Social networks

Virtual power in your hands

Online platforms like Twitter and Facebook are giving the financial services industry a new distributive power – and the chance at last to cease being “faceless” to their customers. RICHARD WHITE, Senior Marketer at Lloyds Bank Corporate Markets, reports.

One thing is for certain – social media is here to stay. The rest is up for grabs. And that includes exactly what strategies financial services brands adopt to meet their own needs – and, more importantly, the needs of their customers.

Although it’s no longer a new phenomenon, social media continues to develop at a rate of knots with the result that issues surrounding its use, such as regulation and best practice, are still under debate.

For the majority of leading brands in the UK, social media is now at the heart of their respective marketing campaigns. Manchester United, for example, is a regular user of Facebook, rather than just utilising its website to communicate with fans.

Meanwhile, the speed at which social media has been embraced by the public is staggering, with an estimated 25 per cent of time online being spent on social networks

Facebook is the largest network with nearly 30 million users in the UK, followed by Twitter with seven million users. Other networks growing rapidly the professional community, with five million UK users.

Furthermore, a recent study from the Office for National Statistics on Internet use in the UK reveals that 57 per cent of the adult population were using social media between 2010 and 2011.

Taking advantage of a social revolution

Social media can be galvanised by businesses in many different ways, from enhancing customer service and influencing brand perception to sales promotions and even for recruitment purposes.

For marketing professionals, it offers a fundamental change in approach from traditional “push marketing”, where content is sent to customers, to “pull marketing”, where customers look for the information they need at their convenience.

The idea rests on the premise that customers are more likely to believe in information they source themselves rather than the messaging marketers reel off.

The power of social media also means that customers have more influence than ever before. For example, a complaint used to mean a one-to-one interaction, but now complaints can reach a worldwide audience, which places more onus than ever on customer service and product performance living up to expectations.

In addition, social media allows emerging brands to challenge the established ones when it comes to making an impact. For established brands, of course, social media helps maintain a presence and engage more closely with customers.

Don’t miss out on the opportunities

The financial services industry is not slow at embracing new technology, but take-up of the opportunities social media presents is still under review. One explanation for this may be regulatory restriction.

A recent study carried out by Hotwire, a communications agency, shows that 43 per cent of people buy financial services as a result of social media recommendations.

If there was ever a time for the financial services industry to engage with its customers it’s now, and social media is one of the best ways to do this effectively.

Customers are already debating the pros and cons of the financial services industry through social media, so it’s an ideal opportunity for financial services brands to monitor the conversations and to participate in them, if possible.

However, an IBM/Mori study released earlier this year reveals a disconnect between how businesses and customers see social media.

Businesses see it as a mechanism for customers to learn about new products and service levels, while customers see it as a tool to identify discounts and make purchases – which presents a unique challenge for the financial services industry in particular.

To sell or not to sell – that’s the question

The most pertinent question for the financial services industry is how to best utilise social media to improve the bottom line. But the industry needs to earn the right to talk about its products by firstly engaging with customers and building relationships.

The minimum objective for a financial services marketer should be to listen and engage. More importantly, however, is to act on feedback, refining strategies and answering customer service queries.

The key is to have a social media strategy in place. Rather than jumping in and building a Facebook page or LinkedIn group, assess what the social media opportunity is and work out how social media can be used to engage more actively with customers to give them something they cannot get through other mechanisms.

Matt Rhodes, a social media consultant at digital marketing agency e-consultancy, offers the following advice:

• Listen – understand what is being said by customers and use that insight to develop strategies that address issues or take advantage of opportunities.
• Engage on a topic of common interest – this is probably the most common strategy and centres on providing useful information or insight to customers around a topic of mutual interest.
• Engage on products and expertise – start to talk about specific products or expertise actively. Morgan Stanley has empowered its brokers in the US to use Twitter and LinkedIn to actively engage with customers bydistributing research and content, such as status updates, but only when approved in advance by the firm, such as official company views on market outlook.
• Do nothing – many financial services brands have chosen this option for now.

Make sure you measure depth of engagement

All too often social media can turn into a numbers game; for example, how many followers have been gathered? It’s important, however, to concentrate not just on numbers but also on the level of engagement from the audience.

By measuring “likes”, “comments”, “mentions” and “sharing”, marketers can work out how customers actually value a firm’s presence and whether they are doing something active as a result of it.

The big challenge for marketers is to harness social media to complete the circle of customer engagement and action.

Many leading brands such as the BBC are starting to reuse social media dialogue actively within their website to demonstrate this and make it an attractive proposition for returning. What better way to really engage with an audience than live streaming of social media into a firm’s website?

What lies ahead?

Social media is an industry where creativity and innovation are at the forefront and many businesses are expanding and building their capability to address this new market.

Some experts are even pointing towards a relationship between share prices and brand sentiment. Studies are underway to examine the link between the volume of social media activity around a brand and the resultant change in the organisation’s share price. We need to wait for more conclusive results to see if the power of social media really does influence trading.

Long-term, how the financial services industry uses social media to take advantage of all the opportunities it offers will be interesting to witness.

RICHARD WHITE is a Senior Marketer, Lloyds Bank Corporate Markets.

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