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Please find below a Q&A session with Christophe Langlois on his vision of social media in the financial services industry. Christophe regularly shares his thoughts on the Visible-Banking.com blog.
Social media: time to take the plunge?
Social media evangelist Christophe Langlois’s new book is a must- haveis a must have for anybody wanting to dip their toes into social media or who has already taken the plunge. He shared some of its insights with you.
Q: There’s a lot of debate about social media’s relevance to banks. What’s in it for them?
Blogs, YouTube, Twitter and Facebook have quickly became essential tools to manage reputation, foster innovation, develop new products, strengthen customer relationships and satisfaction, drive customer advocacy, aid recruitment, and increase market share.
Social media gives you a unique opportunity to connect with your markets, be perceived as more genuine and authentic, win back angry customers and turn them into brand champions. It has the potential to impact virtually every single department of the bank: from HR, to corporate branding, product development, corporate social responsibility (CSR), all the way to marketing and customer support.
More and more financial institutions are also realising that leveraging social media is a great way, perhaps the best way, to engage with students and young professionals and reach the attractive Generation Y market – not just as a banking strategy, but as an HR strategy.
But it would be a mistake to stop there. Social media is not just a great way to connect with the gen Y, the youth market or even the mass market. Sooner or later, the wealth management industry will have to engage with a more and more knowledgeable and demanding market, in a more transparent way.
n a world where so much information is available in real-time, the very role of the advisors, brokers and other investment managers will be challenged. And their value will be questioned.
In the very near future, embracing social media is going to be equally important, if not even more critical, in B2B (commercial and corporate banking), B2B2C (intermerdiaries: independent financial advisors / brokers / insurance agents) and wealth management (mass affluents).
Q: A lot of financial institutions think social media is too risky. Why?
As I have said before – I firmly believe that the real risk is NOT using social media!
The more cautious financial institutions tend to view user generated content as uncontrollable and a major risk to their reputations. An alternative view is that banks have a unique opportunity to identify negative comments in real time and respond quickly. It is this ability to listen and reach out on social media that enables companies to retain disappointed customers and turn them into true champions of the brand and in turn improve their products or processes.
The most engaging and successful brands worldwide have shifted their strategy towards contribution from their market. They understand that people want to communicate and express themselves outside of the previously almighty corporate site.
Q: What about all the negative comments that are posted on financial services sites?
You can’t control what people are saying on their own social media assets or social networks –, you can only be aware of those conversations and you have the option to respond… but it won’t make those negative and sometimes abusive or fake comments vanish. What you can do is make sure conversations on your own social media assets like Facebook, Twitter, blogsging, youTube and Flickr are relevant – and that you own your name on these assets.
Publishing a simple set of user guidelines is a first step – it may not get rid of all the negative comments, but you can take offline the comments which are abusive or off- topic. (There are lots of social media user policies relating to governance and so on available online – my book lists the ones that other financial institutions are already publishing). You need to establish the right frequency of monitoring, too – you may need to monitor a Facebook wall three or four times a day, for example.
A good example of dealing with negative comments is Crédit Agricole Pyrénées Gascogne. This regional French bank is one of the most creative banks in social media I know, under the leadership of its truly visionary CEO, Jean Philippe. On its home page, the bank invites customers to express themselves, and 90% of the comments are negative. Is Jean worried? Not at all, because they make sure they answer every single unsatisfied customer. So far, they’ve successfully turned all of them into raving fans!
Q: Can you give us some other examples of how social media has been used innovatively and successfully by financial services companies?
In my view American Express is a serious contender to the title of ‘King of social media in financial services’. Last November it launched a great B2B and B2C campaign ‘Small Business Saturday’, supported by NYC’s Mayor Michael R. Bloomberg himself. That aimed to promote awareness of the economic benefits of shopping locally at small stores in the US. It launched a dedicated website with a clear call to action: ‘join the movement on Facebook’ and also used Twitter and blogging, giving away $100-worth of Facebook advertising to the first 10,000 small business owners who signed up to participate and promising to give $25 statement credit to card holders when they shopped at one of them on 27 November. It had tremendous press and blog coverage: on 27 November 2010 a search for “Small Business Saturday” on Google returned an impressive 1,750,000 results!
Wells Fargo are the rock stars of blogging: they set up a Wells Ffargo /Wachovia blog to cover the extremely sensitive merger of the the two banks and used it to engage in open conversations with worried employees, clients and analysts.
Spanish financial institutions have quickly understood the importance and value of social media, especially the cajas: Spanish cajas are legally obliged to take part in social activities and charitable work and most of them . In the last couple of years, the small Spanish savings bank Caja Navarra has used social media to better engage with its customers and get their feedback on the community projects it is sponsoring.
And in Denmark Danske Bank’s Idebank on Facebook is a great example of how to use crowdsourcing to demonstrate a willingness to listen. Idea Bank invites input and ideas for improvements and/or new products and services from anyone who may have something to say. Danske has used the site to improve its mobile banking solution based on customer feedback. The last stats I saw showed 9,950 monthly active users; 2000 votes; 169 ideas and 128 comments! Iideally, you go on to create a community of contributors and find a good way to engage with them on an ongoing basis.
These are just a few of the initiatives I have monitored over time. There are lots more in my book and on my website, Visible-Banking.com.
Q: What’s the best way to get started with social media?
There are three catalysts for social media adoption in the heavily regulated financial services industry:
* a crisis lead by vocal online influencers and User-Generated Content (UGC),
* or a successful marketing campaign launched by one of your direct competitors or one of your most innovative peers,
* but the best way to get started is to have an in-house social media champion. It doesn’t matter who they are – they might be a CEO or in HR or marketing – but executive sponsorship is vital.
Even the largest financial institutions don’t necessarily need a big team. They simply need to understand where the opportunity is, find out about the best and worst practices in the industry, start listening to online conversations, define a content and response/outreach strategy, focus on identifying their key influencers and followers/fans are (what I call KYF – “Know Your Followers/Fans”) – and reward them appropriately.
You could even organise a contest to recruit a social media champion. When the Breeze team at Standard Chartered in Singapore wanted to hire an intern to help promote the bank’s new iPhone mobile banking application via social media they launched “The World’s Coolest Intern” competition using social media and received, 1,190 applications from 65 countries in eight weeks!
Q: Where do you see social media achieving success in future?
For a number of years, personal finance / financial planning has been one of the hottest areas for banks and social media – there are a significant number of recent start-ups – just look at the success of Smarty Pig –and the growing number of traditional banks integrating personal finance into online banking. We all want to get our customers to use the web and to see internet banking as an efficient way to check accounts or pay bills and purchase most of their financial products, but the truth is banks are struggling with online sales...There’s potential for online personal financial management tools to open up dialogue with the customer and accelerate adoption and usage of online banking.
Most financial institutions are concerned with negative feedback, hence they are not too interested in capturing comments and reviews from their customers. But you need to realize that your customers have access to multiple ways to express themselves these days. Something which they will do - they will be vocal.
You need to ask yourself a few questions:
* wouldn't you like to be aware of negative comments on your own turf in a close and secure environment instead of finding out, like Bank of America, that a video posted by an angry customer had been viewed hundreds of thousands of times on youtube?
* Wouldn’t you prefer to be perceived as a company which listens and cares?
* Ideally, wouldn't it be nice to let your customers do the talking and promote your products and services, especially the most profitable and popular ones such as online banking or eStatements which have an immense impact on your business?
Being customer centric is part of your strategy? So put your money where your mouth is! Start with the basics, proactively reach out to your clients and urge them to share their feedback and their suggestions. Companies like American Express, USAA or GEICO use customer reviews to improve their products and services, fine tune their marketing message, increase customer retention and loyalty and drive customer acquisition.
Insurance companies that could leverage social networking to retain the loyalty of customers who they only actively engage with once a year. One company I know got its customers to evaluate their renewal experience by giving it a star rating. It discovered that the people who rated it with two stars or less were highly likely to switch. So it got its call centre to contact those unsatisfied customers within a few days and by doing so drastically cut the number of switchers.
Q: A lot of financial institutions have tried to launch social media campaigns and have then dropped them. Why do you think this is?
Too many financial institutions have concluded that social media doesn’t work because one or two of their social media initiatives didn’t enjoy success, mainly based on the number of followers on Twitter or fans on Facebook. First of all, it is not just about volume but the quality of the audiences and how active and engaged they are. Secondly, you must ask yourself how much exposure you have for your initiatives. Don’t expect thousands of Facebook users to join your page if they are not even aware of its existence. Very few financial institutions do the basics well and promote their social media presence on their own website.