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highlights

 

A Look Ahead to U.S. Retail Banking in 2014

Moderate optimism is the theme of this BAI Banking Strategies Executive Report in which we interviewed bankers of institutions large and small as well as a number of major solutions providers.



Retail Delivery: Reinventing the Customer Experience

As the retail banking industry emerges from the recent financial crisis, it faces the twin challenges of reinventing the customer experience while reining in costs.



Banking on the Social Network
Despite compliance issues and the difficulty of measuring returns, a panel of bankers says social media has emerged as a must-have marketing tool. by KAREN EPPER HOFFMAN
Sep 27, 2011  |  0 Comments

Social media is evolving from a novel place to be for banks to a must-have in their marketing arsenals, an evolution on bright display at the upcoming BAI Retail Delivery with a presentation by former Facebook executive Randi Zuckerberg and panel discussions on using social media analytics to drive product development and marketing and realizing the potential of social networks to support relationship banking.

We recently asked bankers participating in both panel discussions to answer questions related to the nitty-gritty issues of implementing social media in their organizations such as measuring return on investment, compliance and internal support structures. They were Aaron Chestnut, senior vice president, retail marketing, Memphis-based First Tennessee Bank; Kevin Lynch, senior vice president, eCommerce/Contact Center, at 1st Mariner Bank of Baltimore, Md.; Chris Swanson, vice president, Small Business Internet Strategy, U.S. Bancorp, Minneapolis; and Matthew Wilcox, director, E-Business Strategy, Salt Lake City, Utah-based Zions Bancorporation.

As can be seen, while differences of opinion arose on specific tactics, the panelists were unanimous on the need to get up to speed on using social media for marketing purposes:

Q: Do you see social media primarily from a defensive perspective for protecting your bank’s reputation, or from an offensive perspective, as in proactive marketing?

Swanson: The term “defensive” is a little bit loaded. We first ventured into social media because we recognized that customers were out there talking about us on social media channels. As we started listening, we found that we could really connect with our customers there from a service standpoint. We could offer assistance to customers who maybe were having a frustrating experience with the bank.

We’re finding more and more that social media really needs to be integrated with our overall marketing plans. Our small business customers, for example, have specific needs and a well-defined way of looking at their financial institution. Using social media provides a means to connect with them in new ways.

Chestnut: We use social media to monitor and engage when people seem to be having problems with us. Our customer service folks look for people who seem to be having some issues with us and we engage them to take the conversation off line. If we’re able to solve their problem, we also encourage them to tell other people that everything turned out okay.

We’re also doing a lot with LinkedIn and Facebook. And we recently launched ratings and reviews of our Website with Bazaarvoice. We are collecting a lot of great customer insight and feedback on our products and services that we are then able to get to the right areas of customer service, highlighting where there might be disconnects. Some of the feedback even gets into product design. And when we receive a lot of feedback, we can share it within our marketing messages, for example by saying, “Four-and-a-half stars out of five for our banking online offering, based on our customer feedback.”

Wilcox: When we started looking at social media, it was much more of a defensive strategy. There are already discussions about our brand out there and we wanted to engage in those conversations to protect the brand from potential negative sentiment. The strategy, as we originally rolled it out, was very conservative and we spent the majority of our time just listening to the voice of the customer.

As we’ve gone through this and learned more, we developed more of an offensive strategy. That has really propelled us into protecting our brand by being engaged in the conversation. And we’re actually helping create that positive brand sentiment by being the first to engage and approach our customers or prospects, or anybody who really has a voice in social media. The offensive part of the strategy has really grown immensely as we become more sophisticated in the space.

Lynch: We really look at it more as a branding and marketing opportunity. But if you’re trying to be proactive, you really have to ensure you meet the legal and compliance requirements. So, we avoid mentioning any specific products or services that would require those types of disclosures, such as an interest rate on a home equity product. If you’re trying to use a Facebook page to market a product like that, it loses its friendliness. We’re a community bank, we’re local and we like to emphasize that local flavor.

We had a case where a woman was trying to get in touch with one of our collection people. She went on our Facebook page and posted, “Hey, I’ve been trying to call this guy and he won’t return my calls.” So, we responded, “Sorry you’re having difficulty, here’s a direct number for him in the event you don’t have it, please call again.”

Q: What kind of information or data has your bank gleaned from social media conversations to learn about customer preferences, and possibly design new products and services?

Wilcox: It still surprises me to this day the amount of information people are willing to share in social media. We look at it as a free nationwide focus group where we can see what conversations are taking place, not only about our brand, but also about products that we’re interested in promoting or creating.

Social media research played a role in the development for our mobile banking product. We looked at what people were saying about our existing mobile banking framework and what they were looking for from future mobile banking initiatives.

Swanson: We use Radian6 to monitor what’s happening across the social media channels. We cover Facebook and Twitter and all the mentions of U.S. Bank across the Web. We collect and aggregate all of the information from across the different social media channels and our corporate marketing team puts that into a report that’s then updated on a monthly basis. That allows us in the lines of business to measure the sentiments and trends being observed across a wide variety of different topics.

Within my business line, we get that reporting for small business specifically so that we can see what’s being said about some of our specific products and small business services. While that information itself is valuable, it’s really not enough to make some specific changes to products. But from a business line standpoint, it helps us know directionally the customer sentiment about a specific product. That may affect the way that we position the product, it may affect the way that we market the product and it may affect pricing or service associated with a product.

Lynch: When the debit card processing situation was changing, we tried to get the word out that people would have to agree to use our overdraft services. We posted a blog on our website about it and we got a lot of really good feedback from customers. People were saying, “Well, I never use the service so I don’t see why we need to sign up for it.” That was a very good example of where you can actually have a dialog about something that’s a little bit complex.

A couple of years ago, we were looking to build a checking account for 18- to 25-year-olds. At the time, I had a couple of folks who worked for me who were in the 22- to 24- age group. They actually went out to their own Facebook network and asked questions like, “How did you choose your first account? What are you looking for in a checking account?” We received very valuable feedback that reinforced some of the things we were already thinking about doing and helped us sell the plan to other managers. Two years ago, we built First Access Checking based in part on the Facebook feedback.

Chestnut: We have garnered a great deal of information in a very short period of time from our ratings and reviews from Bazaarvoice. For example, with mobile banking, we learned that our Android app was not as clear as it could be and it was a little bit buggy. We were able to work quickly with the product teams to make sure that those bugs were addressed and fixed.

Q: How do you integrate social media activities with the bank’s business lines, so that they don’t become some kind of isolated outpost, separate from the business lines? How do you then disseminate that data to the rest of the bank?

Swanson: We’re still in the process of evolving the support structure for social media. There’s a definite realization at the corporate marketing level that social media needs to be part of the business lines. The business lines need to buy into it and it needs to be something that exists a step down from the corporate level. Each business line, including mine, has some unique needs. One social media strategy for the entire organization really isn’t going to work for everyone.

Within that context, we want to use the same tools; we don’t want each of the different business lines at U.S. Bank to have a Facebook page. We want to maintain consistency in terms of how we approach each of the different social media tools that might be out there and we want to be consistent in how we measure it. The expectation is that the social media team from each line of business participates with the larger social media community here at U.S. Bank so we can talk about best practices.

Speaking specifically from my business line, we just recently launched a new Youtube video and a new Facebook initiative called “Things Are Looking Up,” where small business customers or owners log in and share a story about how things are looking up for their business. The site features a mosaic with logos of the businesses that are participating in it and Facebook users, or customers of those small businesses, can log on and vote for each business.

Wilcox: We created what we call an “executive dashboard” specifically for social media and tailored to each individual business line within our institution to share metrics and voices. It gives executives a feel for what’s being said in the community about the brand and products we may or may not be offering. We do it on a weekly basis for some individuals, but mostly on a monthly basis as a snapshot. It’s shared with the executive management committee, and then they take it to their individual businesses and business lines.

Lynch: We published a social media policy for employees almost a year ago. We wanted to outline specifically who can represent the bank in the social media channels, and also let employees know that they have to be very careful about what they do if they’re not one of those people. Somebody on my team has been going out and speaking to all of our branch personnel about Web access, including a whole presentation on social media – managing the risks both on a personal level and a business level.

We’ve also been working with our executive banking group to help them leverage LinkedIn and get signed up to start connecting and start using that professional networking tool to help promote themselves as well as connect with others. We’re the evangelists for social media activities.

Q: How do you measure success in a social media effort; what kind of metrics do you use?

Wilcox: That’s ever-evolving. It was tough as we built the business case, because there originally were not a lot of solid metrics around social media. Like everybody else, we’ve counted the number of followers, the number of people who like your brand, all of that.

But now what we’re really looking at is more of a return on investment and return on engagement. How many mentions do we have? How many proactive posts about the brand do we have unsolicited? We’re also managing and monitoring dispute resolutions so we know what a dispute may cost us to resolve in a branch or in our contact center.

Swanson: We measure the number of customer service touches that we have through social media channels, including Facebook and Twitter, and we measure how many of those service issues are resolved, or remain unsolved. We look at the number of fans that we have on the different social media sites out there, our level of fan engagement and how much traffic we drive to our U.S. Bank sites through social media.

One thing we haven’t really figured out – and I think this is still very much the $64,000 question for social media as a whole – is how social media can be monetized. We haven’t cracked that nut to understand how and if social media has a positive relationship with revenue, but it’s something that we continue to work on.

Lynch: We don’t really measure it. I always find it the most interesting conversation at any conference, when somebody in the audience raises their hand and asks, “How do you measure the ROI of your Facebook page, or of social media?” Well, how do you measure any conversations that people have out in the branches? How do you measure conversations people are having at cocktail parties? To me, that’s really what social media is; it’s just another area or another way to meet people where they are. If you’re looking at it from the standpoint of building your brand and connecting with customer prospects, it’s just another way to do that. I’m not sure you can necessarily measure that.

Chestnut: There’s the hard and the soft. To measure the soft, we look at levels of engagement. For example, it’s not as important to us how many Facebook “likes” we have but rather how active those likes are. Are we engaging the folks who are visiting our Facebook page, or are we running programs that just maximize the amount of likes?

We don’t see ourselves as having figured everything out yet. We have been taking a slow and meticulous approach. We are investigating tools like Radian6 but, unfortunately, a lot of the solutions are pretty darn expensive.

Ms. Hoffman is a freelance writer based in Lawton, Oklahoma.

 

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