card company, announced an increase in late fees on a charge card; another, from a bank, an interest-rate increase on a credit card; a third, a need for donations at a not-for-profit that cut its budget; and the fourth, the terms of a mortgage. Half of the panelists looked at two of the letters and the other half, the other two. Each answered questions that probed criteria such as clarity, credibility, relevance and usefulness, according to Rafkin. The mail was real, but company names were redacted.

The bank and credit card company scored poorly in the realm of trust and loyalty because the former's explanation for raising interest rates was cold and off-putting ("market conditions and maintaining profitability on your account") and the latter offered no explanation at all. "They're not interested in me as a loyal customer," wrote one panelist. "I'm just a number to them."

Conversely, the not-for-profit's 2 1/2-page explanation of how and why it cut its budget made it seem "honest" and "forthcoming" to one panelist, and a simple, one-page summary of the mortgage lender's terms came across as "straightforward" and "inviting" to another.