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Creating an Effective Social Media Strategy in Financial Services

3 Recommendations for a Successful Social Media Strategy

The highly regulated environment of the financial services industry has likely contributed to the fact that many banks and financial institutions have been relatively slow to embrace social media engagement. However, with a deep understanding of the landscape and the compliance issues that govern the industry, financial institutions can have great success within the social media landscape.

Social media offers financial institutions the opportunity share thought leadership and promotional offers and increase customer engagement, on a low cost, high value platform, presenting a tempting return on investment. Research suggests that engaging more financial customers in a well-planned and carefully organized social media marketing campaign is worth the investment. While doing research for Akamai's recent whitepaper. "Leveraging Technology to Improve Customer Engagement", I read a Gallup report and found that fully engaged customers:

  • Contribute 37% more annual revenue to their primary bank than disengaged customers
  • Maintain more products with their bank -- from checking and savings accounts to mortgages and auto loans
  • Keep higher deposit balances in their accounts than less engaged customers with the same products

Financial services institutions are beginning to see the benefits of having a competitive social media strategy that meets the evolving needs of the customer and engages with a younger demographic on their chosen platform. They are also realizing that they can achieve sustainable growth and profitability by gaining insight into online customer preferences on social media through analytics that uncover user behavior and provide financial institutions with opportunities to deliver enticing, relevant offers online. Here are three recommendations for a successful social media strategy:

1. As Always, Focus on User Experience

In one of my recent blogs, we looked at the importance of user experience. The issues we discussed around web performance, mobile connectivity, web security, and personalization - with the objective of keeping the online user at the center of the strategy, also apply to an effective social media strategy. Financial institutions should create an integrated customer experience across all channels, including social sites. In creating a great social media user experience, consistency is the watch word. A few suggestions to be mindful of:

  • Don't create too many web accounts, this will only cause confusion with your customers
  • Ensure that you are not linking out to inactive channels - it is better to omit social links than include them if the online channels aren't being monitored in real-time.

Customers are ultimately the ones that decide how a channel is used, and they will often turn to social media for their customer service needs. A great example of customer services through social is National Australia Bank (NAB). NAB has built an entire social ecosystem focused on providing customer service. They have social customer service channels with customer service agents on Facebook, Google+ and Twitter.

2. Encourage Engagement

Successful social relies on engagement; it can't only be about broadcasting messages to your customers. There are many ways to encourage online engagement and it all starts with listening -- really hearing people and responding. Start by creating and joining groups and discussions, holding Q&A sessions with thought leaders in the organization, hosting social media contests, conducting polls and surveys, joining Twitter chats, but most importantly -- commit to being a part of the conversation, post frequently and consistently. A great example of driving engagement through social media is Fidor Bank. Fidor is a 100% online bank with a vision to be the European leader for online and mobile "community banking".  Social has been deeply embedded in Fidor's business model, using social interactions to build new products, share information, market the bank, and support peer-to-peer lending. Fidor uses social media platforms for product development discussions and when making pricing decisions. They collaborate with customers through online communities and encourage customers to help other customers by writing their own helpful responses on the sites. They make it easy for people to engage and share other content and comments, and offer incentives for contributing.

3. Measure, Review, Revise

Measurement is extremely important - set targets and be patient. Watch for trends, continue to experiment with different social media tactics, and re-evaluate your web strategy periodically. You will be able to make decisions about which social media channels are bringing in the most revenue for you, and quickly see what specific changes impact your social media goals. Above all, listen carefully. Social media can become part of the intelligence of your financial institution when insights are delivered in a usable way. Your customers will let you know when you've succeeded and where you can improve your efforts. Remember, negative engagement still counts. A recent report by market research firm Harris Interactive discovered that when companies responded to customers who had posted negative remarks via social media, 18% went on to become loyal customers, 34% removed the negative comment and 33% subsequently posted a positive comment.

With a strategy centered on the customer, you are sure to realize real benefits. Listening and responding to online customers in real-time will go a long way toward building trust, improving brand reputation and creating loyal customers. When social customers become loyal customers, they will use social media to share their great experiences - and there's nothing better than reading about happy customers!