Social media has emerged as a channel that offers banks a unique and, quite possibly, unmatched opportunity to engage with customers on a whole new level. In fact, those that leverage this channel correctly are better positioned to build customer trust, increase brand loyalty and drive more revenue. Many banks have taken advantage of the social media revolution but others are still trying to determine the proper strategy and timing to launch their sites. And some have not taken any steps to enter the social media world whatsoever.
According to ath Power’s recent study on Social Media and Banking, over half of consumers say that a bank having a presence on social media improves their impression of that organization. In our national survey of over 1,500 banking consumers, participants were asked how they were most likely to use their bank’s social media sites. “Participating in Contests/Promotions” topped the list with 53%, followed by “Researching Products/Services” (40%), “Getting Recommendations From Other Customers” (34%), “Posting a Positive Experience” (34%), “Showing Support for Their Bank” (34%) and “Addressing Customer Service Issues” (32%). Just 1 in 4 said that they were most likely to use this channel to “Post a Negative Experience” and only 1 in 5 cited “Purchasing Products or Services” as a reason to visit their bank’s social media sites.
The study further revealed that 48% of customers find their bank’s social media sites to be somewhat useful while only 19% find them to be highly useful. While these results are not atrocious, they clearly leave room for improvement. And how could banks make their sites more relevant and valuable? Respondents offered the following suggestions:
Offering sweepstakes and promotions for fans to enter (47%)
Being more interactive with fans/followers (45%)
Providing areas to submit customer service issues (40%)
Presenting more up-to-date information (38%)
Improving response time to comments/questions posted on the site (36%)
Customers are willing to visit your social media sites, but only if they see value in it. So, serve them how they want to be served. Social media is 100% about the customer relationship so if you want your social media initiatives to be successful, you need to take the following steps to engage your customers:
Listen to your customers. Communicate the value you place on their input, whether it is favorable or issue-related. Social media is one of the most powerful tools to obtain honest feedback and suggestions from your customers. Make use of this feedback to anticipate and alleviate complaints as well as to tweak and develop products and services based on customer wants and needs. The goal here is to collect this worthwhile information and use it to improve the customer experience.
Provide customers with content that they actually can use and will find valuable. This includes product information, current rates and fees and even updates on bank changes. For instance, if your bank is going to implement a new checking fee, you can proactively inform your customers, explain the reasoning and how it will affect them rather than reacting to complaints after the fact. Use social media as a place to educate customers, even about the negative, and you will demonstrate your integrity and transparency – key drivers of satisfaction through building trust.
Avoid robotic responses when replying to customer posts. Customers want to know that you are actually interacting with them on a personal level and that you care about their individual questions and concerns. This is a medium for human interaction, so be genuine.
Respond in a timely manner. Ignoring customer questions or complaints can be utterly detrimental within this channel. Do not launch your social media sites until you have the resources in place to be able to interact with customers, as this is a real-time channel where customers expect real-time responses. It will be necessary for the employees operating your social media sites to have the authorization to make instant decisions and the proper training on how to respond to specific questions and customer issues.
Keep your social media sites updated. If you are not posting new and relevant content on a regular basis, you send the message that you are not truly involved in interacting with your customers via this channel. Your audience will quickly stagnate and lose interest.
Our research shows clear customer interest in participating in contests and promotions so why not test this out on a small scale and see how much traffic you drive to your sites? JPMorgan Chase is currently running a promotion to “like” their Chase Freedom Facebook page for the chance to win a $1,000 grocery gift card. Once consumers “like” the Chase page, they submit their contact information and are automatically entered. This contest captures information on potential customers who Chase can reach out and market to in the future.
Another way banks are finding success in attracting customers and prospects to a social media page is to offer them better rates just for submitting an application via this channel rather than going to a branch, using a call center or submitting it through their company website. This type of promotion can also work by offering other incentives if a product is purchased via the page, i.e., a specific gift card if they open a new checking account or a $50 credit for opening a new credit card. This is a way to incent customers to not only interact with their bank in social media but also to purchase specific products.
Additionally, promote your involvement in the community. What charitable foundations does your bank support? Do you host or sponsor local or national events? Customers want to see the softer side of banks and want to know how they are giving back to their communities, especially in the wake of the economic crisis. They are interested in knowing how their bank is helping to repair the damage that was done. Show them.
We all know that fully engaged customers are more loyal customers. Social media users, particularly those that visit your bank’s pages, are definitely more engaged than those who do not. With that said, 91% of the consumers we polled who considered themselves regular users of their bank’s social media sites also considered themselves highly loyal customers. Combined with trending and volume data, this loyalty statistic may be an early-stage analysis tool for correlating friends and followers to revenue.
Mr. Aloi is president and CEO of ath Power Consulting, a marketing research firm based in Boston and Washington, D.C. providing demand-side research to banking and financial institutions. He can be reached at [email protected].
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