Published: February 19, 2014 | Comments
In 2014 Facebook will celebrate its 10th anniversary – meaning it has lasted twice as long as the average Fortune 500 CEO. Social media is no longer just the domain of university students and the tech savvy residents of Silicon Valley. 500 million Tweets are posted daily, and 82 percent of Fortune Global 100 companies have at least one active account. What is less clear to many is how companies should use social media to better meet their customers’ expectations.
Accenture’s research into customer loyalty within the retail banking sector in the UK and Ireland shone a light on how people feel about social media in financial services. Only 10 percent of survey respondents were willing to interact with their banks via social media and 71 percent were firmly against the idea. If we view social media as a conversation between two friends on where to go on holiday, it seems that while they may welcome an interruption from a travel company with a personalised holiday recommendation, or a pharmacy chain with a discount on sun cream, what they don’t want is an overdraft reminder from their bank.
Financial services companies seem to agree. According to data from Cicero, 59% of bank execs surveyed in 2012 claimed they spent less than £50k annually on social media, while 29% spent nothing at all.
However, this lack of investment by financial services companies coupled with the lack of desire for interaction from consumers should not be interpreted to mean that there is no role here for customer service. In fact, there are multiple ways in which social can help retail banks engage effectively with their customers.
Learning to Listen: Through social media the voice of the customer is amplified. Consumers have the ability to broadcast their message way beyond their traditional network. Research is indicating that whilst smiling is contagious, bad news spreads, with anger spreading further and faster than more positive messages.
As a result, companies across all industries are learning that listening skills are critical. There are many new tools in the marketplace that can be used to start tracking and listening to social media chatter. This can provide a valuable insight into consumer sentiment. What are your customers saying and what do they actually want?
Responding Rapidly: The act of listening can also have more immediate operational benefits. Within the UK, a retail bank has begun to use social media to identify issues with their ATM (cashpoint) network. By leveraging customers’ Tweets and photos they are able to more quickly pinpoint and repair out of service machines. In the same way, social media can form part of banks’ early warning systems for fraud or phishing scams.
Building Brands: Companies need to be where their customers are. When reality queen Kim Kardashian and her husband Kanye West gave birth to their first son, North, NatWest were amongst the first to congratulate them with a tongue in cheek Tweet. Not many banking messages are retweeted nearly 4,000 times.
Inspiring Innovation: Customers are best placed to let you know what they want. Active social media monitoring formed a core component of a recent mobile banking application launch. Two million people downloaded the app, yet despite this early indicator of success the bank was not afraid to make changes following the initial launch. Having listened to the sentiments – both positive and negative – being expressed on social media, they modified the product to meet an unanticipated customer demographic and built new apps to accommodate unexpectedly popular features. Customer feedback was driving where the innovation would go next.
Social media has given customers a voice, and they are embracing this opportunity to interact directly with brands and share their experiences with others. If retail banks want to understand their customers and start to rebuild trust, they need to ensure that they are using social media to listen, engage and innovate to improve the customer experience. Those that take advantage of this opportunity today will reap the rewards of enhanced customer loyalty in the long term.