7 Reasons Why Banks Have Failed at Social Media… Miserably!
A recent study by The Financial Brand shows that quite a lot of banks are trying to leverage social media: 46.4% of them are on Facebook, 34.6% are on Twitter, and 18% of them have an active blog. However, a presence in social media doesn’t necessarily mean success in this new and exciting emerging medium, and some of these banks are second-guessing their forays into social marketing.
Entering social media with a poor strategy can only lead to disastrous results. Take Bank of America, for example, that took down its blog redirecting people to their main website after failing to engage their customers and industry leaders in a meaningful way. And how about Chase Bank, whose name consistently comes up in hate tweets, and does not seem to get a break on a simple sentiment analysis. Instead of talking back and engaging its customers, Chase Bank’s twitter presence @ChaseBank was mysteriously closed down.
The main problem with most social media initiatives taken by big banks is that they lack the long term support from upper management while trying to accomplish too much. There are simply too many things most banks hope to achieve through a social online presence, and many reasons why, by and large, their efforts are failing.
Here are some common problems banks should address in their social media strategy:
1. Banks Try to Build Community but Their Content is BO-RING!
One of the main motivations for businesses across the world to go online is to bring their customers together. Banks, too, want to form a tribe of loyal, dedicated followers who will choose their services over others every time. But it’s hard to do that with the boring, generic content that most banks have on their blogs and that they post to other social networking sites.
It’s not enough for a bank to have a blog if they don’t come up with compelling, relevant content for it. No one is going to read the blog, let alone become a loyal fan of the bank, if the articles don’t provide new information, or at least a new perspective on some banking issue. Even worse are the bank blogs where content is copied from some other source. That’s badly done, indeed!
2. Banks Try to Market Themselves but Their Site is Ugly
Banks also want to find new customers via their social networking efforts. They don’t just want their current customers to become loyal fans, but they want to convert people who use other banks to their brand. It’s hard to do this, though, when they create sites that people won’t choose to stay on any longer than they have to.
Between making terrible choices in background and color schemes to making blogs that are hard to find and even more difficult to navigate, many banks might actually be turning customers away though their social media efforts instead of drawing them in. When a new potential customer sees a blog that hurts his eyes or is hard to get around (if he can even find it in the first place!), he’s less likely to utilize the bank, not more.
3. Banks Try to Serve Their Customers, Who Don’t Even Know the Bank is Online
Banks usually have good intentions behind their blogging endeavors. They want to better serve their customer base. Since they know many of their customers are online, they try to go where those people can find them. However, most banks fail to successfully promote their blogs or other social networking efforts, so no one even knows that they have the option of getting help online.
Just a quick test to prove my point: look at the images below. How many of these social media initiatives by a financial services institution are you aware of? If you recognize more than 2, I’ll be surprised.
One of my favorite bank blogs is INGDirect’s We The Savers, packed with fantastic content aimed at helping account holders to build up their savings. However, all that fantastic content goes mostly unread: INGDirect has failed to cultivate followers and traffic, with a paltry 2k average monthly visitors out of the nearly 2.5 million unique visitors they get on their main banking site.
A clear exception to this problem is Chase’s Facebook Community Giving charity campaign, that was backed up by a formidable PR and communications plan that helped them get more than 2.5 million people to follow them on Facebook.
4. Banks Try to be Transparent but Have No Strategy or Permission
Many banks hope that their blogs and other places of social media presence are places where they can get real with their customers, where they can say what’s on their minds and talk about why they operate the way they do. This can be a Catch-22, though, if customers refuse to be pacified when they don’t get the answers or the information they want. Without a well-developed strategy for answering customers’ questions and dealing with their dissatisfaction, being transparent can add to a bank’s risk instead of eliminating it.
Also, being transparent and totally honest many times collide with the complicated and sensitive regulatory guidelines they have to follow. Don’t believe me? Ask any bank lawyer what they think of social media. Or simply check out the amount of disclaimers on Citi’s twitter page. Really, you can’t but laugh.
5. Banks Try to Find Out What Their Customers Want but Are Slow to Respond
A lot of banks want the people connected to them via social media to share their opinions. They want to know which products their customers want, what decisions they can make to improve consumer relations, and even what they’re doing that annoys people.
Unfortunately, sometimes banks aren’t actually willing or able to do what their customers suggest, so the strategy backfires. They don’t seem to understand that they need to be willing to implement some customer suggestions, even if they’re not in the bank’s best interests. Otherwise, people won’t come back to the blog, won’t become fans, and won’t be those loyal members of the tribe.
Or worse: they will probably make their own youtube video to catch your attention, like Rockerchic4God did when she declared debtor’s revolt after Bank of America raised her credit card rate to 30% APR without notice or apparent reason:
6. Banks Do Not Understand Community Engagement
Let’s face it: most of banks are led by a previous generation of management workforce, one that is used to think of customer interactions as transactions. And It’s hard to blame them, since a bank is, first and foremost, a guardian of money transactions. The problem is that the new generation of customers puts experience over features and sometimes convenience. Social media exacerbates the issue by giving this new generation the tools and outlets to engage and interact with their favorite brands, services and products. But are banks ready to engage as well?
Another trend that seems to be working for big companies is to put a face to the organization. A small number of bank personalities have ventured themselves into social media with full thrust, such as June Walbert from USAA, whose twitter presence serves as a direct connection to customers of USAA, or Peter Aceto, CEO of ING Direct in Canada, who engages customers, associates, and partners via his twitter stream or his INGDirect branded personal blog, properly entitled “Direct Talk $$$“.
And it is not just about engaging customers, how about bank employees? Deutsche Bank recently jump-started an initiative to use social media to unite employees.
7. Innovation Is Just Not Coming From Existing Banks
When was the last time banks introduced some game-changing technology or innovative product? Many people argue the ATM is probably the last significant innovation from banks… and that was in 1969! Companies like Mint, LendingClub, SmartyPig, and CreditKarma are all very innovative takes on traditional financial products. Stock picking communities, person-to-person lending, personal finance management and even credit score management tools, have emerged to serve the changing needs of customers exclusively served by traditional banks.
But what do these innovative companies have in common? For starters, they all started outside of the traditional banking system, filling the void. But the more interesting part is that their growth is in part due to how they have seamlessly integrated social media and networking into their products and communication strategies.
Bonus: Banks Don’t Understand How Social Media Works
To be fair, social media is friggin’ hard. The emerging social media revolution is just starting, and there is an explosion of platforms and outlets that make it confusing and costly (at best) to create an integrated social media strategy. This makes is even more confusing to the bank’s marketing head sitting in his/her 26th floor corner office in the financial center. Even the social media gurus are figuring it out as we go along: Brian Solis and Jesse Thomas have tried, repeatedly, to visualize and explain the social media landscape to glass-eyed top management figures while Celent’s Jacob Jegher has put a good effort to demystify social media to banker types. Establishing, managing and fostering conversations over social media takes time and dedication.
What has been your experience when dealing with a bank’s social media presence? Do you think they can survive the paradigm shift in customer engagement, or should they focus their marketing budgets elsewhere?
Wednesday, November 10th, 2010 at 3:16 am