Good morning.
I’ve written frequently here about the pandemic’s dramatic effects on the relationship between companies and employees. It also has had equally dramatic effects on the relationship between companies and their customers. Fortune assembled a group of CEOs yesterday, in partnership with Salesforce, to share experiences on that topic. Perhaps most dramatic was the story told by Adam Aron, CEO of AMC Theaters, whose one-time customers became his investors and helped save the company.
“At AMC, we went from $450 million a month to less than $1 million a month in revenue…We literally furloughed our entire workforce, including me…Then what happened in the Robinhood/Reddit phenomena is people who were our avid customers got mad. They thought, a company that they patronize, that they have loved for all of their lives, was going to disappear because of the pandemic, through no fault of its own. And they rallied around us and they started buying our shares…They now own over 80% of the company…They actually call themselves a community.”
Other stories were less dramatic only in comparison. A sampling:
“At the height of the pandemic, two thirds of primary checking accounts were actually set up online or on a phone…At the end of 2019 it was about 50%, so that’s major increase.”
—Stephanie Cohen, Global Co-Head of Consumer and Wealth Management, Goldman Sachs
“In mid-March last year, everyone stopped driving, and so our margins widened extraordinarily. So the first thing we needed to do was do the right thing for our customers. So immediately, we gave back over a billion dollars in premiums. We gave 20% credits for April and May and then, subsequently, we looked across the country and reduced rates…(Now) our retention is the highest it has been in a long time, and I think our customers have rewarded us with loyalty.”
—Tricia Griffith, CEO, Progressive Insurance
“With the shutdowns, people started going outside and they were running, walking, hiking, so our products made the cut. We grew 27% year over year last year. We just felt like we’d won the lottery. This year as of yesterday we’re up 60%.”
—Jim Weber, CEO, Brooks
“In 2019, 2% of patient visits were done through some form of telemedicine platforms. During the peak of the pandemic, within two months it rose up to 75%.”
—Tomislav Mihaljevic, CEO, Cleveland Clinic
“From July of 2019 through March of 2020, I think we had roughly 16,000 virtual visits.
From March of 2020 through March of this year, we’ve had over 2 million virtual visits.”
—Joe Impicciche, CEO, Ascension
But some CEOs are now seeing a return to normal, like Anders Gustafsson, CEO, Volvo Car USA
“It’s a record year last year, a record first quarter, and a very good start of the second. The customers changed their behavior a lot, but they are going back to old habits.”
And some saw some clear lessons for the future:
“You used to compete based on the performance of your competitors in your industry.
Now the high bar for what you need to deliver to your customers is actually defined by whomever in whatever industry has come out with the next best experience.”
—Simon Mulcahy, Chief Innovation Officer, Salesforce
“If you don’t have proper connectivity, people saw during the pandemic, it was the difference between being furloughed and keeping your job… The reality is we can’t afford to have people off the grid anymore.”
—Ronan Dunne, Group CEO, Verizon Consumer
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Correction, May 27, 2021: A previous version of this newsletter essay misstated Anders Gustafsson’s title at Volvo.
TOP NEWS
Fossil bombshell 1
ExxonMobil has lost a vote over the future of its board, which will now have to accept at least two members proposed by investment firm Engine No. 1. The smaller company argues that Exxon is not as ready for the energy transition as it claims to be, and needs sector-specific guidance. Exxon has been trying to lean on future carbon capture and storage (CCS) technology to underpin its future, but Engine No.1 says that's no substitute for dramatically reducing fossil fuel usage. Fortune
Fossil bombshell 2
A Dutch court has ordered Shell to reduce its carbon emissions by 45%, from 2019's peak levels, by 2030. Shell had previously planned a 45% cut from 2016 levels, by 2035, but the court agreed with environmentalists that this was not "concrete" enough. Shell will probably appeal. The case is unprecedented in that the plaintiffs sought a policy change rather than compensation. Fortune
Sinopharm results
Good news for the developing countries that have been administering China's Sinopharm COVID-19 vaccine: it works! Sinopharm's trial findings have finally appeared a prestigious medical journal (the Journal of the American Medical Association) and the jab prevents symptomatic infections by 73%-78%, which is roughly what its state-owned maker has previously claimed. The ongoing lack of published results has made many people skeptical about Sinopharm and China's other big vaccine, Sinovac. Bloomberg
Blood clots
German researchers reckon they've found out why the Oxford/AstraZeneca and Johnson & Johnson vaccines very occasionally (as in, one in 100,000 vaccinations) cause blood clots, and say the adenovirus-vector jabs could be modified to fix the problem. J&J has apparently already spoken to the scientists and may adapt its vaccine accordingly. Financial Times
AROUND THE WATER COOLER
Tax proposal
Courageous CEOs can help deliver an international deal on a corporate minimum tax, writes B Team chair and former Unilever CEO Paul Polman in this piece for Fortune. "I know some of my corporate peers still see a global tax agreement as a kind of multilateral stitch-up, aimed at curbing legal tax planning," Polman says. "But a growing number of CEOs also recognize that healthy tax bases are a prerequisite for healthy communities in which their companies can thrive…Fairer, more consistent rules across countries will also level the playing field for business." Fortune
Clearview AI
European privacy activists have launched an international legal assault on Clearview AI, the controversial facial-recognition firm that serves thousands of law-enforcement agencies. They say Clearview AI (which is already being sued in California and Illinois over privacy infringements) breaks the EU's tough General Data Protection Regulation in many ways. Fortune
Bitcoin rollercoaster
Tesla's big Bitcoin bet is "looking more outrageous by the day," writes Fortune's Shawn Tully, who notes that "the special accounting treatment Tesla applies to its Bitcoin holdings will require the manufacturer Tesla to book losses called 'impairments' in its second quarter, even though its overall investment is still above water." The result, he posits, may not please Tesla's investors. Fortune
Swiss withdrawal
Switzerland and the EU have been negotiating a partnership agreement for years, but now the Swiss have walked away because they don't want to align with the EU on freedom of movement, industrial standards, state aid and so on. This isn't like Brexit—Switzerland was never an EU member—but it could lead to tensions nonetheless. Politico
This edition of CEO Daily was edited by David Meyer.
