Using Social Media for Financial Services Marketing

As I travel across the country, more and more banks are dipping their toes in the waters of social media. While the banking industry has been slower than most industries to embrace social networking, the tremendous growth in social networks, the need to better monitor and participate in social network conversations that are taking place, and the value of reaching customers and prospects on popular social networking sites has banks using Twitter, YouTube Facebook and other sites. This almost instantaneous communication comes with new challenges for banks, however, including informality of communication, higher customer service expectations and another venue for customers to voice discontent.

Nate Elliott from Forrester Research has decided to research and write a report on how financial services marketers can most effectively use social media. He is hoping to include data on how different types of financial customers engage with social media and is also hoping to collect more insight from the bank marketers' perspective.

He is looking for financial services marketers willing to walk him through examples of how you've used social media, talk to him about how you manage risk and work with your legal and compliance departments, and share with him some of the lessons you've learned in social media marketing. He can be reached at nelliott@forrester.com.

Building Long-Term Deposits and Relationships Automatically

Over the past several years there have been a number of financial institutions that have built automatic savings programs where customers can set goals, establish recurring transfers between accounts to fund the goal(s), and track their savings progress.

One of the first programs developed was the Orange Savings Account from ING Direct which greatly simplified the process of opening new accounts for various savings goals. Following the success of the Orange Saving Account, SmartyPig was another program with that same goal in mind, making it easy for a customer to setup savings goals.

A customer can name their accounts, set the deadline for reaching their goals and even use an interactive calculator to determine the amount they will need to set aside each month. What makes Smartypig unique is that they added a social element to the mix . . . allowing other people such as friends and family members to contribute to the customer's goals as well.

The customer can even place a widget on their Facebook or MySpace page. Once the customer reaches their goal, they can either put all of your savings plus interest on a debit card, have it sent back to their bank, or receive bonuses by having the amount placed on a gift card from participating merchants like Macys, Amazon, Best Buy, etc.

While SmartyPig brings unique technology to its enterprise, it remains a one trick piggy (offering only savings accounts) and is a still-small Internet start-up. Being able to grow a savings account product from $0 to $500 million in deposits in less than two years is a phenomenal feat but its success can be assailed.

Full-service banks have begun to copy some of SmartyPig’s basic features and leveraged their own new savings features. For instance, U.S. Bank introduced the S.T.A.R.T. (“Savings Today And Rewards Tomorrow”) program in late 2009 in test markets, giving a $50 Visa gift card to a customer depositing $1,000 or more into a U.S. Bancorp money market savings account and establishing a monthly transfer from their U.S. Bank checking account. If a customer chooses to transfer between $.25 and $5.00 from their checking account into his money market savings account each time he uses his U.S. Bank debit or credit card, the S.T.A.R.T program counts those toward program term fulfillment.

In addition, customers maintaining a minimum $1,000 balance in the new savings account for 12 months will receive another $50 bonus, while U.S. Bank is offering another $100 bonus for establishing an automatically funding savings account tied to the bank’s standard checking account.

Building new products that encourage a long-term savings perspective supports the current trends toward more conservative money management while providing tremendous opportunity for additional cross-selling and relationship building. I fully expect more banks to develop both online and offline savings alternatives and to use these products as part of their onboarding and lifestage communication processes.

Banks Need to Build Foundation for Effective Multichannel Marketing

While the BAI Retail Delivery Conference in Las Vegas doesn't officially begin until today, hundreds of attendees participated in a series of pre-conference workshops, including a session entitled, "Improving Acquisition, Onboarding and Cross-Sell Effectiveness with Multichannel Communication" which I was lucky enough to present with Matt Wilcox from Zions Bank and Tal Harry from Richter7. The workshop was attended by representatives from banks of all sizes and in various stages of multichannel marketing development.

During the session, we had several formal and informal surveys to determine where this limited cross section of the banking industry was with regard to their marketing mix.

Interestingly, while the majority of the banks are regularly using web banners and email as part of their marketing initiatives, less than 25% use paid search or jump pages with their campaigns. Even more surprising:

• Almost half of the banks in attendance still do not have a formal, multi-step onboarding program. This is surprising given the amount of attention given this strategy in the trade press and with market leaders over the past several years.
• While only about half the participating banks routinely collect email addresses, more than two thirds collect mobile phone numbers. This is most likely a result of IT challenges in setting up capture methods for email vs. another phone number box. The current level of email address pollination within the databases for the banks in attendance was still less than 30% on average.
• Only a very small handful of banks in attendance ask a new customer what their preferred channel of communication is. This is both a potential missed sales channel opportunity and a customer experience shortfall.
• Almost half of those at our session have used web video as a communications tool, about the same number are using Facebook, while less than 25% have used Twitter or YouTube.

An overarching takeaway was that, while most of the banks in attendance are doing dual channel marketing, few are integrating multiple channels for improved marketing effectiveness. With budgets either staying the same or being reduced in 2011, it will be more important than ever to optimize marketing channel investments through the testing of new media and even social channels. At the same time, banks will need to focus on the basics (such as the capture of email addresses and determining customer's commnication channel preferences) while setting the foundation for improved measurement of channel effectiveness.

Thanks to all of the banks that attended our session yesterday and especially to Matt and Tal for their exceptional insights that they shared with in the workshop.

Brand Advocates Should Be Cultivated

Every bank talks about customer loyalty and advocacy, but many find it difficult to define what a brand advocate is, or what the value may be to their bank.

According to a study just released on the actions, motivations and influence of brand advocates conducted by Dr. Kathleen Ferris-Costa at the University of Rhode Island for social networking leader BzzAgent, brand advocates are 83% more likely to share information about a product than typical web users and 50% more likely to influence a purchase. Since they enjoy solving problems and helping other to make purchases and decisions, they are also 75% more likely to share a great experience and three times more likely to share their opinion with someone they don't know (they are also more likely to share a bad experience). In other words, this segment of your customer base acts and thinks very differently from your typical customer and should be searched out and cultivated.

According to the study, brand advocates thrive on social networks and in all types of social media communities. When researching products, they turn to social networks first and fully understand how to leverage the web for insight. When sharing product information, they recognize the power of social media to spread their messages to a wide audience. In fact, brand advocates write more than twice as many communications about brands as the average Web user. As for content curation, brand advocates forward between two and three times more of other people’s online communications about brands. Bottom line, they are not shy and they want to be recognized as a good source for advice.

To better understand the dynamics of the brand advocate, BzzAgent developed a Field Guild to Brand Advocates to illustrate the findings from their study as well as the infographic shown below.

Finally, brand advocates also want to be good stewards of the brands they promote and want to be recognized by the brand for their efforts. So how can a bank find advocates and promote their efforts as part of the overarching marketing communication strategy? You need to find them where they discuss your brand - on Twitter, Facebook, discussion boards or even personal blogs.

In an interview for this blog of Jeff Stephens, CEO of Creative Brand Communications, most banks think they already have “good word of mouth” or advocacy when, in reality, what they have is reactive word of mouth which really isn't advocacy. The real goal, according to Stephens, is to create and encourage proactive word of mouth. "With proactive WOM, a customer would eagerly approach another person on their own and say 'have you heard of Acme Bank? You have to check them out!' With proactive WOM, there's no prompting required for the referral."

The key thing to remember is that while Word of Mouth Marketing (WOMM) is related to and can integrate with traditional marketing, the thought process required to develop WOMM strategies has some key differences. According to Stephens, with traditional marketing, the question is “what can we say to the target market to get them to pay attention?” In WOMM, the question is, “what can we give people, that they will find so interesting, they can't possibly keep it to themselves?”

Not only should you provide good products for the advocate to share, but for those who utilize the web for positive word of mouth, you need to provide strong content which is of interest, special offers for 'friends' and 'followers', exclusive videos and items of interest that are easy to find and share. Find a way to reward those who spread the word (focus on quality as opposed to quantity) and measure your results. Using an online referral program can assist in this process. As Jeff Stephens says, "The key to a successful WOMM strategy lies in a simple principle: if you want people to talk about you, you have to be worth talking about".

Most importantly, it is imperative to look at your WOMM and advocacy efforts as an ongoing commitment as opposed to a program or campaign remembering that advocacy is difficult to achieve, but very easy to lose if not cultivated and nurtured.

Banks Need to Collect More Insights to Communicate Effectively

By Bob Williams, Director of Marketing Technologies at Harland Clarke and author of the blog, The Merchant Stand.

A friend and colleague Jim Marous shared an article from American Banker on Googe+ entitled Banks Underuse Mobile for Communication. The article discusses challenges that financial institutions have with communicating with their customers through mobile devices. While mobile device applications and mobile optimized sites are becoming more common, and expected by account holders, financial institutions are not using the mobile channel for proactive communication. Kael Kelly, senior director at Varolii is quoted in the article “Banks don’t have the data that they need. A lot of the phone number data doesn’t easily distinguish between a mobile number and a land-line.”

So the idea that banks don’t know what data they have made me think about some other data that Jim Marous shared about financial institutions and customer data. Like this tweet about banks not having email addresses for their account holders.

The challenge I see is missing or unintelligible customer profile data. That problem expands beyond the boundary of the financial services industry. It’s really a common need for any type of business. Another challenge is the misuse (or lack of use) of the data that an organization has. Another conversation with Jim last week revealed that he noticed his bank mention that online banking was 'down' using Twitter. While admirable that they used a more modern social media tool for this notification, there probably aren't many people following Twitter the way Jim does. Making matters worse, they didn't use either his email address (which is tied to his online banking account) or SMS (the bank has his cell phone) to make this notification. In other words, the bank had the tools, but didn't use what was at their disposal.

There’s no doubt that many organizations have a good process to manage customer profile data and communication. But for those that don’t, I believe there is a fairly simple solution.

A Simple Multi-Solution for Collecting Profile Data
The first step is to collect accurate information at the time of new account opening. That seems obvious, but for many businesses this may require updating the customer/client profile record to support addresses for current communication mediums. That means distinguishing between phone number types such as home, mobile, work etc. It means a place for an email address as well. If is it a business, you may also want to include a variable field for social media type contact information. At a minimum, require one phone number and one email address. If the customer insists they do not have an email address, then fill the field with an agreed upon standard such as (noemail@yourbusinessdomain.com)

I understand there are regulations governing anti-spam communications via email and SMS text. But I don’t think banks or other businesses need to over think/engineer a basic solution to keep accurate profile data.  The email and phone number should be required and make sure the customer knows when they establish the account that you may use this information to contact them with important notices about their account. You can optionally create a permission indicator (opt-in) that is designated for future marketing or non-marketing communications. While these changes may require IT, online banking and branch management support, the customer experience and cost benefits are significant.

A Simple Multi-Channel Solution for Keeping Profile Data Accurate
I suggest sending notifications through multiple channels annually for customers to check and update their profile contact information. Here are some possible touch points:

1. Pop up in the online account area after login.  Remember, customers are in your system by their own choice. So this is a fair message to display to them regularly. This is also an area where the customer can self-serve any updates they need to make.
2. Email reminder. Don’t ask the customer to login from the email message or reply to it. That’s a technique used by phishing attacks and creates mistrust. Rather, use the email to notify and request the customer update their profile information the next time they login to their online account or the next time they visit a branch/store location.
3. Post the reminder message on Facebook/Google+/Twitter and other social sites where customers may follow your brand for the purpose of receiving communication. These social medium platforms are broadcast platforms. You don’t need permission to place messages there and customers that see a message from your account page are there by their own choice.
4. Leverage the ATM. While some ATMs are equipped with interactive communication options, the ATM can at least be used as a reminder tool. Of maybe use a QR code on the ATM for customers to go to a log-in site for updating.
5. Put the reminder message in a recording for customers holding for live assistance. It’s a simple reminder that they should keep their profile information up-to-date to help with important account notifications.
6. Have any branch/store employees verify with customers on a designated week (quarterly or annually) that their information is up-to-date information. This only covers the customers that are serviced in-person for that week, but it’s a great touch point for interaction and shows that your brand is proactive to keep good records. Branch POS material can also emphasize the need for updated information.
7. Messaging on all statementing and promotional materials. Emphasizing the 'green' aspects of keeping all communication channels up to date makes this a priority all year long.

Since some customers may have fees associated with SMS texting, it’s not advisable to use that channel unless you have established that as part of their profile setup.

The email channel is different in this multi-channel approach because it is a message to an individual area. In fact, email addresses that are not accurate may return as undeliverable. Consider monitoring undeliverable emails and putting these customers on a list for follow-up through other means such as phone or postal mail.  Alternatively, remove email addresses from the profile record if they are not deliverable after three attempts.

What do you think? Should it be difficult to keep accurate profile data and request the customer update/verify it with recurring frequency? Do you have a process or program at your organization that has worked? I would love to know.

CommBank Introduces Kaching For Facebook and 'Signals' Insight Platform

Commonwealth Bank of Australia continues to be one of the bank innovation leaders, announcing two social-based platforms this week. 'Kaching for Facebook' is an extension of the already popular Kaching smartphone app covered in a previous Bank Marketing Strategy post, allowing customers to do basic transactions within the Facebook website. 

In addition, CommBank introduced the 'Signals' insight hub that collects transactional data to allow customers to view and share how their transaction patterns compare with others.

Kaching Comes to Facebook

CommBank Kaching for Facebook is a new app that will give Australia's 12 million Facebook users access to everyday banking and payments on their favorite social network. Based on the popular Kaching mobile payments app, the new app lets users pay back money owed or make cash gifts to friends of family for birthdays or weddings. The app also allows a customer to view transaction history within the Facebook website.

"With Facebook popularity skyrocketing to more than 55 percent of the population in Australia, we know our customers, particularly Facebook's core user base of 18-35 year olds, are looking for new ways to connect their banking and their lives, friends and causes within Facebook," states Commonwealth Bank's chief marketing and online officer, Andy Lark. "So what better way to respond than by giving them access to everyday banking and payments on their favorite social network?"

Accessed directly from the Commonwealth Bank Kaching Facebook page, the app is a scaled down version of a typical online banking app optimized for mobile using responsive design.

When customers sign up for the new Kaching app on the CommBank Facebook page, they will be able to view account balances and transaction history, transfer funds between accounts and view peer-to-peer payment and request history. In addition, the features of the new service will allow people to:

• Pay Facebook friends or anyone using an email address or Australian mobile number and Australian bank account;
• Request payments from friends;
• Gift payments to friends and family;
• Make payments directly to Facebook event pages.

While the initiative allows customers to transact on a commonly used platform, online banking manager at CommBank, Drew Unsworth, admits that people may not feel comfortable doing regular banking on Facebook. "When people first hear about it, they think all of their financial details will be on their Facebook wall, but that's not right," Unsworth says. 

To address the common concern of security and privacy, Commonwealth Bank will secure transactions using a combination of a 4-digit PIN code to log into the Facebook app in conjunction with a six-digit confirmation pin sent via SMS. The code is also used by the payee to receive the payment. 

Commonwealth Bank also has built Kaching for Facebook to help alleviate consumer concerns regarding privacy in the Facebook environment. "We designed CommBank Kaching for Facebook in a way that ensures Facebook does not have access to, or visibility over, anything our customers do within the application," Lark said. "Our customers have total control over which personal and transactional information they choose to send to friends, post on their walls or post on another person's wall."

In addition, the bank is offering a '100% security guarantee' that will cover customers for any losses that could occur due to unauthorized transactions.

Below is the video that describes the new Kaching for Facebook.

Facebook is the third platform to host the Kaching app, following the initial iPhone app introduced in 2011 and the Android version of the payments application released last year. Commonwealth Bank also expanded the functionality of the mobile and Facebook app, making it possible for customers from other banks to collect payments using Kaching.

To date, more than 6.5 million CommBank customers use online banking and more than 2.5 million customers accessed their accounts via mobile platforms.

Signals Leverages CommBank Data For Insights Platform

As opposed to keeping all of Commonwealth Bank's 'big data' private, the largest bank in Australia has decided to pool their extensive spending and savings data to launch a new consumer insight platform, Signals. Processing over 40% of the nation's transactions daily, CommBank will leverage the Signal content-rich data hub to publish megatrends monthly, supplemented by videos and infographics that will help consumers visualize the data. The first Signal infographic focuses on the costs of childcare.

Premier Signals Infographic on Childcare Costs

In addition to publishing megatrends monthly, Signals will also allow an individual to view how they compare to others in their demographic segment. Using a highly engaging and interactive personalized video tool, a person can compare how they spend, save, transact and borrow based on their gender, age and postal code within Australia. If desired, a consumer can share and compare their information across various social networks.

Below are some of the screenshots from the process (the output is actually a personalized video with voiceover). Each slide in the presentation provides a link to the appropriate area of the bank for assistance in saving, investing, borrowing, etc. A personalized infographic is also generated from the input and is available to share via social networks.

Personalized Insights Based On Age, Gender and Postal Code

Personalized Infographic Created By Signals Insight Platform

"CommBank has always had a deep passion about improving the financial knowledge of all Australians. The reality is, the more information you have, the more inclined you will be to make better informed financial decisions. Signals is a visual and interactive site providing customers with spending patterns across a broad range of topics," stated Commonwealth Bank's Lark.

Signals is similar to another compiled data sharing hub - PeopleLikeU - introduced last November by Australian bank competitor UBank (backed by NAB). While this site asks for more information than the Signals platform (gender, age, housing, income, family structure and location) which may inhibit consumer participation, CommBank will note that the database for comparison is smaller.

 

Related Posts

Kaching Users In New Era Of Mobile Banking - Bank Marketing Strategy ((October 2011)

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