Those wacky bankers
This is a staggering story that I'm putting out on here because I know a lot of my readers are not knitters and might not hear about it otherwise but it's worth a read because it's just so nuts. This story is just breaking and no one has found out the name of the bank yet, but I'm pretty sure they will and when they do, that bank is going to suffer because online knitters will change banks in droves (not to mention the bad PR). Do not underestimate the power of the knitters!
The Yarn Harlot explains it well but the basic story is as follows:
Blue Moon Fiber Arts, who make the incredibly popular Socks That Rock sock yarn, run a hugely successful annual sock club where you sign up and get bi-monthly limited edition yarn and a host of other goodies like patterns, binders etc. The competition to get into the club is intense - it sells out almost instantly, there is a waiting list and knitters around the world consider selling their firstborn to join. Despite the club having run in the past, this year, BMFA's bank went more than a little insane and decided that there couldn't possibly be that many people interested in knitting socks and therefore BMFA must obviously be running a scam. So they arbitrarily shut down BMF's business account and refunded the money to all the people who had signed up to the club.
WTF?
BMFA is a small business whose success is almost entirely down to word of mouth on the internet and their presence at knitting fairs. They are not a huge company, they are nine women producing hand-dyed yarn in Portland, Oregon - having their funds denied and their bank account suspended could easily have put them out of business.
Now OK, your average banker might not know that sock knitting is huge and that knitting is even more huge - fair enough - but surely it wouldn't have been at all hard to find out? BMFA is a YARN COMPANY, surely it shouldn't stretch the imagination too much if you find out that, shock, horror, they sell YARN! Obviously fraud is an important issue but the bank apparently made this decision without doing any basic research whatsoever, which certainly doesn't give me much confidence in their ability to manage money. What, they couldn't spend just five minutes on google verifying that there are indeed such creatures as 'sock knitters' and that they join strange organisations called 'sock clubs'? They couldn't call some of the customers and check the charges were legit? There had been no customer complaints, they did this out of the blue.
The idea of clubs selling things on a monthly basis is hardly new. You can join wine of the month clubs, chocolate of the month clubs, book of the month clubs, weird little plastic figure of the month clubs - so why should the idea of a sock yarn club seem so strange? And it's not as if BMFA's is the only yarn company doing this, lots of the yarn companies run clubs. Again with the poor research.
This story is spreading around the knitting blogs like wildfire and has already been passed on to other blogs like boingboing and the mainstream media (we'll see if they pick it up). Five freaking minutes on google vs PR disaster in the making? Hmm, I'm thinking that might have been a bad business decision there, bank people.
One of the most interesting aspects of this story for me is that it also really highlights the power of blogging. Whereas ten years ago this arrogant and heavy handed behaviour by the bank might have bankrupted this small company, instead BMFA are being inundated with orders as knitters rush to support them by buying extra yarn. It will still probably still cost BMFA money - they've lost interest on the money that should have been in their account, plus they've had to change banks and rejig their website to accept the new banking details so their website is still down and they can't currently accept online orders and they're spending time and energy sorting out this mess that they'd probably rather be spending dyeing yarn - but in the long run it may end up giving them lots of positive exposure whereas the bank is likely to get nothing but well deserved brickbats.
I find it fascinating that many big corporations seem so completely unable to cope with the realities of the new online economy. It seems to completely weird them out. And that's to be expected to a certain extent, banking tends to be conservative in nature, but I see it in a lot of the other big companies who really ought to know better. They just seem to be fundamentally unable to cope with the speed and nature of the changes that the internet is bringing. Of course, bigger companies find it hard to react quickly to change but I find it interesting that many of them also seem to actively resist change. You see this in the ways that the big music and phone companies are reacting - whinging and crying about how the internet is ruining their business and trying to force customers to go back to how things used to be instead of altering their business models to reflect the changes that have already taken place. They will probably lose eventually but apparently they intend to flail around like big old messy dying dinosaurs before they do. It's the smaller companies who are likely to do well out of this - small companies with good products and good customer service can build a loyal and dedicated following online.
The Yarn Harlot explains it well but the basic story is as follows:
Blue Moon Fiber Arts, who make the incredibly popular Socks That Rock sock yarn, run a hugely successful annual sock club where you sign up and get bi-monthly limited edition yarn and a host of other goodies like patterns, binders etc. The competition to get into the club is intense - it sells out almost instantly, there is a waiting list and knitters around the world consider selling their firstborn to join. Despite the club having run in the past, this year, BMFA's bank went more than a little insane and decided that there couldn't possibly be that many people interested in knitting socks and therefore BMFA must obviously be running a scam. So they arbitrarily shut down BMF's business account and refunded the money to all the people who had signed up to the club.
WTF?
BMFA is a small business whose success is almost entirely down to word of mouth on the internet and their presence at knitting fairs. They are not a huge company, they are nine women producing hand-dyed yarn in Portland, Oregon - having their funds denied and their bank account suspended could easily have put them out of business.
Now OK, your average banker might not know that sock knitting is huge and that knitting is even more huge - fair enough - but surely it wouldn't have been at all hard to find out? BMFA is a YARN COMPANY, surely it shouldn't stretch the imagination too much if you find out that, shock, horror, they sell YARN! Obviously fraud is an important issue but the bank apparently made this decision without doing any basic research whatsoever, which certainly doesn't give me much confidence in their ability to manage money. What, they couldn't spend just five minutes on google verifying that there are indeed such creatures as 'sock knitters' and that they join strange organisations called 'sock clubs'? They couldn't call some of the customers and check the charges were legit? There had been no customer complaints, they did this out of the blue.
The idea of clubs selling things on a monthly basis is hardly new. You can join wine of the month clubs, chocolate of the month clubs, book of the month clubs, weird little plastic figure of the month clubs - so why should the idea of a sock yarn club seem so strange? And it's not as if BMFA's is the only yarn company doing this, lots of the yarn companies run clubs. Again with the poor research.
This story is spreading around the knitting blogs like wildfire and has already been passed on to other blogs like boingboing and the mainstream media (we'll see if they pick it up). Five freaking minutes on google vs PR disaster in the making? Hmm, I'm thinking that might have been a bad business decision there, bank people.
One of the most interesting aspects of this story for me is that it also really highlights the power of blogging. Whereas ten years ago this arrogant and heavy handed behaviour by the bank might have bankrupted this small company, instead BMFA are being inundated with orders as knitters rush to support them by buying extra yarn. It will still probably still cost BMFA money - they've lost interest on the money that should have been in their account, plus they've had to change banks and rejig their website to accept the new banking details so their website is still down and they can't currently accept online orders and they're spending time and energy sorting out this mess that they'd probably rather be spending dyeing yarn - but in the long run it may end up giving them lots of positive exposure whereas the bank is likely to get nothing but well deserved brickbats.
I find it fascinating that many big corporations seem so completely unable to cope with the realities of the new online economy. It seems to completely weird them out. And that's to be expected to a certain extent, banking tends to be conservative in nature, but I see it in a lot of the other big companies who really ought to know better. They just seem to be fundamentally unable to cope with the speed and nature of the changes that the internet is bringing. Of course, bigger companies find it hard to react quickly to change but I find it interesting that many of them also seem to actively resist change. You see this in the ways that the big music and phone companies are reacting - whinging and crying about how the internet is ruining their business and trying to force customers to go back to how things used to be instead of altering their business models to reflect the changes that have already taken place. They will probably lose eventually but apparently they intend to flail around like big old messy dying dinosaurs before they do. It's the smaller companies who are likely to do well out of this - small companies with good products and good customer service can build a loyal and dedicated following online.