Listening

The true value with social comes when a brand listens. If you aren’t online, how do you know what your customers are saying about you? How do you know the sentiment behind the conversations that your customers and potential customers are having if you aren’t actively engaged with social? A few weeks ago, I noticed a tweet from one of my followers that expressed his frustration with a previous employer of mine. Knowing that my previous employer wasn’t active on Twitter, I witnessed a simple issue/concern go unsolved. I eventually reached out to my follower and gave him some recommendations, but this was a massively missed opportunity.

Furthermore, I had been monitoring conversation around my previous employer and a simple hashtag search pulled up countless tweets – everything from simple questions to negative comments – that were unattended and getting no response. And this was only on one platform. If it’s happening on one, it’s probably happening on others.

In regards to the article I mentioned in the beginning, if you aren’t on social platforms and monitoring conversation around your brand, you might be missing important information about mobile banking, remote deposits, branch concerns. Maybe you create a discussion on Facebook asking your customers their thoughts on your website, maybe you ask about their interest in remote deposit. But again, without being online, you’ll never know.

Building Community

Maybe Facebook or Twitter aren’t for your bank or credit union, but social media is much more than those two platforms. What about blogging or video? Last time I looked, general sentiment around the financial sector wasn’t exactly positive. One of the biggest opportunities within the social space is education. Look at what Wells Fargo is doing with their blogs, and more importantly, look at what how they took to blogging during the Wachovia integration. By blogging, not only is Wells providing valuable information about their brand, but they are also providing human interaction to their customers. They’re focused on building their community.

We’re all aware of the state of the economy. Regardless of your position and thoughts on the recovery, a systematic change must occur for us to fully come out of the recession. Finance is an area that a lot of people don’t understand and aren’t interested in learning. The opportunity is ripe for financial institutions to focus on educating their customers. This education isn’t going to happen inside a branch, it’s going to happen online.

The Issue

The biggest reason social media either isn’t working or isn’t being implemented? An overall lack of understanding within financial institutions. Banks and credit unions are still stuck in the past where they are focused on fee income and selling. Most aren’t interested in getting to know their customers. A bank’s idea of ‘relationship’ is how many products a certain customer has. Until financial institutions get away from the cross-selling mentality and begin to focus on human interaction, social will never work.

As we stand now, executives and product managers are stuck in the old business model where brands would focus on the push and bringing customers into physical branch. This model is no longer viable. The new branch banking model? It’s online and it’s mobile. Yes, last time I checked profits came from selling. Yes, last time I checked, the ultimate goal with social should be to increase sales and profit. But the path and means to consumer’s dollars…that’s a path that hasn’t been mowed and it’s not paved.

The Solution

It’s simple. Take off the tie, put the tri-fold brochures away and spare us the sales pitch. Start focusing on building a platform that integrates social with your entire business strategy. Remember, social isn’t mean to be a replacement tool, it’s complimentary. It doesn’t stand alone, it’s a part of your entire business culture.

If you show interest in me, I’ll listen. If you provide value, I’ll buy. If you’re honest, I’ll be loyal. If you show that you truly care about me, I’ll promote the hell out your brand.

Don’t be afraid of social within the financial space. Quit making excuses of why you aren’t involved. If you are active, take a step back and rethink if you’re efforts truly hit on what social really is. Whatever your situation is, social NEEDS to be an important part of your bank’s or credit union’s overall brand.

Here are a few things I believe we’ll see in 2010, with regards to the financial sector.

1. It’ll no longer be a fear of regulation that prevents involvement

   For the most part, a lot of the action in the social scene has been from smaller banks, credit unions and financial service organizations. Outside of American Express and Bank of America (plus a few other Fortune 500 brands), most larger institutions of have been hesitant to get involved with social media. Primarily, the excuse has been a fear of regulation.  In 2010, I believe more financial institutions will let go of regulation as an excuse, and instead, shift toward safety/privacy and a lack of understanding.

2. A large financial organization will face a major security issue

   With more people trending toward mobile banking and financial institutions finally adopting social, I believe we’ll see a financial institution face a breach of security – through mobile banking, online banking or social media. It’ll be this fear that truly thwarts further acceptance and adoption of interactive finance.

3. Payment solutions will continue to trend, yet there will be little advancement

   I’ve shared my thoughts on the mobile payment space already this year – essentially, the U.S. isn’t ready for it yet. We saw Square enter the space, followed by Verifone; however, I don’t think we’ll see much advancement. We’re still slowly shifting toward a larger portion of the population using smartphones, but I believe we’re at least 2-3 years out.

4. Financial education will lead the interactive charge. It won’t be led by a bank
   

   Outside of customer service, education will be the primary use of social within the financial sector. As the economy continues to slowly recover, institutions will realize the opportunity to educate its consumers. The education will be a broad spectrum and it’ll be led by a non-bank – most likely American Express’ OPEN forum or an insurance/investment brand. Banks will continue to use the space for customer service and will continue to avoid customers best interest.

 Increase use of video and increased collaboration


What we’re seeing with American Express’ OPEN forum will continue to thrive. Rather than a direct focus on its own brand, organizations will seek to collaborate with businesses, contributors and spaces outside the traditional financial space. With this collaboration, we’ll trend toward more video use. Large banks will, for the most part, fail with this space. As a result, it’ll be smaller financial institutions, investor relations and financial service brands that benefit.

5. Brand seek to increase conversation with consumers

   In an effort to form a stronger relationship with consumers, brands will seek to increase conversation. The primary outlet for this will be blogs. However, despite the positive adoption of blogging, we won’t see CEOs being a part of the conversation. I don’t think this will hinder the relationship building, but eventually, CEOs and other “powers that be” will need to put themselves out there. In the beginning, we’ll see blogging become a voice for complaints and a place for consumers to voice their dissatisfaction. The key will be for brands to successfully shift toward the benefits of blogging and use their voice to turn those negatives into positives.

As you can tell, for the most part, I’m bearish about the overall use of the interactive space within the financial sector. That being said, I believe those who are doing it well and have an understanding will continue to see great results. I believe we’ll see a few new brands emerge within the social space, but I don’t think the gap of those involved vs. those not involved will shrink.

Overall, I’m very excited about the opportunities the interactive space will provide brands. Technology and innovation will continue to be a major focus for brands; lets hope the results continue to be positive.

SmartyPig is essentially a Web 2.0 financial services company – it brings saving money to the interactive online space. The impressive thing about SmartyPig is the fact that the foundation isn’t new or groundbreaking – the ability to save money has been around since commerce was created; yet the concept to achieve the desired result is.

“If we share pictures and ideas, why not share information about savings and finances,” Gaskell said. “In the end, it’s a lot easier to achieve a goal when you have a community. That’s what SmartyPig does, it allows you to build a community around your finances.”

For a company that started as a simple idea three years ago, SmartyPig has grown into a company that boasts $500 million in deposits, strategic relationships with nearly every major retailer in the world, and from a social standpoint – 4,500 Twitter followers & 2,000 Facebook fans. And all of this with $0 spent on advertising

“We’ve grown based solely on being a social company. Our service allows for customer-to-customer interaction,” Gaskell said. “The idea of savings has gone from being foreign to something that’s being considered. As a result, our best ideas are coming from our customers. It’s a no-brainer that if your customers are talking, you should be listening.”

As the social space continues to grow and evolve, SmartyPig is well-positioned to reap the benefits of the increased convergence toward a social and interactive lifestyle. Recently, they announced the ability to link Twitter and Facebook accounts to your SmartyPig account so they automatically send an update whenever you contribute money to your savings goals. Additionally, the addition of Bob Weinschenk, a Silicon Valley veteran, as CEO provides key leadership and proven experience.

“We feel we’re just getting started. We hope to be in a lot of places in 24 months,” Gaskell said. “Nothing can slow us down if we stay focused and continue to innovate in the social/financial space. Our perspective bank partners’ ability to pull the trigger so we can begin to build SmartyPig in a global sense does provide a certain set of understandable challenges, as there are many chains of command. But we feel confident we can be up and running in any language and currency inside of 90 days.”

In the first part of this series, iFinance had the opportunity to sit down with Chuck Hemann, manager of research and online reputation at Dix & Eaton. While a lot of focus for Hemann has been in the B2B space, there tends to be some similarities across the broad spectrum of IR – most notably, the fact that the majority of companies lack compelling content inside their IR space.

“Overall, from an IR standpoint, most company sites are poorly done. They’re mostly basic – not sharing technology, not interactive, no video,” Hemann said. “Cisco and Sun Microsystems are two that stand out in terms of having a real understanding of making their IR sites interactive. But they are definitely the exception to the rule. We’re starting to see more conversations, but we’re a ways away from adoption.”

While social media and investor relations seem like a natural partnership, we’re a long way from using social media as a primary disclosure tool. Outside of eBay and Dell, Hemann doesn’t see many companies jumping into the social space when it comes to earnings. Instead, he and his team are focusing on using social media as a marketing tool for IR.

“We have a natural inclination to be social, but we’re a long way from seeing companies tweeting earnings,” Hemann said. “Most are just now coming out of the cave. IR is light years behind when it comes to being social, so you really have to think outside the traditional frame of mind. There are a lot of ways businesses can use social media to reach current and potential investors/shareholders.”

Here are three key takeaways from our discussion with Hemann:

• Make it a complimentary tool.
• Give access. Make the reader feel like they’re getting more [info].
• Engage more than 1 quarter. Make your IR site active all the time, not just during earnings.

What it boils down to, is for companies to utilize social media as additional tool. While a lot of focus around IR and social media tends to focus on earnings and finding additional ways to distribute financial information, there’s a lot of other opportunities for IR to become interactive. Our economy is run by small businesses, and social media can be the deciding factor when it comes to reaching potential investors and ensuring the public is well-informed about your businesses’ vitality. We may not be there yet, but we’re definitely on the right path.

For more information, visit Hemann’s blog, Measurement PR-spectives

Nicolet National Bank, based in Green Bay, Wisconsin and with around $694 million in assets, opened in 2000 and has quickly become a prime example of how transparency and bringing a personal touch to the banking industry can overcome not having large marketing budget. While sitting in a meeting in which the CEO explained a complex financial issue in a matter of minutes, Jeff Gahnz, Vice President of Marketing and Communications, came up with the idea of The Vault.

“The people in the community wanted to know what was going on,” Gahnz said. “All they were hearing was what the mainstream media was saying. But how did this affect them and how did it affect the community? That’s what they wanted to know. If Bob [Robert Altman, Chairman and CEO] was able to explain it to me in 5 minutes, then it made sense to find a tool to relay this information to the public.”

Two of the biggest hurdles when it comes to social media within the banking industry are 1) getting the approval of the C-suite and 2) legal issues. For Gahnz, neither of those posed a problem. In fact, it was quite the opposite.

“When you tie social media into the overall communications plan, it becomes an extremely easy conversation to have,” Gahnz said. “Additionally, I don’t have the legal or corporate ladder to run things up. Our CEO picks up his own phone and answers his own e-mails. He understands what it takes to be community-driven and customer-focused. And it’s helped tremendously.”

A few key features of The Vault

• Audio Podcasts
• Video Podcasts
• CEO & President Blog
• Financial Topics Blog

While transparency and an open-door policy remain strengths for Nicolet, the biggest hurdle according to Gahnz is maintaining the efforts and continuing the social impact it’s create thus far.

“The biggest problem we have is the fact that we have so much content,” Gahnz said. “I need to do a better job really focusing our efforts and ensuring the we have some consistency. Half the battle is simply getting content up in a timely matter and that’s where my focus is right now.”

Looking ahead, Nicolet is looking to turn The Vault into a central place that the community can come. Currently, they’re providing information around the financial industry, but they’d like to evolve into a communal space where you can get information about a variety of topics. One project in place is Voice – a portal that’s exactly what it’s name indicates, a place where people can come to have their Voice heard.

“We’re partnering with local businesses and professionals to turn The Vault into a well-rounded space. We’re partnering with experts in various fields such as healthcare and having CEO’s and local business owners blog about their respective industry,” Gahnz said. “We’re truly interested in the interaction. We want our community to help us create a better bank.”

What the future holds for Nicolet National Bank literally lies in the hands of their community as they’re putting their organization into the hands of their customers. A lot of businesses preach being transparent and customer-focused, but Nicolet is a great example of a financial institution that’s practicing what they preach. They realize that they’re relatively new to the social space, they’re learning as they go. And they’re bringing along anyone and everyone who wants a ride. When you wipe away all the glitz and get to the surface, the one key ingredient to Nicolet National Bank is they have a strategy for their social efforts and they tie it to their overall communications plan.

“We’re realistic, we know we can’t go toe-to-toe with the bigger banks. They can spend in two weeks what we spend all year,” Gahnz said. “Our overall investment in social media is around what the bigger institutions spend on traditional media in a 2-month period. While they continue to fight the battle of whether or not to get involved, social media allows a bank our size to play offense.”