The Financial Brand

Check out the article and let me know your thoughts.

From the beginning, social media seemed like a natural fit for CME Group according to Schoenberg.

“It was essentially a crossing of two bridges. I was reading a lot and using Forrester’s research and I noticed a group of traders had created a group about CME Group,” Schoenberg said. “They were already talking about us – posting thoughts and connecting with us – so I felt it was natural for us to be a part of that conversation.”

In September of 2007, Schoenberg reached out to the administrator of the group and offered to help manage the group. Instead, the administrator was willing to give Schoenberg complete control of the group, thus creating CME Group’s  footprint in the social space. From there, the footprint continued to grow as CME Group launched their Twitter account in October of 2008 – the account has over 750,000 followers. Since then, they have developed a strong presence on LinkedIn, StumbleUpon and Delicious, among other social platforms.

A key to CME Group’s success is its diverse use of the various social tools, as evident by their LinkedIn groups. The lone public group serves as a career portal for those interested in careers in futures; while they created three private groups: two focusing on products (currency exchange and interest exchange) and one solely for reporters.

“LinkedIn has really been beneficial for us for a number of reasons,” Schoenberg said. “First, we’re able to connect with professionals and get feedback from all over the world. Second, our “reporters” group allows for transparency and we can have open conversations without worrying about them being picked up and turned into a story.”

Partnerships and Conversations

In a true sign of resourcefulness and strategic thinking – coincidentally, these two traits are what prevents most major brands from succeeding in the social space – CME Group partnered with StockTwits, who had created the concept of putting a $ in front of a ticker symbol in tweets, to form a a relationship that allowed CME Group to join a large conversation that was already taking place. This strategic partnership is a prime example of how, often times, the conversation is already taking place. This concept and thinking is key for brands – instead of trying to create your  own conversation, join the one that’s already taking place.

While this remains just a small snippet of CME Group’s adventure into social media – see previous post comment to get a better understanding of the variety of social resources – it’s clear that the key to success for CME Group and Schoenberg has been a combination of providing useful information, engaging with people and a consistent message across all channels (traditional and new media).

“The nice thing for us is there’s so much information out there. So many things apply to the overall economy,” Schoenberg said. However, at the same time, we have to be sure that we continue to create original content that our community finds valuable.”

VeriFone

Initially, the card reader will be shipped to current VeriFone merchants in January, and will also sell the service directly and through third-party organizations. Independent sellers and acquirers will have their own pricing.

Two weeks ago, Twitter’s Jack Dorsey announced the launch of Square – see post below. While I was critical of Square’s approach, I see VeriFone’s entrance a bit more strategic and viable. While Dorsey has the hype and media buzz of Twitter, VeriFone has the credibility and established business. I’d take credibility and an established network over hype any day of the week. Additionally, the platform already complies with the Payment Card Industry Security Council’s Payment Security Standard – a feature that Square has yet to obtain and may ultimately be their biggest hurdle.

VeriFone will require merchants to use its Payware Mobile payment gateway, which processes transactions through First Data Corp, although it will be available through other processors. Price wise, it appears to be competitive. Existing merchant will pay a $15 monthly fee, a one-time fee to use Payware and then a per transaction fee of  17 cents.

Representatives indicated that they will begin to develop a similar platform for other mobile devices such as the Research In Motion’s BlackBerry and Google’s Android devices.

Ultimately, this serves as an immediate and viable threat to Square. I’ve said before that the biggest hurdle in the mobile payment space is the adoption process amongst consumers. It is my belief that in order to make significant progress in mobile payments, you need to have the resources, and more importantly, brand name of a large financial organization – or at least partner with one. This move by VeriFone is a wake-up call for large financial institutions and service companies, as the space finally has a credible player.

What this indicates is that financial brands need to start investing more time and effort into the social space. No longer can a brand afford to simple monitor conversation. It’s time that brands begin to show tangible results in addressing customer issues, managing brand reputation and spreading its mission statement. This article is a loud shout to executives that think it’s too much work, doesn’t provide results, or any other excuse they’re making for not getting into social.

Thus far, most of the action online has come from smaller banks and credit unions, so it’s a nice change of pace to see a large brand like Bank of America to step up. This move speaks volumes to other financial institutions who are either hesitant or question the value of investing in the social space in areas other than monitoring conversations and brand reputation.