Are You Part of the Conversation?

Your financial institution may be the heart of its community, but once the conversation goes online, does your bank follow?

The Financial Brand published a piece earlier this week on the 5 LinkedIn Myths Bankers Need to Shake, detailing research from consulting firm St. Meyer & Hubbard and marketing technology firm kadince.com that found that more than half of banks forbid their bankers to craft relationships through LinkedIn.

This is just the latest study that highlights the problematic relationship between banks and social media. A year ago, Bank Director, in its 2013 Bank Board & Executive Survey, found that less than half of banks engage with customers through Facebook or Twitter.

Yes, there are risks in social media engagement, so your bank does need a plan. Your bank might not be on social media, but your customers are. Social media monitoring service mention says that the average company is mentioned 39 times a day and almost 300 times a week. Of these, few talk directly to the company — meaning that they won’t be talking to your bank, but they will be talking ABOUT your bank.

And in a today’s competitive environment, you might want to pay attention to the social media conversations that consumers are having about other banks in your market. According to Forbes, Verizon and AT&T are monitoring complaints about competitors like T-Mobile so they can reach out to these unhappy customers and offer their own services. Media Bistro examines this further, saying:

If you’re not using Twitter to listen to customers, you’re missing out on one of its most significant benefits. Since Twitter is an open network, you have the opportunity to use tools and search to discover what anyone is saying about any topic, in real time.

Verizon is focusing its efforts on those users that are seen as “influencers” – Twitter users that have a lot of followers. Who are the influencers in your community, and where are they? If they’re not on Twitter, they’re likely on LinkedIn, a social network built entirely around business leaders. Don’t you want to be where your customers are? Because it’s likely that your competitors will be.

LOFTy Expectations

I’m a big fan of LOFT, the lower-cost little sister to the slightly more upscale Ann Taylor, but their most recent sale probably lost me as an online customer.

LOFT ran a big sale Sunday that offered a 70 percent discount off sale items. Who doesn’t love a good deal? The sale expired at midnight, so I started to browse late Sunday evening on my iPhone. Unfortunately, I couldn’t get past browsing–the website constantly crashed. This isn’t the first time that LOFT’s website couldn’t handle extra traffic during a big sale.

LOFT’s response to my concerns voiced on social media Sunday night came on Monday morning–hours after the end of the sale–and instead of addressing the issue through that medium, they directed me to call an associate. Around the same time, I received a tone-deaf email advertising a 60% off flash sale email.

I should note that the social media team at LOFT seems to be responsive to customers on its Facebook page. It’s true that I was disappointed that, instead of addressing the problem through social media, LOFT directed me to contact them by phone–an extra step that I didn’t want to take–but their team is just doing their job.

The real problem lies in the fact that marketing, product delivery and customer service aren’t strategically aligned.

Where Do You Draw the Line on Data?

Is a national conversation brewing about how companies use consumer data?

In case you missed it, on June 17 the Proceedings of the National Academy of Sciences (PNAS) published the results of a January 2012 experiment, in which Facebook Data Scientist Adam Kramer, along with Jamie Guillory of the University of California, San Francisco, and Jeff Hancock, of Cornell University, manipulated Facebook’s news feed to provide some users with content that was emotionally positive or emotionally negative to see if this resulted in a correlating reaction by the user. Kramer, in a Facebook post, clarified the research, saying, “we care about the emotional impact of Facebook and the people that use our product.”

Facebook Founder and CEO Mark Zuckerberg has so far been silent on the matter, but today the Wall Street Journal reported that COO Sheryl Sandberg said:

This was part of ongoing research companies do to test different products, and that was what it was; it was poorly communicated.”

“And for that communication we apologize. We never meant to upset you.

The apology is a bit “I’m sorry if I offended you”, but if my own Facebook feed is any indicator, the social media giant will be OK. At any given moment you can read the results of my friends’ latest BuzzFeed quiz on their spirit animal or where they should go on a time machine. (Guess what? BuzzFeed is using your data too.)

I don’t know if it’s indicative of my generation–I’m firmly in the middle ground between Gen X and Gen Y–but I typically don’t get bent out of shape about how my data is used. Data is a part of my daily life, and I know the old Economics 101 credo–“There’s no such thing as a free lunch”. Facebook has to benefit from its user base. And data is really, really valuable.

But Facebook wasn’t transparent about how the data was used.

Wanna Reach the Unbanked?

Last week two very interesting items crossed my eye: this look at content marketing for financial services, and CNN Money’s map of the unbanked.

“Insights from the Content Marketing World”, from Financial Marketing News, suggests going beyond the standard newsletters and seminars (though still vital) to visual methods, like infographics and video.

A great example of video (featured here before) shows PanAmerican Bank’s outreach to the underbanked, including the next generation of bank customers.

Of course, being the social media fan that I am, I L-O-V-E this infographic from Capitec Bank of  South Africa.  They polled their customer base via social media to come up with this infographic:

So how does this tie into that unbanked map? Gaining those customers that are underserved will come in two ways: offering the right product mix, and educating the public about those offerings. Infographics and video – along with more traditional content marketing methods, like newsletters and seminars – are a great way to educate your community, and gain some customers along the way.

More around the web:
A digital wallet for the unbanked
Fewer directors & officers are getting sued, and the pace of bank failures has slowed.
Social media lessons from banking insiders – from KPMG

Half-Baked Marketing = Missed Opportunities

Late last week I came across a contest run by a (not local to me) community bank. “What a fantastic marketing idea!” I thought. “What a way to go beyond free gas!” I thought.

“What a way to take an idea only halfway!” was the reality.

The bank had a great idea – a local photo contest (think cute baby) gets the community involved. The bank even set up a dedicated website to allow online voting and entry. The website was attractive, cleanly designed and appeared to be simple to use.

Here’s where they dropped the ball.

Curious, as I am, regarding how far they took the campaign, I search on Facebook. The bank attempted a Facebook page two years ago, but appeared to abandon it soon after. Twitter? Not there either.

Facebook could have tied in wonderfully with this campaign, and helped this contest go viral. I haven’t named the bank, and don’t know how successful the campaign was, but still: what a missed opportunity.

Marketing isn’t limited now to “just direct mail” and “just email” these days, and just a website alone isn’t going to cut it. Look at where your customers are, and where they want to interact with you. Build social media into your marketing mix. As this contest proves, your online presence doesn’t have to be “all about banking” – and promotional tools like photo contests are tailor-made for Facebook.

In other news:

Is Banking’s Future in the Cloud? My debut piece for BankDirector.com. Great insights from Tom Garcia, CEO of InfoSight, Anil Cheriyan, CIO of SunTrust, and Michael Bryan, CIO of Bank of North Carolina.

The FDIC is encouraging banks to reach the unbanked.

Glad to see my colleague, Al Dominick, back to blogging. Will community banks be for sale when M&A picks up?

Should Banks Go Fishing for Generation Z?

Yahoo!’s new CMO, Kathy Savitt, is a “Gen Z Maniac”.

I didn’t even know that Generation Z existed. Thanks to Business Insider, I now know they’re the generation born from 1992-2010 (which leads to another question – are we back to Gen A next time?). This information got me to thinking: Should banks go fishing for Gen Z?

What do we know about Gen Z? We do know that many of them are starting relationships with banks for the very first time – via a savings account perhaps, or a checking account before they start college. We also know that they live in a wired world – one in which radios are antiquated, news is found via Twitter instead of the local newspaper, and TV viewing doesn’t require a TV. Does your bank have a social media presence? Are you engaging with customers online? And how does your website look – is online banking an option? More importantly – how’s your mobile experience?

One method that works for any generation is catching kids when they’re young – teaching them early to save and have a healthy financial relationship with their bank. PanAmerican Bank found that kids that save are more likely to go to college (click here to see the experience between one of their new Gen Z customers and his banker). By reaching out to kids via financial literacy initiatives, your bank can teach Generation Z (and any other generation) to have a healthy relationship with your bank.

Nibbles from around the web:

—What does your bank need to know about developing a social media strategy & culture?

—Marketplace shares some must-read Wall Street books.

—Uh oh, it’s Basel III.

Oh No, Flo!

Anyone following the news lately can see that Flo’s in trouble.

Well, not Flo really. Love her or hate her, she has come to personify the Progressive brand. But Progressive hurt its own brand image through its response to claims that the insuror went against its own customer in court, backing the defendent to avoid paying the victim’s family.

In short, Progressive took a tough-to-defend position, and when it went viral they tried to robo-tweet their way out. Since then I’ve heard murmurings that maybe the financial industry needs to stay out of social media.

Nothing could be further from the truth.

The complaint that first went viral came via Tumblr, and exploded from there. Even if Progressive wasn’t ‘social’, this would have been public already. Progressive’s misstep was to auto-tweet a response to each and every complaint. Misstep may be an understatement – by auto-tweeting a cold, legalese response, the company instead made a mountain out of a molehill.

Don’t look at Progressive’s debacle as a cautionary tale against social media – instead, look at it as a cautionary tale against social media’s misuse. Progressive’s auto-tweets were a serious error. Social media instead could have been used respectfully and responsibly to address the issue – perhaps directing those interested in a video by Progressive CEO Glenn Renwick (not Flo – save her for the ads) talking about the case at hand. A look at Progressive’s newsroom shows not one mention of the incident – this would have been a perfect spot to house a singular, definitive response.

Social media has changed the landscape of news, information, and interaction. It’s here to stay. So get on board – and look to cases like the Progressive Auto-Tweet Debacle of 2012 as a perfect study of how NOT to use the medium.

Of course, some in the financial space are already doing it right:
– A look at a credit union’s Facebook launch (via Financial Brand).
– SVP of Social Media at Citi, Frank Eliason, is #positivelysocial. You’ll find his blog here.

Community Banking PR Can’t End with Free Gas

Made me grin last Friday: this article from Chattanooga, TN, detailing a popular “free gas” effort sponsored by local community banks.

Not local community bank. That would be banks. Plural. This was done across the U.S., in 20 cities, highlighting that community banks can be a vibrant part of their communities.

Banks have a public image problem that as an industry extends down to community banks. Credit unions gain, it’s thought, because the public believes that credit unions are member-driven, while banks, since they’re shareholder-owned,  don’t necessarily care about the customer. Of course, if any bank is worth it’s salt, it’s going to think of the customer first, but the fact remains – in the view of the public, if credit unions are Jimmy Stewart, then banks are seen as an industry of Potters.

It shouldn’t be this way. Sure, it’s easy to rag on the big banks, but many community banks are as invested in their communities as any credit union. Anyone that’s served on a local civic or non-profit board will likely attest to the vibrant role bankers often play in the communities in which they live.

This is an industry issue folks. And events like offering “Free Gas” – where community banks, despite being competitors, team up to educate the public that community banks can focus on the “COMMUNITY” – are a good way to boost public perception. But it cannot be a one-shot deal – the news in the papers on  the latest “big bank” scandals aren’t going to stop, and unfortunately, when the general public sees the latest bank fiasco in the news, they lump the industry together as a whole, big banks on down.

So get creative and think strategically. How can YOUR bank further reach out to the community (or team up with the competition to do so)? How about a financial education booth at the local career fair? Or turning your bank’s Facebook page into a community resource, like First Niagara Bank? Think about what will be right for your bank and your community, and commit to it. People want to trust their bankers – but bankers have to create that trust.

In the news:

Safest banks in the World? U.S. doesn’t even make the top 25.

Credit unions raising fees too.

BofA eliminating more branches to “streamline expenses and better serve customers’ changing banking habits”.

What’s Hot – and What’s Not – in financial marketing.

CU Growth Tactics for Community Bankers

On July 30, SNL Financial released numbers showing that credit unions have enjoyed a growth in deposits not matched by banks since 2009.

Credit unions benefit from the perception – true or not – of serving the so-called Average American, the working-class Joe that can’t get a break from the banks. That speaks to the history of credit unions, but today the line between credit unions and community banks blurs as the financial space gets more and more crowded.

All this leads me to this question: If the line between credit unions and community banks has blurred, can community bankers use some “credit union tactics” to spur growth?

State Employees’ Credit Union (of North Carolina) found success via frontline marketing, in which employees informed their members about additional services. Is your bank educating your customers on the front lines? If your bank offers ID theft protection, is a teller mentioning that when a customer comes in to make a deposit? Make your bank “stand out” by making it a priority to educate your customers about what financial products are best for them – creating loyalties and a more invested customer base.

What about your bank’s social media presence? With ⅔ of online Americans on social media platforms, we’re no longer in the “early adopter” phase. Many banks still don’t have a Facebook profile – and of those that do, many still don’t use it to engage with customers. Scared of negative feedback via social media? Credit unions typically shift the focus to community and member involvement, but community banks can make that claim too. Steer the conversation to your community – and your part in it – like First Niagara Bank, which with their “I Love Upstate New York” page:

“hoped to obtain 1,000 “likes” in a month. Instead it surpassed that goal within a day, reaching 30,000 “likes” within three months.

The page encourages people to share their passion for upstate New York through a number of activities, including posting scenic photographs, sharing their plans for fun in the area over the weekend, or contributing to a timeline of historic upstate New York milestones. It also shares links to festivals and events, as well as the occasional coupon for local businesses. The feel-good site avoids talk of banking, completely eliminating the customer criticisms that tend to appear on other bank Facebook pages.”

Some credit unions see growth by expanding their membership base, like in 2008 when Navy Federal Credit Union expanded its membership to all Department of Defense. Of course, banks can’t use the same tactics here, but have you analyzed your customer base? How are you marketing to non-customers? A February 2012 Financial Brand article, examining consumers that chose to switch banks, advised concentrating on life stages, like moving to a new town or changing jobs.

How can your bank set itself apart?

In the news:
Five Ways Banks Can Build Mutually-Rewarding Relationships
LIBOR rate-rigging affects public services.
Banks ease loan standards.
Looking for create growth? Come to Bank Director’s Growth Conference in New Orleans.

Differentiate.

Earlier this month JCPenney became…jcpenney. It unveiled its new branding strategy, complete with new logo, new spokeswoman, and a “everyday low prices”. I was thrilled to see the promise of a rejuvenated JCPenney, an historic brand that has lost a bit of its luster over the years. (A little history: I’m the daughter of an ex-retail employee – RIP Castner Knott – and briefly worked in retail myself – RIP Bombay Co.)

So I was excited to see the new jcpenney…and saw the new ad and mistook it for Target:

Later ads seem to feature spokeswoman Ellen DeGeneres – I think the “Changing Room” ad is rather clever – you can view them on jcpenney’s YouTube channel.

It’s complete with the Target brand’s typical “quirk”, vivid colors, and decades-old jazz music. Target’s done a great job of defining itself as a brand, and I can see why jcpenney would aspire to get the results that Target has achieved. Was it intentional to mimic Target so closely (Fashionista thinks so, right down to the “shops” concept)?

While we await results of jcpenney’s rebranding, this does call to mind that now – perhaps more than ever – it’s crucial to differentiate your brand.

Bankers stand out as an industry that doesn’t put as much focus on branding – but in the current climate, where the public image of bankers suffers, maybe they should. In its most recent issue, Bank Director focused on branding in its cover story, “Why Brand Matters”:

“The best way to silence a room of community banks is to ask them to describe themselves without using the words ‘people,’ ‘service’ and ‘community,’’’ says Jeff Stephens, chief executive officer of Portland, Oregon-based Creative Brand Communications, which helps community banks and credit unions with their brands.

His point is a familiar refrain among the people who handle branding campaigns and advertising for a living: Banks just don’t get it. They are a commodity and they all sell pretty much the same things. They sound the same. They look the same. They just don’t realize it. Or, they just don’t care.

In other words, they have weak brands. One market researcher determined that bank brands were less differentiated than bars of soap. They are more like motor oil. Another researcher discovered after polling 16,000 consumers that people like their credit card companies better than they like their banks.  Ouch.

Umpqua Bank, as illustrated in the article, might be the reigning king of bank branding. Branches were turned into stores; service at each store strives to be as excellent as that of a stay at a 5-star hotel. The big idea behind all this? Creating an “emotional connection” with customers.

So, how to differentiate yourself from the rest of the pack?

Name

Maybe it’s the most elementary of branding ideas but it seems to be the one that gets overlooked. How many First National Banks are there in the U.S.? (Answer: Over 400. And that’s just commercial banks). Some of the memorable ones have a little history to them – think Wells Fargo – or communicate something to their customers, whether it’s regional pride (Umpqua Bank = Umpqua River) or a message (think Simple).

Offer Something Different

Bank-in-progress Movenbank is current invite-only, and takes you to an online, interactive questionnaire to “discover your financial personality” (I’m an “entrepreneur”). Their goal – “building a better banking experience”.

I bank with Fifth Third, and when we refinanced our mortgage we got Nashville Predators checkcards due to Fifth Third’s partnership with the Preds. Fifth Third – an Ohio-based bank – managed to come across as a local bank. Impressive.

Service

All of the above is just a gimmick if your bank fails at service. Wells Fargo, ranked the #2 bank brand by Brand Finance, requires that its bankers follow-up with customers. But service doesn’t stop at the branches. How’s your website? Is it clean and easy to navigate? Is it easy for your customers to contact you? What about social media? Is Twitter just a way to pump out promotional material, or are you creating a conversation with your customers? Do you engage with customers on your Facebook page? Perkstreet – also featured in the recent issue of Bank Director – constantly engages with their customers on Twitter and Facebook as part of better serving them.

How does your bank differentiate itself from the rest of the pack?