It’s a question asked by a lot of bankers these days: How can we play this social media thing? While social media operations such as Facebook and Twitter offer unparalleled outreach to customers at a personal level, banks also face the risks of negative – and very public – feedback and uncertain financial returns.
Few people are better able to advise bankers on how to handle this conundrum than Randi Zuckerberg, the former marketing head of Facebook (and sister of Mark Zuckerberg of The Social Network fame). Earlier this year, Zuckerberg announced her resignation from Facebook to form a company called R to Z Media, which she said will “work with media companies to develop their programming in new, and more social ways.” While at Facebook, Zuckerberg had pioneered the live streaming of video coverage of news events through Facebook Live and was nominated for an Emmy Award for her work on the 2010 mid-term elections.
Zuckerberg will explain in detail how financial institutions can transform their social media strategies to reach customers more effectively at this year’s BAI Retail Delivery. Some of the highlights of her presentation are previewed in the following interview with BAI Banking Strategies, where she discusses some successful social media initiatives by American Express Co. and JPMorgan Chase & Co.
Q: Bankers have often been hesitant about leveraging social networks and building online communities. How do they reach out to customers without being seen as too aggressive? What’s the best approach? What can social networking accomplish for banks and how should they attempt to seize those opportunities?
Zuckerberg: It’s true that banks have a slightly bigger challenge getting people to “like” or follow them, but this should be seen as an opportunity, rather than a handicap. It just means that bankers need to roll up their sleeves and be a little more creative.
Design a fun, non-intrusive experience, with clear incentives for participation and the fans will come. For example, take a look at the recently launched and extremely creative Foursquare/American Express partnership. American Express Co. cardholders in Texas who checked into Foursquare were prompted to use their AmEx card to receive cash back rewards. The program was so successful, they expanded it nationally. While you might not have guessed that people would traditionally want to “like” a financial institution online, this campaign was a prime example of something that was both fun for consumers and delivered measurable results.
Q: Looking at Facebook specifically, what are the opportunities for financial institutions on this site? What kind of strategies have financial institutions been using with Facebook and what have been the results so far?
Zuckerberg: One of the biggest wins I have seen for banks on Facebook is when they show a “more human side,” by doing things like highlighting employees or showcasing philanthropic initiatives. The Chase Community Giving Project on Facebook is one of my favorite examples. JPMorgan Chase used Facebook to crowd-source some of their philanthropic giving and ultimately grew their likes to 2.8 million, while receiving millions of viral impressions as people shared content with their friends. The program gave Facebook fans the opportunities to suggest their favorite charities for funding, while simultaneously making them feel like they had a vested interest in Chase and their philanthropic work. Brilliant!
Q: One reason banks have been uncertain about social networks is the issue of measuring return on investment (ROI), which can seem nebulous to some. How should bankers address this question of ROI as it pertains to social networks?
Zuckerberg: Well, this is the million dollar question, now isn’t it! It’s a tricky one because ROI is so dependent on the specific goals of your financial institution. Are you looking for new customer acquisition? Facebook ads provide an extremely cost-effective and highly targeted way to reach people connected to competitive financial institutions or going through major life changes like graduating from college or getting married and opening a joint account.
Other banks may measure ROI through customer retention. By engaging customers online, responding to their customer service questions quickly and getting them involved in fun campaigns like the AmEx/Foursquare campaign, or philanthropic initiatives like Chase Community Giving, financial institutions can build intense brand loyalty, instantly see the topics that resonate with fans, and retain customers that previously may have gone elsewhere.
Q: Successful social media seems to require a different cultural mindset than is often found at financial institutions. How can banks create a culture within their organizations that is conducive to effective social networking without becoming too bureaucratic and corporate?
Zuckerberg: Successful use of social media can be scary because it means a certain loss of control. When you engage with fans, there are so many wonderful benefits – but you also need to be ready for the odd critique or disappointed rant that comes with the territory. And don’t even think about taking that negative post down! That is a huge no-no in social media land and will just get you in trouble. Unfortunately, many companies tend to deal with this fear by posting very bland, boring content, or just a Really Simple Syndication (RSS) feed of press releases from their corporate Website. While that won’t hurt, it’s not going to help ROI either.
If you’re managing your bank’s social media page, and feel like you’re swimming upstream against a more conservative culture, I would suggest proposing a few “trials” – starting small and testing out a few things. Once you have a few successes under your belt, do a road show around the company to get people excited about your progress so you can gradually go bigger and more creative.
Mr. Cline is managing editor of BAI Banking Strategies. He can be reached at email@example.com.