A Financial Services Social Media Guide

Financial Service Institutions recognize they need to meet their prospects and customers in their preferred online and social channels if they are to engage, acquire, grow and retain those customers. However, the majority of FSIs also struggle to do this with a clear and profitable social business strategy.

Pretty much all financial services firms have social media properties but many have failed to make social business profitable business. More often than not the problem stems from a lack of a clear social strategy and a subsequent lack of financial performance measurement.

Making social business profitable starts with identifying the right use cases. Consider the following:

  • If you are a retail banker and your bank customer just watched 3 YouTube videos on the topic of setting up a 401K, or how to calculate the amount needed for retirement – do you want to know that?
  • If you are a financial advisor and your high net worth customer searched "90 day CDs" before coming to your website – do you want to know that?
  • If you sell mutual funds, and your customer just tweeted, "my Fidelity fund fell again, this is driving me crazy" – do you want to know that?
  • If you sell P&C insurance, and your customer just tweeted, "just bought a new house" (or a vacation home, or new car) – do you want to know that?
  • If you are a private banker and your high net worth client just left your website page offering jumbo mortgage refinancing and went directly to a competitor banks website page describing their jumbo mortgage refinancing options – do you want to know that?
  • I can go on with near limitless examples and scenarios, but there is no need to answer, as these are rhetorical questions.

The second step in making social business profitable business is to align the use cases with business objectives and enabling technologies. In this post I'll discuss how banking, insurance, wealth management and similar providers can identify clear objectives that are enabled with social technologies, such as social listening, social selling, social marketing, social service, social products, crowdsourcing and reputation management.


Social Listening

Consumers and businesses are discussing their needs for financial solutions just like yours on social networks. But you may not know the discussions are taking place.

Here's an example. Prospects encounter a blog post or social conversation in which one of your current customers is complaining that your online banking application doesn't deliver current information, or your self-service application doesn't include important content, or your mobile app has a technical glitch, or one of your branches is pathetically slow, or one of countless other challenges.

Worse, the customer reached out to your branch manager for support and was given the run around. Other participants react with disappointment and the discussion spreads. A few people post that they are using a rival bank that doesn't have these problems.

The fact is you were aware of the problem before this discussion began. You know the problem can be addressed but it's not been made a priority and since the complaints were not elevated by your branch, you're not aware of the customer frustration. You don't know the discussion is taking place online so you can't respond.

The result is you have lost potential customers you didn't know existed due to an online discussion you didn't know was occurring. Unfortunately, a competitor has been monitoring social networks, has gained important insight from this discussion and has acquired several sales leads. They may even use this information in a new marketing campaign.

Customer sentiment is being expressed for every financial services company, product and service in existence over multiple social channels at an increasing rate. Using social monitoring and text mining tools, there's a compelling opportunity to analyze what prospects and customers think about each of your products and services. You can also learn what they think about each of your competitors' products and services. You can even correlate this sentiment analysis to sales efforts, product mix, marketing spend, advertising expense, loyalty programs, competitor programs and specific cost and profit measures.

This type of online data and correlation is powerful in creating business processes which influence customer behaviors with predictive responses. Taking this a step further, there is also an opportunity to correlate customer sentiment with broad economic factors, specific market indicators, competitor moves or other factors that may uncover patterns that permit you to model changes for improved customer engagement and business performance. For example, offering low risk financial products during bleak times or to pessimistic customers will result in much higher sales conversions than less focused offerings.

It's become abundantly clear that FSIs which do not track customer sentiment are losing customers to competitors that do. FSIs that are adjusting their business models or product offerings to capitalize on customer sentiment score the biggest wins.


Social Selling

There's a saying that in sales, timing is everything. This mantra alludes to how financial services institutions can improve sales win rates by monitoring buying signals.

More than half of consumers considering financial products now begin their purchase evaluations online. They ask their social circles for recommendations. They consume unsolicited customer opinions of their FSIs. They read independent reviews and customer complaints. And they factor all of this into the decision of whether any particular FSI will make their short list. Financial services firms must recognize that their customers are talking with and about them far more on social networks than on any communication or support channel managed by the company.

Consider the staggering volume and upward trend of consumer to consumer social media conversations.

Every day there are over 500 million tweets and about half of them are related to companies, products and services. This figure grows exponentially when considering X (formerly Twitter) is but one social network of many. A very small but nonetheless material percentage of this social commenting is related to FSIs and their products. To acquire and retain consumers, you need to meet these customers in the social channels where they frequent.

The below tweet shows how quickly consumers are willing to respond to both friends and strangers with frank feedback and their personal experiences.

Financial Services Social Selling

Social selling is about applying the information available in social channels to aid your sales strategies and pursuits. This information includes prospect or consumer social comments of all types, including questions, frustrations, concerns and inquiries. These comments also tend to be both candid and desirous of a response.

But two important points need to be recognized.

First, sellers are not intruding on customers, as they are included in the public community that has been broadcast a message or asked a question.

Second, people creating posts don't want to be pitched or sold to. It's okay if you represent a company, but disclose that, be transparent and most of all be helpful. Your participation is normally welcome as long as you are contributing to the social conversation, and not attempting to hijack it for your own interests.

There are many social selling techniques, such as the following:

  • Social Searching. Consumers seek advice, referrals and online information for retirement plans, mutual funds, index funds, insurance products and a broad array of financial services solutions. Extending social listening with social searching can identify these customer opportunities. A good starting point is using X / Twitter's search and advanced search capabilities to find potential prospects and engage them. Similar to setting up social listening keywords, it will take some time, analysis, experimentation and continuous refinement to separate the signals from the noise and identify the search terms that yield productive results.
  • Social Prospecting. There are an increasing number of online software tools that leverage your connections and social spheres to create highly segmented prospect lists. LinkedIn offers one of the more utilized tools, Sales Navigator, to seek out prospects and create target lists using largely demographic search criteria. Using your networks personal connections on LinkedIn can then turn a cold outreach into a warm transfer. According to LinkedIn, a warm referral increases the probability of making the initial connection by 2 to 4X. A study from FTI Consulting found that 75 percent of financial advisors use social networks for business and 62 percent report that they have won new business using LinkedIn. Similar tools from software vendors such as Clintelica and Reachable create enterprise business graphs which include additional social networks.
  • Triggering Events. Identifying the activities or events that precede a buying opportunity can put you in front of the buyer at the beginning of their purchase cycle. Life events such as buying a house, getting married, having a child or a child approaching driving age or college are known to spur several types of financial service needs. Procuring or subscribing to third party aggregate data to recognize these life events can enable savvy social sales professionals to be the first to position early with the buyer.

Buyers are publicly sharing their opinions about what they want and need, what they like and dislike, and what matters to them. Sales professionals that configure their financial services CRM software to harness and act on this information within the norms and etiquette of any particular social network can engage with these buyers before the buyers have engaged with competitors—thereby creating an early and coveted position where the sale may then be theirs to lose.


Social Marketing

A social business is simply a business that leverages social media for communication and collaboration. But even with such a simple description, becoming social is often quite hard and prone to error for many financial services firms.

For example, many firms view social media as just another communication channel to broadcast unfocused marketing messages to customers that find them annoying. Distributing unwanted content is spam, and pretty much the opposite of being social.

Remember, social media is about evolving from push-based monologue broadcasts to two way dialogues and conversations. If your social strategy is not designed to generate feedback, engagement and conversation, it's not going to work. For most FSIs, becoming social is a cultural shift to engage customers in an open, transparent and public environment.

Social Campaigns

Social marketing campaigns tend to be less about selling financial services products and more about selling the brand and growing customer relationships. Goals for these campaigns start by personalizing or humanizing the brand so that consumers engage and relationships evolve. Social media is not the place to post your four color glossy brochure but instead to publish behind the scenes casual moments, real life customer encounters or just things that real people relate to.

The best social campaigns facilitate user generated content, thereby, getting customers to create and distribute the message. When consumers post pictures of themselves in your bank, hashtag your financial product or call out a teller in your organization, they are delivering the single best form of advertising – word of mouth – that money can't buy. But unlike physical word of mouth promotion, this digital advocacy scales across social spheres, geographies and time zones and has a much greater durability than spoken words.

Because consumers readily spread non-social content over social channels, social media can also be used to track the effectiveness, reach and engagement of traditional marketing campaigns. Measuring marketing and advertising reach via social posts, tweets, Likes, +1s and blog comments delivers a window to view how consumers engage and respond in real-time and over time. This immediate measurement can be used to adjust campaigns based on live responses and while such course corrections may still impact performance results.

Friends do not approach friends to pitch products and this is why most product-oriented social marketing campaigns perform poorly. The typical social media spray and pray approach is a proven money loser. Standalone ads on social networks deliver disappointing results — generally achieving conversions of .05-1% as compared to 2-3% for search and 3.5-4.5% for email.

However, when social ads are targeted to known or anonymous visitors that have previously visited your website, deliver relevant offers as part of a broader nurture marketing campaign, and take a soft sell brand approach, the conversion rates increase exponentially.

A good example of this is the Facebook Exchange (FBX) Custom Audiences program which enables marketers to deliver contextual social ads to existing customers. Financial services firms can export customer lists from their CRM systems to the FBX so that FSI customers see their branding or offers in their social networks.

FSIs can also target anonymous visitors with social ads that reflect the financial services brand, products or services that were reviewed on the FSIs website. By capturing website visitor digital footprints using your marketing automation system or by placing a pixel on any given webpage the FSI can then use the FBX to link more relevant offers to the anonymous visitors' social network accounts.

The result is that the anonymous visitors will see your brand, or content related to the particular products they checked out on your website, in their news feed or right column ad display. This social marketing technique is not the same as search engine retargeting which is dependent upon search results pages and Google Ads.

When a customer goes to your website to check you out, but doesn't register or engage, each additional relevant display of your company and offer increases CTRs (click through rates) and the likelihood the customer will ultimately engage. I've used these techniques over many years and they have consistently acquired high value leads for a low cost per lead.

Influencer marketing is another social marketing technique.

Influencers, key opinion leaders (KOLs) and thought leaders are social by nature. Social marketing strategies which apply social media tools to identify influencers and then engage these opinion leaders for relationship building can achieve a multiplier effect in terms of audience reach and a credibility upshot from the influencers implied or expressed endorsements.

Based on good relationships and shared content, these influential people can comment on your message or extend your content through their high volume channels to dramatically increase reach.

Make no mistake, your customers are social and engaged in social networks. This trend shows no signs of abating. So if you wish to engage new prospects and existing customers, you will need to meet them where they communicate. Waiting for them to come to your communication channels is an open invitation for one of your more forward thinking competitors to engage your customers while you sit on the sidelines oblivious to the customer churn taking place around you.


Social Service

The accelerated adoption of social media created a digital divide whereby most consumers are social but most financial services institutions are not. The problem is exacerbated by FSIs that first adopt social media for marketing purposes. Sure, social marketing is a big business development opportunity for FSIs. But it's a mistake to gear your financial services business strategy toward methods that are cheap for the company but irrelevant for the customer.

So what do customers want? Social listening reveals that about 80 percent are looking for help and customer service.

The top three social service scenarios for financial services institutions include customer self-service over social channels, social feedback, and enterprise (aka internal) social networking.

Customer self-service is clearly preferred by a majority of Gen Y but it's much bigger than that. Many financial services consumers such as high net worth individuals prefer to solve their own problems or do their own initial research before engaging with an advisor.

Providing a self-service application with rich content, social ratings, knowledge-base and instant escalation to a financial advisor, customer service representative (CSR) or other employee gives customers what they want 24 by 7. Self-service also acts to deflect calls from the contact center, which when done right both decreases service costs and increases customer satisfaction.

Social feedback can be gathered with surveys, polls and forums to capture customer sentiment over social networks. The online channels may be company managed or third party sites such as consumer review websites. Contact centers can adopt social listening tools to identify and follow-up on social sentiment that needs attention or resolution.

For a more automated process, social listening tools can capture customer comments based on particular keywords and sentiment, create a ticket in the CRM application and route or assign the case to a CSR for follow-through. Automation can deliver a big time savings as only about 4 percent of comments posted to a brands Facebook or LinkedIn page need responses. Using social listening technology to identify, capture and route that 4 percent saves staff from continuously weeding through the other 96 percent and then copying and pasting data into tickets for resolution.

Enterprise social networks use internal social tools to facilitate collaboration around a case or customer situation. These tools enable staff to communicate, collaborate, swarm, perform cross-departmental business process automation and connect CSRs with the best information and experts in the organization.

CSRs and interested parties can subscribe to the select customers, cases or other information to which they want to be notified when updates occur. Information can be appended, tagged and searched. And since the information is shared and visible, all team members are on the same page and up to date with what's being communicated to the customer.

I've found this type of knowledge management facilitates new CSRs, or CSRs coming into new responsibilities particularly well. Internal social networks can also increase speed, or reduce case durations as any person subscribed to a feed can respond to a case, request or question in real-time. This also helps when you're not sure who to direct a question to as social groups offer topic based members and information.

The value of internal social networks being tightly integrated with CRM is not lost on the CRM software publishers. CRM applications with built-in internal social networks include Microsoft Dynamics CRM with its Teams integration, Oracle with its Social Relationship Management and Salesforce with Slack.

Some leading financial services firms are experimenting with peer to peer community support. When properly moderated, this type of social service has proven successful in terms of customer satisfaction and delivers valuable user generated content. However, the regulatory nature of financial services requires additional diligence making this social service technique something to be explored by firms with a mature social media strategy.


Social Products

FSIs who advance their customer relationships and business success with the prior social media strategies may want to consider making their financial products social. Is there a customer benefit if your products deliver performance reporting, progress updates, customer statements, administration messages, renewals or other messaging to your customers or their designees (i.e., their accountants, lawyers or financial advisors) in a social way or over a secure social network?

When helping a financial services client design a social strategy, I asked a group of executives, "why can't my 401K be my friend?" They kind of chuckled, so I asked again, "no really, why can't my 401K, checking account, investment account or other financial product be my friend?" I'm describing a concept similar to getting posts and updates from a Facebook friend.

Why can't these financial services products deliver private and secure alerts on a social network when they incur gains or losses, when they release or reinvest a dividend, when they are awaiting a decision from me or when other things happen which I indicate I'd like to know about. Why can't my accountant or my tax attorney subscribe to my social page so I can indicate which of these notifications I also want them to be alerted?

Do you think consumers prefer to go to financial services company web sites to see their product information and updates? They don't. They would rather their information be delivered to their social networks, with security, so they get the information in real-time, and don't have yet another place to go.

This type of creating thinking, and in this case enhancing financial products to become social financial products has led to increased customer engagement, more frequent reinvestment transactions, increased customer share and lower customer churn. As important, it has created new found differentiation that matters to consumers and is aiding marketing campaigns and new customer acquisitions.

Crowdsourcing By Financial Service Institutions

As product commoditization accelerates, financial services companies are under pressure to deliver innovative and differentiated financial products and services that are embraced by customers.

A social technique that builds upon social products is crowdsourcing. Sometimes grouped with ideation or idea management, this social media strategy involves engaging public and private online communities to discuss, assess and vote on ideas to create or improve products and services.

Crowd sourcing supplements market research. It tests concepts, product prototypes, product trials and new product launches. The volume and diversity of virtual participants' permits product manipulation and modeling (i.e., bundling, fee structures, pricing elasticity, related services) and flexible customer segmentation analysis.

Using crowdsourcing to supplement market research for new financial products and services is a proven method to increase market acceptance and customer adoption.

An example is Barclays use of crowdsourcing to design the terms and benefits for its Barclay Card Ring MasterCard and based on that success, its subsequent creation of the crowdsourced site called Your Bank. The later innovation is used to continuously acquire new ideas for products and services.

Aly Bank found crowdsourcing support for a virtual bank. Based on customer feedback and an advertising slogan that promoted "no branches" it became one of the fastest growing banks in North America.

Crowdsourcing spawned mobile-based neobanks such as GoBank and Moven which have shown enough success that American Express and T-Mobile have entered the space with Bluebird and Mobile Money. Peer to peer lending and crowdsourced websites such as Kickstarter or Indiegogo are now taking measurable business away from commercial banks and institutional investors.

Or in insurance, consider The Climate Corporation's insurance for farmers based on weather and related financial services big data. Or Oscar Insurance's healthcare coverage fees based on wearable technology. Or Metromile's per-mile car insurance fees. Some of these virtual and pay-as-you-go insurance companies are highly successful and now worth billions.

Crowdsourcing is a powerful form of product innovation that delivers demand-side ideation, near real-time customer feedback and recognition of the most influential demand drivers. It also measures acceptance testing for many product combinations and across customer segments.

But how do you know whether your idea is the next big thing or a big waste of time and money?

When part of an overarching social business strategy, crowdsourcing permits new thinking and early customer feedback. This in turn improves product fit and offers more controlled test launches to increase the likelihood of customer adoption.

Crowdsourcing changes the all too common inside-out analysis based on small groups of researchers, limited data and lots of speculation and instead uses online ideation to engage and solicit consumers for their ideas and their critiques on the ideas of others.

This process permits faster testing of R&D concepts with larger volumes of customer feedback. Near real-time access to large volumes of customer opinions also allows one-off test conditions and accelerates successive iterations so that new product innovation cycles can be substantially reduced. When consumer feedback can be acquired in minutes instead of weeks, companies are afforded more testing scenarios and valuable What-If analysis.

Introducing new financial products is a high risk venture. However, using crowdsourcing and online ideation reduces this risk, accelerates new product innovation, lowers R&D expense, accelerates time to market, and grows revenues by delivering products that customers embrace.


Reputation Management

The last social business use case I'm going to share in this post is reputation management – something that is particularly important to financial services institutions.

FSIs build their businesses on trusted reputations that have been carefully managed over many years. However, in the digital era, the public airing of complaints, grievances or past customer experiences can deliver an immediate, measurable and sustained impact to other prospects and customers' decision making. It's important to acknowledge that what others say about you is more influential to new customers than what you say about yourself. This is why social media trumps advertising.

Bankers, insurance agents, wealth management advisors and similar professionals who disappoint consumers are increasingly being called out in public forums and social networks that reach thousands or millions of potential or existing customers and have a duration of months or years.

In fact, online comments may never really go away. These remarks and conversations may eventually subside, but the information gets rediscovered indefinitely. If a bank or insurance agency is chastised by existing customers, new prospects will steer elsewhere and existing customers will take note, thereby increasing their likelihood of churn.

Remember Bank Transfer Day? This was a social media movement started by one consumer who got upset at a $5.00 monthly debit card fee by Bank of America. Ultimately, Bank of America nixed the fee, but not before an estimated 220,000 people moved their accounts elsewhere.

Or in another case reported by CNNMoney, a BofA customer upset with an interest rate allegedly "jacked up" by 30 percent created a YouTube video rant. The bank later reduced the interest rate, but not before the story was picked up by a slew of news media. Interestingly, the rant still comes up as a top search result when searching for a new bank. Ouch.

Many times reputation damage stems from non-digital sources but then escalates in the social sphere. For example, when local regulators probed Wells Fargo for an overly aggressive cross selling culture, the spill over into social media triggered additional state and local investigations, lawsuits, nervous customers and damage to reputation. Because Wells Fargo failed to adequately respond to the online incite, the story line spiraled based on (exaggerated and arguably inaccurate) digital inflammation.

Reputation management is aimed at discovering and responding to consumers who publicly post both valid experiences and misinformation. It's a big change from the typical ignorance is bliss strategy or practice of believing if you ignore it, it will somehow go away. It doesn't go away. In fact, it often gets propagated thereby giving it exponential reach and staying power.

Reputation management activities include social monitoring, alert notifications, customer sentiment measurement and trending, communication and response protocols, and early crisis management intervention. For many FSIs, reputation management is a part of Risk Management or a Customer Experience initiative.

Critical success factors include early detection and response, candid and transparent communication, public customer feedback channels and an overall etiquette aimed at fixing the problem, and not coming across as defensive.

Two final notes of caution. First, don't kid yourself that your customers are different, and do not consider the public comments, opinions and experiences of other customers when evaluating your company.

Second, don't fall into the all too common trap of trying to game the system. Many before you have suffered this fate, as illustrated in the below newspaper clipping and twitter post.

Financial Services Social Reputation Management