Tag Archives: Facebook

Five Not-So-Best Practices For Banks On Facebook

While researching an upcoming Aite Group report on What Bank Marketers Should Do With Twitter, I stumbled across an article on Mashable titled 5 Best Practices for Financial Institutions on Facebook (no link deserved). After stumbling across it, I fell face down in the pile of cow dung that the article is. The article list five best practices for FIs on Facebook:

1) Don’t just talk about banking; 2) Host contests; 3) Offer career advice; 4) Be cool; and 5) Show off your good work.

My take: To call something a “best practice” implies that it produces a positive, desirable business result. If you can’t prove that it does, you need solid reasoning and logic why it should. Unfortunately, the Mushable (intentional slur) article does neither.

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Let’s examine these so-called best practices one by one:

1. Why shouldn’t you just talk about banking? People have a million places to go online to interact on the millions of things that occupy their time. Why in the world would they go to a bank or credit union Facebook page to watch a soccer video? It’s not that it’s wrong to talk about things other than banking (which I would broadly define as things related to managing one’s financial life). But with the choices available, FIs need to train customers to expect certain kinds of content on their Facebook page. Random content about non-banking things won’t get people to come back often.

2. Hosting a contest can’t be bad, can it? For most FIs, hosting a contest on Facebook is like promising a friend you’re going to take her to a great party, then driving out to some god-forsaken barren, deserted place, dropping her off and leaving. So you’ve lured your customer to your Facebook with the promise of winning a contest (which, if they had a brain in their head, they would know they wouldn’t win), and then after they get there, you do nothing to keep them there, because the content on your Facebook is just a bunch of irrelevant drivel, rehashed from marketing messages dreamed up by some marketing intern. Nix the contests.

3. Bank of America is where I always turn for career advice. No better place to turn for career advice than to companies going through their own RIFs. If you take career advice from a bank, or ask a bank for career advice, I hope I’m never stuck in YOUR line at the cash registers at Frenchy’s Adult Book Store.

4. Be cool. Dear Mashable: Telling a bank to “be cool” is like telling Joe Biden to “be articulate.” And a bank does not qualify as cool just because it used the word “huzzah” on its Facebook page.

5. Show off your good work. I’m actually inclined to agree with this one. People who interact with their banks on Facebook are highly engaged in their financial lives.  They’re not their to chit chat, watch soccer videos, or talk about whether or not they should quit their jobs. They’re looking for a deeper connection with their chosen FI (I know that’s hard to believe, but they are the minority), and want reinforcement that they’ve made the right decision about who to do business with. So go ahead and toot your horn from time to time.

Facebook Does Not Want To Be Your Online Bank

CNNMoney recently published an article titled Facebook wants to be your online bank. The article has garnered more than 1,000 tweets and more than 900 people clicked on the Facebook Recommend button.

Given many people’s habit of clicking on these buttons based simply on the title or after having read just a paragraph or two (recall that TV commercial where the girl says “I read an article online — OK, I read part of an article…”), I can’t help but wonder if many really knew what they clicking about.

My take: The title of the article is way off the mark. The article isn’t about Facebook becoming an online bank, and I find it hard to believe that Facebook harbors delusions of becoming one.

The article is about Facebook becoming a platform for banks to provide transaction and interaction services. According to the article:

“There are certain things, whether itʼs financial services, or banking where I donʼt necessarily want my friends to know exactly what Iʼm doing, right?” David Robinson, Facebook’s director of global marketing solutions, U.S. financial services, asked a crowded room of bankers at a SIFMA seminar in New York last month. “I want to be able to go in and have an experience with my advisor or my bank and have that be a one-on-one experience.”

Facebook is quietly planning just such an offering with Australia’s Commonwealth Bank. Currently in an internal beta, with the first version built in March, the application is expected to launch sometime this year to customers. It will allow Facebook users who are bank customers to make payments to third parties as well as Facebook friends through the social media channel, according to the bank. Commonwealth will secure transactions with its own authentication system — similar to how payments are secured on its online and mobile banking site, a spokesperson says.”

There’s a lot wrapped up in those two paragraphs, but none of it points to Facebook becoming an online bank.

If Facebook wants to become a platform where investors can  have a “one-on-one experience” with their advisors, it should think again. In the research that I and my colleagues have done on investors’ needs, desires, and preferences, never have any meaningful percentage expressed an interest in engaging in “one-on-one experiences” with their advisors on Facebook. And by “meaningful” percentage, I mean ONE percent.

Considering what Citibank has heard from its customers, the prospects of Facebook becoming a platform for banking transactions doesn’t look too promising, either. According to an article on the Bank Innovation site:

Citi asked consumers through its official Facebook and Twitter channels: If you could do your banking on Facebook – Would you? As of 2:30pm ET July 16, the majority of commenters wrote that they would be reluctant to do Facebook banking because of security concerns.

I particularly like the response from one Eric Bathke, who said “over my dead body.”

What’s important about these responses is that the sample is skewed. Remember, these are responses from people already interacting with the bank through social media channels. If the people who interact with the bank today through social media — and the number is pretty small — don’t want to bank through Facebook, what do you think the chances are that people who don’t currently interact with the bank through Facebook want to use the social network for banking transactions?

Bottom line: Three conclusions here:

1) If a bank marketer’s rationale for developing capabilities for its customers to conduct banking transactions on Facebook is “we want to be where our customers are”  then s/he should be fired for gross stupidity.

2) Facebook doesn’t want to be an online bank. ING Direct is an online bank. It offers banking products and services primarily (but not exclusively) through the online channel, and there’s no way in hell that Facebook would place that kind of business opportunity high on its list of opportunities. NOBODY wants to be a regulated financial institution in this environment. 

3) CNNMoney needs a new editor, a new writer, or both. The title of its article is so misguided that it makes me wonder if anyone there has any real knowledge of the financial services business. The lack of detail about the payments (retail and P2P) prospects for Facebook is where the real story is. 

Facebook Fans Aren’t Better Customers, Better Customers Are Facebook Fans

Marketers who obsess over driving social media connections (like Facebook likes and Twitter follows) because they see or hear that social media likers/followers are more likely to buy, are better customers, or whatever, are missing an important point:

Social media connections don’t cause the desirable behavior/attitudes — they’re the result of something else. That “something else” is customer engagement.

In a survey of more than 1,100 US consumers, Aite Group asked respondents how frequently they performed financial management activities like creating/managing a household budget, categorizing/forecasting their spending, analyzing the return on their savings and investments, and seeking help and guidance in making financial decisions (there were 13 activities, overall).

Based on their responses, respondents received a score for each activity and an overall Financial Activities Score. That score qualified them for one of three groups (with the percentage of the population each group represents): Level 1: Inactive (30%); Level 2: Moderately Active (50%); and Level 3: Highly Active (20%).

Highly Active consumers (Level 3) are the most likely to:

Grow their relationship with their primary financial institution. Just 4% of Inactive consumers expanded their relationship with their primary FI in the past 12 months (by increasing balances and/or number of accounts). Among Moderately Active consumers, that percentage is 11%, and among Highly Active consumers it’s 14%.

Refer their FI. Highly Active consumers are 1.5 times more likely to refer their primary FI to family/friends than Moderately Active consumers, and twice as likely as Inactive consumers. 

Use and reap the benefits of PFM. Nearly two-thirds of Level 3 consumers use an online PFM tool, in contrast to just one in four Level 2 consumers, and one in 10 Level 1 consumers. More importantly, Highly Active consumers reap the benefits of PFM. In a soon-to-be-published Aite Group report, I defined three levels of benefits that users achieve from PFM: 1) Oversight: The ability to know where their money is and where it goes; 2) Insight: The ability to better control and manage their financial accounts; and 3) Foresight: The ability to make better financial decisions. Among PFM users, Highly Active consumers are four times as likely as Level 1 and 2 consumers to have reached the Foresight level of benefits. The benefit to FIs of PFM users reaching the Foresight level will be described in the report.

Connect with FIs on social media. Among Highly Active consumers, nearly three in 10 are Facebook fans of their primary FI, and one in five follow the FI on Twitter. Among other consumers, those percentages are in the low single digits.  Looking at it from a different perspective, of the customers that follow their primary FI on Twitter, 95% are Moderately Active or Highly Active consumers. Ninety percent of Facebook fans come from these two segments.

Bottom line: Encouraging customers who aren’t actively involved in the management of their financial lives to “Like us on Facebook!” or “Follow us on Twitter!” is a waste of financial services marketers’ time and efforts. The customers who make those connections are already good customers. 

Customer engagement — engagement with one’s financial life — is what financial marketers should be encouraging.

 

 

If Not For Everybody, Who Are Credit Unions For?

In an interesting post titled Credit unions: not for everybody on the Shared iDiz site, Brian Wringer writes:

“A whole lot of people — the majority of consumers, really — could benefit from switching to a credit union. Why, oh why, do all those people insist on throwing their money away with banks? But I prefer to look at it another way — CUs appeal to an elite, exclusive group of people. Overall, I’d say it’s a group of people who are paying attention. I’ve seen stats indicating that CU members on average are a little healthier, wealthier, and even better drivers than the average. CU members seem to make slightly better decisions in life.”

My take: An interesting assertion. CU members pay attention, and are healthier, wealthier, and make better decisions–OK, slightly better decisions–than other consumers. But is it true?

Based on a survey just completed by Aite Group and BancVue, I might be able to shed a little light. The problem is we didn’t capture data about CU members–we identified consumers who consider a credit union to be their primary financial institution.

That’s obviously just a subset of the overall member base, but if this subset isn’t more attentive, healthier, wealthier, etc., then Brian’s assertion holds little water, since CU members who don’t consider a CU to be their primary FI likely consider a large bank to be their primary FI, and that’s just not going to support Brian’s contentions.

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The first challenge we have is in defining what “pays attention” means. Could mean a million things, but I’d like to propose that from a financial services perspective, we could create a proxy for “attention” by looking at the various financial management-related activities that consumers do, and the frequency with which they do them.

The survey asked respondents about 14 different financial-related activities like creating and managing a budget, categorizing and forecasting their spending, analyzing the allocation of and returns on savings and investments, accessing financial educational content, and seeking advice on a variety of financial-related topics.

I assigned points based on the frequency with which respondents did the activities — ZERO points if not done at all, and up to 10 points for an activity that was performed on a weekly basis. Theoretically, credit unions could achieve a total score of 140 if 100% of the people who consider a CU their primary FI (let’s call them CU primary members) did each of the activities every week.

I computed the score not just for CU primary members, but for people who consider a large bank their primary FI, and for people who consider a community bank their primary FI.

The result: Large banks received a score of 22.3, credit unions scored 19.3, and community banks got a 17.5. Across the range of activities, more large bank primary customers performed the activities, and did so more frequently, than CU primary members.

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Let’s take a look at income. Forty-two percent of large bank primary customers earn more than $60k per year. The corresponding percentage for CU primary member is 35%.

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Wondering about level of education? After all, they say (I don’t know exactly who, but you know, the royal they) that educated people are healthier than uneducated people. Among large bank primary customers, 52% have a college degree or higher. Among CU primary members, it’s 41%.

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In case you’re interested, large bank primary customers and CU primary members are equally as likely to “friend” their primary FI on Facebook (a paltry 12%), and about as likely to view videos on their primary FI’s YouTube page (a measly 5%). Large bank primary customers are nine times more likely their primary FI on Twitter than CU primary members, however (9% for large bank primary customers, 1% for CU primary members).

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Among CU primary members, just 34% are working full-time. Compared to large bank primary customers, CUs have a higher percentage of the unemployed, homemakers, and retirees. Not that I’m saying these groups don’t make good decisions, or aren’t good drivers.

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Bottom line: I think you get the picture. Any belief that CU members are healthier, wealthier, wiser, more attentive, more this, or more that, than other consumers might be the result of smoking something illegal. 

If you share those illegal things with me, though, I promise not to tell on you, and I’m sure I can find a way to massage the data to support your view of the financial services world.

What’s The Value Of A Social Media Guru?

A recent article on FutureLab reported on some “math” computed by cloud data backup service Backupify.

To compute the value of participants to various social networks, the firm divided the estimated valuation of the company by the number of users of each social network, and called the result the “value each user contributes to the company’s value.”

It found, for example, that the value of a Facebook user is $118, roughly $46 more than the value of a Twitter user, and about $100 more than the value of a Yelp reviewer.

But Backupify didn’t stop there, no siree.

It took each company’s estimated annual revenue and divided it by the interaction volume. This calculation revealed that a Yelp review is worth $9 to Yelp, while a tweet is worth $0.001 to Twitter.

My take: If I have to explain the idiocy of these calculations, please leave this site immediately. You are not worthy to read this blog, nor to interact with the intelligent people who regularly read and comment on this site.

Oh, and when you leave this site, please follow me on Twitter, and start tweeting a few thousand times to help Twitter increase its valuation.

This approach to the valuation of social network followers did make me wonder, however: What’s the value of a social media guru?

The Value Of A Social Media Guru

I have developed a formula that I believe could become the industry standard. Maybe it will come to be called the Snarketing Index. (Oh stop dreaming, Ron)

Here’s how to calculate the value of a social media guru:

1. Take the guru’s number of Twitter followers.

2. Add his/her number of Facebook fans.

3. Add the number of his/her blog subscribers.

4. Multiply by average number of mindless, patronizing comments per blog post (“Great post!”).

5. Multiply by the number of times “Book me to speak!” appears on guru’s blog.

6. Multiply by the number of times a blog post titled “What Pinterest Means To Brands” appears on the blog.

Still with me? I know this formula is getting complicated, but I have an MBA in Finance and Statistics so I know what I’m doing. There’s one more step to calculating the worth of a social media guru. After you arrive at the total produced by Step 6:

7. Multiply by ZERO.

Two Types of Social Media Gurus

It seems to me that there are two predominant types of SM guru:

1. The guru who applies old-world marketing concepts to social media channels (“increase your reach with Facebook!”)

2. The guru who applies absolutely no prior marketing experience or concepts to social media (“social media will revolutionize marketing!”)

It’s amazing to see what these folks say and not only get away with, but get quoted as if it’s something brilliant.

In one recent interview, a well known SM guru said “most companies’ think Big Data is most easily deciphered by tag clouds.” Oh really? Mr. Guru really needs to start talking to a wider variety of firms.

He’s also quoted in that interview as saying:

“We’re 5-6 years into the evolution of social media marketing, and most brands still suck at it.”

That’s an interesting comment. We’ve been doing mass media marketing for how long now? Sixty years? Have we perfected it, got it right, or stopped “sucking” at it?

Exactly how long should it have taken to get social media marketing right?

Maybe most brands still suck at it because the advice they get from social media gurus suck. Did the gurus ever consider that? Of course not.

The Real Value of Social Media Gurus

Despite my skepticism of the value that SM gurus provide, I will concede that there is one potentially important role they play: Catalyst.

I learned this lesson from a USAA exec. We were chatting over drinks (well, at least, I was drinking), discussing some research published by a former colleague of mine, research that I really didn’t find to be of particularly high quality.

My USAA friend said: “You don’t get it. I don’t care if the research is any good or not. It helps me prove the importance of what I’m doing to my bosses.”

He was right. I didn’t get it. But now I do.

So use these SM gurus to help you prove the importance of SM if that’s what you’re trying to do. But take what they say with a grain of salt, and a heavy dose of skepticism.

Social Media Malpractice

Imagine that you went to a doctor who gave you bad advice, and as a result, you either became more ill, or didn’t get better. You’d sue for malpractice, wouldn’t you?

I want to know how to sue social media gurus for the lousy advice they give.

This latest example of social media malpractice is so egregious, it makes me wonder not just how the purveyors of this bad advice survive in the market, but who the hell reads this stuff, and finds it valuable. The example I’m referring to is an article titled 5 Simple Steps to Measure Social Media ROI on Social Media Today.

Let’s dissect the stupidity:

1. Determine Your Social Media Spend (SMS). Social Media Today: This includes hard and soft costs, including your time. Yes, time! Despite what social media zealots say, social media is not free. Count it all.

My take: Right off the bat, we have an issue: What exactly are we measuring the ROI of? When you calculate the ROI of a direct marketing campaign, do you allocate every little cost that the organization incurs? I mean, if the cleaning crew didn’t clean the office, then maybe marketing couldn’t execute a campaign. Ideally, you would allocate all costs (hopefully, based on an activity-based costing model) to individual campaigns. But we don’t, because what we’re really trying to capture is the ROI of the incremental investment made. The fixed costs are sunk, given.

The same principles apply to social media. What we really need to measure is the ROI of social media campaigns. Ideally, we would allocate the cost of social media infrastructure, but what’s more important is to understand the ROI of individual social media campaigns — not just social media as a lump sum investment.

But there’s another issue here: Sometimes social media isn’t a standalone campaign, but a contributor to an existing effort or initiative. So to calculate SM ROI we’d need to know the ROI of the initiative or investment without a social media component. Good luck with that. 

2. Determine your Customer Lifetime Value (CLV). Social Media Today: This is a terribly important metric, yet most companies don’t know it. Know it. Marinate on this: If I buy your $200 shoes and go away forever. I’m worth $200 to you. If I buy your $200 shoes and you keep in touch with me, inspiring me to share my experience in social media, and 30 people buy your shoes as a result of my endorsement, my CLV just shot up to $6,100. Ask your current customers how much they roughly spend on your product each year, then, multiply by 20 to arrive at their CLV.

My take: HUH? Ask your customers how much they spend then multiply by 20 to calculate CLV? Are you serious? CLV is a near-impossible metric to calculate. Marketers generally have little insight into how long a customer will stay for, how their spending patterns will change over their tenure as a customer, what the cost to serve that customer is and will be, or figure out how much business a customer influences through referrals.

But let’s assume for a moment that you could get a handle on this variables. What exactly is SMT asking us to do when it says “Ask your current customers how much they roughly spend on your product each year, then, multiply by 20 to arrive at their CLV”? Different customers will have different CLV. Are they asking us to aggregate this amount? Average this amount? Calculate CLV by different customer segments? What exactly is SMT asking marketers to do?

3. Determine New Customer Value Via Social Media (SMV).  Social Media Today: Track conversions using Google Analytics or any other website tracking software. Google Analytics allows you to slice by social. This takes time, but it’s necessary if you want to understand your ROI from social media. Track sales, conversions, etc. and place a value on those items. For some, it might be hard-dollar sales; for others (typically B2B): the value of a contact form submission.

My take: HUH? What’s the value of a “contact form submission”? Is this average revenue or sale amount per new customer? Someone is going to have to explain this to me, because this makes no sense at all, as written.

4. Determine Impression Value (IV). Social Media Today: There is value in impressions; it’s what traditional media sell. To determine IV, add up your impressions from Twitter and Facebook, cumulative YouTube views, website traffic and any other online source. Divide that total by 100 and then multiply by an industry-appropriate CPM (cost per thousand impressions).

My take: Gag me. Using this logic, the ROI of direct mail campaigns should include a value for anyone who read the DM piece, even if they didn’t respond or buy. Impressions may be a metric worth calculating — but it isn’t a metric that can be used to calculate ROI.

5. Calculate Customer Service Value (CSV). Social Media Today: Twitter and Facebook are arguably the most efficient, cost-effective, forward-facing customer service platforms ever created. Social media can reduce customer service costs – in the form of inbound call deflections – which is a tangible value. This is a subjective one, but you need to take a crack at valuing it. For example, if you feel like Twitter provides $1,000 of customer service value a month to your business, write that in. It matters.

My take: You’ve got to be kidding me. “Social media can reduce customer service costs – in the form of inbound call deflections – which is a tangible value.” Hey Social Media Moron: A customer service-related tweet or Facebook post IS AN INBOUND customer service interaction. The problems don’t fix themselves. There may be a reduction in telco costs, but, today, in large firms, that cost savings is negligible

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Social Media Today goes on to say:

Now, let’s add up that Investment Return (IR), shall we? (Customer Value/10 (years) x Number of New Customers) + Impression Value (IV) + Customer Value Via Social (SMV) + Customer Service Value (CSV).

Social Media ROI = Investment Return (IR) – Social Media Spend (SMS) / Social Media Spend (SMS).

Et, voila!

Bottom line: This is an example of nothing more, nothing less than Social Media Malpractice. Or better yet — management consulting malpractice. Anybody who buys into this crap deserves what they get. 

Why Facebook Brand Pages Suck (And Will Continue To Do So)

The analyst firm I used to work for has a Web Site Review methodology that is grounded in — or centered on, or revolves around — a central concept: How well does a site help its users accomplish their goals?

There are actually a lot of different theories on how to evaluate a web site, but I must say I like my former firm’s approach. It’s customer-centric, and that’s hard to argue with.

I do recognize that in establishing a web site, a firm has its own goals that it wants to accomplish. The customer-centric approach to evaluating the quality of a website forces a firm to link its goals to the goals and objectives of the site’s users.

Which brings us to Facebook, and why brand pages suck, and why they’ll continue to suck, even with the new Timeline layout that FB has rolled out (for a great explanation of what marketers need to know about the new features, see this article on The Financial Brand).

The reason for Facebook brand page suckiness can be boiled down to one thing:

Facebook doesn’t adequately support the reasons why people use social media.

In a study titled Why Do People Use Social Media? Empirical Findings and a New Theoretical Framework for Social Media Goal Pursuit, Donna Hoffman and Thomas Novak from the University of California, Riverside identify seven “goal factors” including:

1. Learn — find information about interests, interact with groups that share my interests, etc.
2. Socialize — socialize with friends/family, reconnect with people I’ve lost touch with, etc.
3. Network — network for business/professional purposes, promote myself or business, etc.
4. Update status — tell people what I’m doing, find out what others are doing, etc.
5. Shop — find information about products, find good deals, etc.
6. New people — meet new people, socialize with anonymous people, etc.
7. Media fun — find and share music/videos, etc.

Having read this, I decided to look at a few Facebook brands pages (from banks and credit unions) to see if they supported these goals. I admit this wasn’t a very scientific effort, but here’s what I concluded:

1. Goal support is accidental, at best. There are certainly parts of some FIs’ Facebook pages that correspond to the goals listed above, but it seems to me to be a bit of stretch to think that any of the pages I looked at were consciously designed to support these goals, and I’d have a hard time believing that any of the FIs whose FB pages I looked at did any kind of research to understand the relative importance of the goals listed above.

2. Timeline is going to make it harder to support people’s social media goals. The restrictions that Facebook is placing on brands — e.g., limits on apps and tabs, throttling, pinning and starring limitations — will only make it harder for brand pages to systematically support user goals for using social media.

3. Facebook gives me a headache. Page layout and design in Facebook reminds me of those crappy websites from 1996 that had no rhyme or reason to the layout, used every color imaginable, employed 14 different font types, and randomly alternated between underlined, italicized, and normal text. You know, like this one:

It seems to me that Facebook is shooting itself in the foot, from a long-term perspective. Without more control and flexibility over page design, brands can’t better ensure that they’re supporting users’ goals for using social media. Without that ability, how effective, over the long term, can these pages really be?

The “800 million people use Facebook” argument that so many brands give for why they have to have a Facebook presence doesn’t hold water. Brands are fleeing from traditional mass media channels left and right. What is Facebook if not the new mass media channel?

Legacy mass media channels are criticized for their inability to support the personalization and customization capabilities that brands want. Seems to me that’s exactly the direction Facebook is heading.

The list of social media goals that Hoffman and Novak defined shouldn’t lead anyone to think that ONE social media site (or page) has to accomplish ALL of the goals. 

Yet, Facebook (understandably) operates as if it wants to be the ONE AND ONLY place for all social media interactions.

Bottom line: Brands shouldn’t fall into the trap that their social media interactions have to occur on a single platform. Different platforms could be used to support different user goals. But brands need to systematically learn what those goals are, and design accordingly.

RIP Social Media Gurus

As I near the end of the research phase of the report I’m working on regarding financial advisors’ use of social media, one thing has become very clear to me. I’ll tell you what that is in a moment.

The report will be based on a survey of more than 400 financial advisors conducted by Aite Group. We surveyed advisors about their use of technology in 2009 (including social media) and surveyed them again this year. In addition to the survey responses, I’ve talked to a number of technology vendors and consultants with expertise in supporting advisors’ use of social media.

There are three findings from the survey that stick out, one of which is not surprising: The percentage of advisors that use social media to support their practices has increased since 2009. More surprising: The percentage of advisors that have reaped benefits from social media has declined since 2009, as has the percentage that say that social media is a strong contributor to a range of key business objectives.

While the report will go into detail about the survey and what wealth management firms should do about social media, that’s not what this blog post is about. This blog post is about the moment of clarity I’ve achieved as a result of this research effort. Here it is:

Social media does not make you a good marketer. Good marketers figure out to effectively use social media.

I imagine that many of you are sitting there, thinking “DUH!”

While this may be patently obvious to you, I assure you that it’s not patently obvious to everybody.

I can’t begin to count how many firms I’ve talked to that tell me that they create “pre-approved” content for advisors to tweet, post, and blog. I’ve asked them how this content differs from the direct mail, email, and newsletter content that advisors have previously published, and I’ve been told that in many cases it’s the same content, or variations on it.

Then I ask: “Why is content that is — for the most part — ignored when it arrives through direct mail, email, or newsletter suddenly and magically engaging just because it came through Twitter, Facebook, or a blog?”

I’ve yet to hear a good answer to that question.

For the past few years, I’ve argued — mostly with myself, I think — that firms don’t need a social media strategy. That they need a marketing (better yet, business) strategy and an understanding of how social media could and should support that marketing strategy.

But many firms have (obviously) ignored that advice and have hired their social media gurus to help them develop social media strategies. For many firms, this isn’t just a waste of time and resources — it’s detrimental to their marketing efforts.

By putting an undue emphasis on social media — and without a clear understanding of how social media should and will integrate with other marketing efforts, these firms are hurting, not helping their bottom lines.

I’ve been reading the blog posts and tweets from a number of these social media gurus for at least three to four years now. Every time I challenge them with a comment on their blogs, I’m usually ignored. I imagine they figure I’m just a moron with the nerve to challenge their brilliance. (Maybe they’re right, what do I know).

Here’s my message to the social media gurus: Move over rover, and let the real marketers take over.

I’m not going to make any new friends when I explain what I mean by “real” marketers.

Marketing is a complex, multi-disciplinary function. Advertising, database marketing, pricing, promotion, PR, etc. are all disciplines within the marketing function.

But it seems to me that too many of the social media gurus out there lack experience beyond any one of these functions.  There are a few gurus I’m thinking of specifically, but no, I’m not going to name names.

Isn’t it bad enough that too many marketers can’t see beyond the walls of marketing to understand how social media — which they control in a high percentage of firms — could support and improve customer service and other business functions?

PR- and Advertising- centric social media gurus need to step aside. It’s time for marketers with a broad understanding of the various components of the marketing function to take control of the (marketing-related) social media agenda. 

There’s enough collective experience with social media out there that they don’t need to turn to consultants whose only experience with marketing is setting up a Facebook page and running a Twitter account. 

At the Social Media Breakfast event in Boston a few weeks ago, I said that folks with social media in their job title have about another year before they need to find another job within their organization. Someone tweeted that commented and added that he thought my timeframe was too aggressive. I’m sticking by my statement.

Looking narrowly, as I am for the report I’m writing on financial advisors’ use of social media, it’s become clear to me that wealth management firms that focus on helping their advisors use social media are missing the bigger picture regarding how to help their advisors become better marketers. 

More broadly, I’m convinced that many other firms in a range of industries are missing the bigger picture, as well. The challenge is how to improve marketing — not just social media marketing. There is too much emphasis and reliance being placed on social media.

Social media isn’t going to make you a better marketer. You need to first become better at marketing — and that means getting better at using a variety of channels and techniques. Of which social media is just one. 

RIP gurus. Your time is up. 

Banks’ Social Media Challenges

I had the chance to participate on a SMB Boston panel last week on Driving Business Value Through Social within Financial and Regulated Environments, which I think was just a fancy way of saying “social media in financial services.”

The main message of my presentation:

Financial institutions should integrate social media approaches into their marketing and customer service processes.

As I see it, banks (and credit unions) are wrestling with — or perhaps, simply failing to address — challenges regarding social media. And you don’t even need to be a journalist to know where these challenges came from:

  1. What: Banks don’t know what to say in social media.
  2. When: Banks don’t know when to say it.
  3. How: Banks don’t know how to say it.

There are, of course, a couple of other potential challenges, but I think that “Who to say it to” is less of a challenge, and that “Why they’re saying it” is better understood. Regarding “why”, the research that Aite Group has done on social media in banking, bears this out: Most FIs are fairly clear that engaging customers, building brand awareness, and building brand affinity are why they’re involved with social media.

Engagement may be the objective, but I’m not sure, based on what I’ve seen FIs tweet and post, that they know how to achieve that objective.

I saw one FI recently tweet:

Have a new business that needs to grow quickly? Add credit card processing to increase revenues and cash flow. #smallbiz

Here’s another from a credit union:

We are listening. We are not like the BIG Banks. Check us out!

Do people really turn to Twitter or Facebook to see shameless marketing messages, re-purposed from other marketing channels? Are these tweets effectively engaging customers/members/prospects? I don’t know. But I bet the FIs that tweeted those messages don’t know either.

Another thing that struck me reading those tweets, was thinking about why the FIs chose to tweet those messages when they did. Was some marketing person sitting around with nothing to do, and suddenly realize that ts was 30 minutes since the last tweet, so s/he might as well tweet something else? Did something trigger the need for a credit card processing tweet at that particular time? I can tell you this: The credit union’s tweet came 11 days after Bank Transfer Day, so I doubt there was some pressing need to send out that tweet when it was sent.

The tone of these tweets doesn’t sit well with me, either. How many times have you heard the phrase “join the conversation?” Look again at those tweets above — do you know anybody who talks like that in the course of a normal conversation? (If you do, I bet you don’t engage in too many conversations with that person).

This gets at a big issue that marketers (not just in financial services) have to face: They don’t know how to have (or start) a conversation with consumers. Here’s the problem:

Marketing has, to date, been driven by the need and desire to persuade consumers.

But “engagement” isn’t accomplished through persuasion. (Well, persuasion can be a part of it, but it can’t be the only part of it).

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So what should FIs do to address these challenges? There’s a tactical response and a strategic response.

The tactical response: Categorize and test.

A couple of months ago, Michael Pace from Constant Contact wrote an interesting blog post, advocating that Twitter users should periodically do a self-analysis of their tweets. Honestly, I thought that was a pretty self-indulgent thing for an individual to do. But at the company level, the idea has a lot of merit.

A high-level analysis of your company’s Twitter stream can help you understand how well you’re balancing various types of tweets. And the same could be done with Facebook posts. The challenge, of course, is understanding what impact those messages are having, and if shaking up the mix would improve the impact (i.e., engagement).

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But even if you do this, I doubt that you’ll make more than just a minor impact on your firm’s bottom line. To have a more meaningful impact, you need the strategic response:  Integrate social media approaches into marketing and customer service processes.

In my presentation at the breakfast, I highlighted three ways to do this:

1. Influence preferences. I like what America First Credit Union does on its site (as does @itsjustbrent,  since he either borrowed this example from me, or I stole it from him). The CU incorporates members’ product reviews on the product pages. By doing this, the CU accomplishes:

  • Customer advocacy. Not just in the net promoter sense of the word — but in the more important sense of the word: Doing what’s right for the customer and not just your own bottom line. Helping consumers make better choices — that are right for them — by enabling them to access other customers’ opinions is a demonstration of customer advocacy.
  • Active engagement. I guess that, if a customer follows you on Twitter and reads your tweets, or likes you on Facebook in order to enter a contest to win a prize, you could call that engagement. But I would call it passive engagement. Customers who take the time to post a review are more actively engaged, in my book.
  • Continuous market research. I doubt many firms could capture the richness of information America First is capturing through satisfaction or net promoter surveys. And I know that they can’t capture it in as timely a basis as America First does.

2. Provide collaborative support. I’ve been holding up Mint.com as an example of a firm with collaborative support, but it recently discontinued its Mint Answers page. No worries, Summit Credit Union is doing the same thing, and hopefully, they can become my poster child for this. Collaborative support is giving customers the opportunity to answer other customers’ questions. Dell has been doing it for years. Why provide collaborative support?

  • Reduced call volume. I’m not going to say that you’re going to see a huge volume of deflected calls, but over time, if you market the collaborative capability, it can help.
  • Expanded knowledge base. This is where the bigger value comes in. Customer service reps leverage internal knowledge bases to answer customer questions. Collaborative support helps grow that knowledge base, and helps figure out which answers and responses are more valuable than others. This expanded knowledge base will also prove valuable in training new employees.
  • Active engagement. Similar to the product reviews, customers who participate in collaborative support sites are demonstrating active engagement.

3. Instill financial discipline. This is about using social concepts to get people to change the way they manage their financial lives. Take a look at the research that Peter Tufano has done regarding what motivates people to save.  There are some good examples of this in practice — see Members Credit Union’s What Are You Saving For?. I recently chatted with the CEO of Bobber Interactive, and like what they’re doing about bringing social gamification to how people manage their finances.

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Bottom line: Your firm can putz around with Facebook and Twitter until you’re blue in the face. For financial institutions, this is probably not going to have much of an immediate impact on the bottom line. It will likely take years of experimentation to figure out what to say, when to say it, and how to say it on social media channels.

If you want to engage customers, you have to give them a reason to engage. Mindless, idle chatter on Twitter and Facebook isn’t sustainable.

The path to making social media an important contributor to bottom line improvement — and sooner rather than later — will come from integration social media concepts and approaches into everyday marketing and customer service processes.