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.

New Business Idea: Custom Twitter Avatars

I told a friend (@chaztoo, if you must know) that I thought he should start a business creating custom Twitter avatars. I know that there are online services like FaceYourManga, but those don’t produce anything of really high quality, nor are they very unique. 

@chaztoo is a great artist. Take a look at this picture he posted on his Tumblr:

Wouldn’t you pay something to have him create a custom Twitter avatar for you?

Or maybe, would you pay to have him to do this as a gift for someone else?

Maybe your company, who’s trying to create/support your brand using Twitter, could benefit by having custom avatars — that had a graphic element consistent in each of the avatars — for the people most active on the channel?

Favor, please: Leave a comment letting me know what you think of this idea. Your input will probably determine if @chaztoo does this or not. 

Breaking The News On Twitter

I honestly and truly wonder what it is that motivates many of you to be the 7,657,423,012th person to tweet a news item.

Do you really think that you’re the first to tell your friends and social network that Steve Jobs resigned? Or that Google acquired a Motorola division?

Do you not scan at least a few tweets in your Twitter stream to see if anybody else tweeted the “breaking” news you’re itching to share with the world?

Does being redundant and useless not bother you?

It would be one thing if you were linking to a source that maybe not everybody read (I linked to Josh Bernoff’s blog post, so maybe I’m guilty as charged as well). But when you link to a HuffPo or TechCrunch article, you’re providing a link to the same story that 7,173,147,882 people before you did.

I have a theory that addresses the wonder I expressed above: Attention-deficit disorder.

No, not like the medical community defines it. Not “the co-existence of attentional problems and hyperactivity.”

No, I mean attention-deficit as in: Doesn’t get enough attention, and needs to call attention to oneself.

If you’ve got other theories explaining this behavior, let me know. I really do want to hear them. Because I honestly believe that if I better understand this behavior, maybe it won’t drive me as crazy as it does.

Quantipulation

A guy named John Wanamaker is famous for something he said 100 years ago. He said:

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Unfortunately, he’s wrong. I mean, if he didn’t know which half was wasted, how did he know it was half and not three-quarters or one-quarter of it?

He’s also wrong because it’s conceivable that 100% of his advertising dollars were wasted.

A century ago there were no ad ratings or measurement services. So how he could possibly know if ANY of his advertising spend was effective? It’s quite possible that any increase he saw in sales was due to exogenous factors like the weather, the economy, the competition raising prices or going out of business, or word of mouth among customers.

Ah, but hold on here a second. I guess it’s possible that 100% of his advertising spend was effective – or at least, not wasted – depending on what measure of success you use. If you don’t believe me, ask DeBeers.

Is it likely that the advertising he did had absolutely NO effect at all? Probably not. Just because someone didn’t make a bee line for the department store after seeing an ad, doesn’t mean the ad had no effect and should be considered wasted dollars. Some might have seen the ad and learned about the store, or the ad might have left others with a positive impression of the store.

Wanamaker thought half his advertising spend was wasted because he had no way to measure its effectiveness and didn’t even know what to measure.

Today’s advertisers have some measurement tools and services available to them, but none can claim to be totally accurate. And marketers are dreaming up new metrics every day, so you can be sure that no one measure is perfect, nor can we safely assume that even a group of commonly used metrics can truly give us a reliable picture of the effectiveness of advertising.

Bottom line: Any claim on what percentage of your advertising is wasted and what isn’t is just a random guess. We simply don’t know – and can’t know.

Here’s another claim to consider: Have you heard that its costs five times more to acquire a customer than to keep or retain one? How did they figure that? You could double the number of insurance, credit card, or mortgage customers you have by simply tweaking your underwriting guidelines, risk guidelines, or interest rates. No big cost associated with that.

But to retain those customers, you have to incur some big costs to keep branches open, provide call center support, and deliver service in an ever-growing number of channels. Many of the costs you incur to keep the business running are costs that help keep your customers  satisfied – and, hence, keeping them as customers. There’s simply no way the cost of acquisition is five times greater than the cost of retention.

But, wait, that’s not right either. Because all those costs you incur to retain your customers help to make your company the great company that it is. It’s what you’ve built your reputation upon. And without that reputation you couldn’t retain OR attract customers.

Bottom line: There’s simply no way to accurately calculate the cost of acquisition or retention. It involves making too many judgments and decisions on which activities contribute to acquisition and retention. It can’t be done.

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These claims – that half of advertising is wasted, or that acquisition costs are five times greater than retention costs – are examples of what I call Quantipulation:

The art and act of using unverifiable math and statistics to convince people of what you believe to be true.

The examples I just gave are just two examples of this widespread practice. In fact, the incidence of quantipulation has grown by 1273% compounded annually since 2003. And I have the math to prove it:

What’s driving this growth in quantipulative activity?

The false legitimacy that quantipulation provides gives quantipulators confirmation that the things they WANT to believe are really true.

In addition, there are many people who want to lay claim to having the secret sauce for marketing success, and sadly, many people who want that special sauce. Quantipulation provides the “scientific” proof that their sauce tastes best.

There are at a lot different flavors of this special sauce that people quantipulate about, especially about customer loyalty, influence, performance metrics and ROI.

I’ll be discussing those things in more detail during the conference. Hope you’ll be there.

Oh, and in the mean time, if I catch you doing anything quantipulative, I’ll be sure to call you out on it. 

Blinding Me With Science

Conventional wisdom holds that “if you can’t measure it, you can’t manage it,” so we have metrics to help us manage our businesses.

And then there are Twitter-related metrics.

Meeyoung Cha from the Max Planck Institute for Software Systems looked at data from all 52 million Twitter accounts and determined that:

“The number of followers a Tweeter has is largely meaningless. Popular users who have a high number of followers are not necessarily influential in terms of spawning retweets or mentions,” she said. The more interesting question is how should one measure influence, she continues. Unfortunately there is no one easy answer to that, she says. “One would have to take a combination of many metrics, including follower count, mentions, and re-tweets. However the hard part is figuring out the relative importance of the component metrics.”

Cha is spot on that follower count isn’t important. But she’s wrong when she says that the hard part of measuring influence is “figuring out the relative importance of the component metrics.”

The hard part is figuring out what influence is. When you figure that out, then you can start arguing about how to measure it.

Social media analytics firm Sysomos conveniently avoids defining what influence is, and has developed a metric it calls the authority ranking: A score between 0 to 10 – with 10 signifying someone with very high reach and influence.

Social media “heavyweights” Chris Brogan and Jeremiah Owyang have an average follower authority (an “AFA” if you want to sound cool) of 4.0 while Jason Falls’ AFA is 4.8, and Scott Stratten’s is 4.6.

I guess we’re to conclude that Jason and Scott are more influential than Chris and Jeremiah.

If they want to raise their AFA, Chris and Jeremiah can cull through their list of followers (139k for Chris, 65k for Jeremiah) and block those with a low AFA. And then, going forward, only allow people with a high AFA to follow them.  I can’t think of a bigger waste of time, or stupider thing to do.

I could be off-base here, but to me, influence is about shaping how people think and/or act, wouldn’t you agree?

If you do, then how in the world can you measure influence simply by looking at follower count or follower’s follower count, retweeting activity, or mentions? What does any of that have to with influence?

Answer: NOTHING. Those “metrics” have nothing to do with influence.

I can’t tell you how many times I’ve DMed someone who has tweeted a link and asked “You believe that load of crap?” only to receive the reply “oh, I don’t believe it — I was just passing on the link.” If they don’t believe it, then they really weren’t influenced, were they? Nor are they being influential, because, apparently, they’re not trying to shape anyone’s thoughts or behaviors.

Most of these Twitter metrics are just pseudo-scientific stabs at establishing a system for score-keeping.

Don’t get me wrong: I’m not suggesting that you stop bragging about your follower count, influence ranking, or AFA score. Anything that helps you deal with your personal insecurities is OK in my book. But don’t try to blind me with your science. It’s not working.

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The Best Time To Tweet

Do you hold back from tweeting a tweet because you’re afraid it’s the “wrong time” — worried that not enough of your followers will see your tweet?

If you do, you might be interested in an article on MarketingVox titled When Is The Best Time To Tweet? The article pulls together some recommendations for the optimal time to tweet from sources like Social Media Guide and Guy Kawasaki. Here are my reactions to some of the recommendations:

  • The Social Media Guide recommends tweeting at 9AM PT because you hit the west coast as they’re getting in to work, the east coast as they’re taking a lunch break, and England at the end of their day. My take: Won’t work. Everybody knows folks on the west coast don’t get into work until 10AM PT (if at all) and the Brits have bolted by 4:30 in the afternoon.
  • SM Guide also suggests using Tweet O’Clock to determine the best time to tweet a particular individual. My take: If you want a particular person to see your tweet, put their Twitter ID in the tweet, or — better yet — DM them. Duh.
  • Guy Kawasaki says don’t worry about tweeting too many times — send important tweets at least four times at 8 to 12 hour intervals. My take: If you don’t mind being nicknamed “Spammy Sammy”, then, by all means, follow Kawasaki’s advice.
  • Predictive Marketing concluded that “each business has a unique set of followers with their own Twitter ‘time fingerprint’.” PM went on to recommend that marketers should “track [their] followers to see when they are most active.” My take: If you’re an individual with 100 followers, maybe this advice is feasible. But for a business with 10,000+ followers, doing this is practically impossible, but more importantly — it’s a complete waste of time, effort and resources.

Personally, I can only conclude that the best time to tweet is……right now.

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Twitter Rules For Newbies

A colleague of mine is new to Twitter, and sent me an email saying “I have no idea what I’m doing with this thing.” I figured I’d respond to him with this blog post, instead of replying to him directly.

Welcome to Twitter, buddy. Thanks for asking for my advice. Here are my suggestions for what you should do:

1. Share ideas, not activities. I couldn’t care less that you’re on a call with a client, at the airport, stuck in traffic, or (especially) eating breakfast. Maybe your wife cares that you’re doing those things (but I doubt it). People want to know what’s in your head, not in your mouth.

2. Talk to Twitter as if you were talking to a person. The biggest losers in Twitterville (geez, I didn’t just say “Twitterville”, did I?) are the people who tweet company marketing messages. What’s really sad is that, often, these are the same people who preach that “marketing has to change”. Yet they broadcast their marketing messages as if this were some traditional media. Think of a tweet as a conversation starter. Think of sharing some thought on Twitter as you would a Skype message to me. (But keep it clean, and don’t bitch about other people. Not that you would ever do that on Skype).

3. Share links — judiciously. I’ve got a Twitter buddy who’s an email exec (not you JC) who tweets every damn social media link he sees. Not only is it a good bet that 25 other people have already tweeted that link, it really doesn’t enhance his personal brand (oh geez, I didn’t say that, too, did I?). I try to share links that meet two criteria: 1) stuff about marketing/financial services that I don’t think everybody has already seen or are likely to see, and 2) stuff I think is really funny (and that I think other people aren’t likely to see).

4. A link to a new blog post. Please note that I said “a link”. This is your call. When I publish a new blog post, I tweet the link once, and only once. I hope and pray that other people will RT my tweet and/or tweet the link. I know of people that tweet links to a blog post multiple times throughout the day, and over multiple days. I couldn’t tell you where the spam line is.

5. Respond to what other people are tweeting. It’s called conversation. Trust me on this one: People will appreciate the fact that someone is actually listening to what they’re tweeting. It’s mind boggling how many people use Twitter to broadcast their messages, and don’t engage in conversation. That’s their call, they can use the tool as they please. Just sayin’  that I think you miss a big opportunity to engage people if that’s what you do. The big decision you’ll have to make here is whether or not to reply with the @ sign (a public tweet) or DM them (direct message). Here’s my rule of thumb: If I don’t want, or think it’s necessary for, anybody to reply to my reply, then I DM the person. Not every tweet has to go out to everyone.

6. Do NOT live tweet conferences. If Bartlett were around today, his book of quotations would run 20,000 pages. At least that’s my conclusion judging from the fact that so many Twitterers that attend conferences seem to think that every damn comment made by every damn speaker is worth tweeting.

7. Follow only the people who abide by the previous rules. Every two weeks or so, I scroll down my TweetDeck window, pick out the people who aren’t following the rules, and unfollow them. I realize it probably offends them. But I know you well enough, my friend, to know that you won’t lose any sleep over this one.

So, thanks again for asking for my advice. I hope this helps. I’ll leave you with my Twitter mantra, with the hope that you will make it your mantra: Add Value to the Conversation.

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Ten Cents A Tweet

I was talking with a buddy of mine, who apologized for not being very active on Twitter over the past few weeks.

The reason for his inactivity? Get this: He’s been busy.

I nearly fell off my exercise ball. I mean, really, what kind of excuse is that for not tweeting? How in the world can my friend build his personal brand if he’s not tweeting 50 to 100 times a day (on weekdays, that is, and 10 to 20 times on Saturdays and Sundays)?

Apparently, it turns out that my friend has a somewhat unique and novel strategy for building his personal brand. He intends to do it by….drumroll, please….by getting bottom-line results for his clients.

Well, good luck to him. That clearly isn’t going to work for the rest of us, is it? No way.

But building a personal brand through Twitter is no piece of cake. What to tweet? What to say that comes off as smart, witty, and contributing to the “conversation”? This is challenging for a lot of folks looking to build their personal brand.

That’s why I’m excited to announce that I can help.

Drawing on my deep marketing experience, top-notch writing skills, and world-class wit, I will tweet for you. All while you’re working on your real job.

And all for ten cents a tweet.

Here’s how it’s going to work: I will tweet 10 to 50 times per weekday in your name.  These tweets will be insightful, informative, and sometimes funny. We’ll have a preliminary discussion to define exactly what you want your personal brand to be.

You’ll be building your personal brand for as little as $1 per day. What a bargain.

In no time, you will have tens — if not hundreds — of thousands of followers anxiously awaiting your every tweet.

With just 1000 clients, I will be making a fortune (mostly because I will require a two-year contract, and will be collecting my fees in advance).

How much money will you make from this arrangement?

I have no idea, and quite frankly, I’m surprised that you’re even asking that question. After all, since having tens — or thousands — of followers seems to be so important to you,  I would have guessed that you figured out that part of the equation already.

Anyway, I’m here to help — all for ten cents a tweet. Call me. Oops, I mean tweet me.

The Most Important Decision A Marketer Can Make

If you’ve checked your email inbox recently, then you know that you have a really important decision to make. After all, we marketers don’t have unlimited budgets and resources, do we? Nope. So you’re going to have to decide. Do you invest in:

  1. Viagra.
  2. Enhancing the size of your, um, asset[s].
  3. Boosting your Twitter follower count.

[Oddly,  I think there’s an underlying connection between all three options, but let’s not go there. For now.]

This decision just become even harder to make.

According to Advertising Age, uSocial — which will get you 1,000 Twitter followers for just $87 — is now offering to hook you up with 5,000 Facebook “friends” for $654 (7.6 cents/friend), or up to 10,000 Facebook “fans” for $1,167 (8.5 cents/fan). Apparently, this is a really good deal because, according to uSocial,  “since each Facebook friend or fan is worth $1 per month, buyers will make back their investment many times over in the first month.”

I’m sure that uSocial can back up this claim, unlike the folks who ran the Enzyte male enhancement commercials, who admitted that — gasp! — “the company made up much of the content that appeared in Enzyte ads.”

But it’s not the [potentially] bogus claim that bothers me. Because let’s face it: These offers wouldn’t exist if demand for them didn’t exist.

Here’s why this bugs me: Joe Pine and James Gilmore wrote a great book back in 2007 called Authenticity: What Consumers Really Want. Time magazine even said in 2008 that authenticity was one of the 10 ideas changing the world.

What kind of marketer pays for followers or fans to boost their follower or fan count? Not an authentic marketer, that’s for sure. I mean, how “authentic” could you possibly be if you’re willing to cut corners and buy followers and fans?

One of my favorite examples of this lack of authenticity is Washington Mutual (Wamu). A few years back, Wamu beat its chest in press releases that within 48 hours of launching a Facebook page that it had a couple of hundred followers (or fans or friends, whatever, I don’t know what you call them).

At the time, I snooped around and found that at least three-quarters of those followers were affiliated in one way or another with the ad agency that did the design work for the bank’s Facebook page. The irony is that not only were these fans not worth $1 per month each to the bank, but in essence, as a vendor to the bank, they cost the bank money.

So, dear marketers, you have an important decision to make. What will I do? I’m not sure, but I’m pretty sure that I’ve ruled out option #3.