A recent American Banker article discussed opening up the opportunities for employees to engage with customers. I was surprised that this was the position of the article because financial institutions, in general, tend to be very risk adverse. I understand utilizing social media to communicate with customers, but I think there need to be some controls. With that said, I give you my 7 deadly sins of social media for banks.
Lusting for “Likes” without the Bank’s Strategy
Before opening communication on social media for bank employees and customers, it’s important to recognize the need for a social media strategy and why social media matters. Profitability is a major concern in this competitive market, and social media can help financial service institutions differentiate themselves and communicate with customers on a level they’re accustomed to. For a bank to allow employees and customers to interact via social media, there needs to be a clear strategy and metrics to determine whether or not it’s having an impact on deposit accounts, loan applications, improving customer service, and generating revenues.
Failing to Acknowledge Competition (Pride)
With all the potential mergers and acquisitions banks go through, the market has become increasingly competitive. Not looking into the competitive landscape of how to effectively use social media can lead to disaster. There are a few financial services institutions (Wells Fargo, Bank of America, and US Bank) that banks can take a note from on how to implement social media best practices and still remain compliant. Leverage the learning from local credit unions to connect with the local markets is a good place to start.
Not Preparing for the Rage of Employees & Customers
Starting with More than Banks can Handle (Gluttony)
With all the social media networks out there, which one makes sense for the business? Opening up every social media platform to employees and customers is simply not a good idea. I would highly recommend that you start with one platform at a time and prioritize which social media platforms make sense based on your strategy. Each social media platform has unique aspects and as an industry that is generally slow to implement change getting a handle on each platform and understanding how customers engage will be critically important, so don’t bite off more than you can chew at one time!
Excessive Promotion of Your Bank and Financial Services
Contrary to popular belief your social media accounts should promote more than your bank, credit union, wealth management, and products or services. I would recommend the social media rule of thirds. ne-third of the social media content should promote the bank, one-third should share industry information and one-third should be based upon interactions and socializing with customers or potential customers. If you’re not following the rule of thirds or something similar you’re simply being greedy and tantalizing your community which will end with customers disengaging.
Being Lazy on the Measurement
The real question is how do you plan to measure the effectiveness that social media is having on growing deposit accounts, loan applications, and improving customer service? For years, I’ve witnessed banks and credit unions being really lazy on measuring the return on investment for their marketing dollars, especially dollars spent on social media marketing! There is a cost associated with having employees engage in this process and there should be a return on that investment. For full visibility into the return on investment, banks need to implement web analytics solutions and track across mobile banking apps, loan or member application process, and customer support tickets. Without doing so, there will be limited visibility into the overall impact that social media is having on the deposit accounts and lending.
Envy of the Competitor’s Social Community without Context
So the competitor has 1 billion likes and a trillion followers but how many members of their social media community interact with the brand, share information, use the specific social network, and are advocates for the company or product/service offerings? Don’t be jealous of the number of metrics without understanding the context of how they were acquired or the level of interaction. You can purchase Twitter followers but are they real followers? For example, you can have 300 followers for with a 50% interaction rate or you can have 1000 with just a 10% interaction rate.
It’s important to the financial service industry to embrace the idea that social media to communicate with customers, members, or investors but it should be aligned with the strategy and add value to the potential customers as well as the organization. The social media strategy and value of social media must be clearly established prior to opening social media communications. The expectations should be clearly defined for customers and employees to put things into perspective and avoid the 7 deadly sins of social media for financial services organizations.