People still talk about social media as if it was a nascent phenomenon. They seem to forget that social media has been around now for at least five full years, which equates to a millennium in tech terms. But where are all the success stories? The Financial Brand spends at least two hours every day combing the web for interesting financial marketing case studies, and how many truly effective social media marketing examples have we seen? Maybe a couple dozen…in three years.
Let’s roll the clock back to 2005 for a minute. Back then, it was called “Web 2.0,” not “social media.” Analysts agreed change was afoot with respect to the way people used the internet, but no one really knew what to call it. There was much hullabaloo about wikis, podcasts and MySpace. Verity Credit Union had just launched a blog. The Web 2.0 landscape was new, exciting and seemed filled with promise. If consumers really want- or like something, they’ll adopt it quickly and integrate it into their lives, as they did with the iPhone a mere three years ago.
Skip ahead… It’s now late 2010. Podcasts are forgotten. Wikis are never discussed. And all the conference speakers who once extolled financial institutions to launch MySpace pages seem to have disappeared, much like MySpace itself.
Go to any bank or credit union Facebook page and what will you likely see? Not more than a couple hundred “fans” (or “likes”). Check out their Twitter account and you’ll find maybe a hundred “followers” who, ostensibly, are “listening” to the occasional tweet about extended Saturday hours or the latest shred day event. Take a look at their blog and you’ll be lucky to see more than one post per month and no comments.
It’s time to admit it: Social media for most financial institutions — at least as a marketing tool — is basically a waste of time. Here are 11 reasons why.
1. You’re boring
As the current Stolichnaya vodka campaign asks, “Would you have a drink with you?” Honestly? Probably not. Let’s face it: Most financial institutions have dull, colorless personalities. Consumers view banking like a utility. It’s about as sexy as many of life’s other necessities, like toilet paper or the cable company.
Generally speaking, the less people interact with their financial institution, the happier they are. Just because people love money as much as they fret over it doesn’t mean they want to spend time a whole lot of time talking about it, especially with you. Even if people did feel like “engaging around financial matters,” they’d prefer to talk with their friends and family — even total strangers.
Reality Check: Spewing streams of mundane facts, marketing information and links to articles via social media channels does not make banking any more interesting to Joe Consumer.
Key Question: At its center, social media is about engagement, so why try to strike up conversations with people who don’t like you and don’t care to listen even if they did?
2. Banking is boring
Given the choice, if the typical consumer finds themselves with 10 minutes to spend online, what do you think they’ll choose?
- Menu A – Going to ESPN.com, getting the latest info on “Dancing with the Stars,” or reading Perez Hilton.
- Menu B – Visiting a financial institution’s website, checking a credit union’s Facebook page, or listening to a podcast on investing.
Banks and credit unions in the social media space are competing with very powerful entertainment brands, each with its own Twitter and Facebook presence, e.g., MTV, CNN, New York Times, Jon Stewart and The Onion. Your CEO blogging is simply not entertaining.
3. People don’t have time for you
The most precious commodity on earth isn’t gold, oil or diamonds. It’s time. People’s time and attention have become so severely strained that companies like Google and Amazon measure the world in milliseconds. People don’t even have the time to do the things they really want to do, the things they enjoy doing — like spending time with their kids. People are stretched so thin, they actually feel guilty about not being able to watch all the shows they’ve loaded onto their DVRs.
And yet financial institutions — naively, selfishly and/or arrogantly — presume that consumers will spend 10 minutes reading their blog or engaging via Facebook. Why stop there? Why not assume consumers have the time (and interest) to interact with all the commodity brands in their lives. Is it reasonable to expect people to get all excited because their brand of toothpaste just launched a Twitter account? “Oooh, and now look! My power company has a Facebook page!” To consumers, the cacophony of brands competing for their attention blurs into a deafening chorus of white noise.
Reality Check: You should be finding ways to help people spend less time interacting with your organization, not more. Freeing up people’s time is a benefit to them. Consuming more of their time is something that really only benefits you.
4. Internet users are over-subscribed
If people in general are stressed out, then it’s doubly true for the internet-savvy crowd social media marketers label as “early adopters.” These folks spend their day exchanging tweets, emails and Facebook updates, often from multiple accounts. They follow dozens of blogs, subscribe to RSS feeds and have automated Google Alerts. They may even have a social media community of their own they need to maintain. Plus they are bombarded 24/7 by friends, fans and followers who share way more compelling content than one could ever possibly hope to have time for. Quite simply, the bandwidth of internet users has been stretched to the breaking point.
If the internet-savvy consumer has 10 minutes to give you, they are probably headed directly to your online banking site. Ironically, many financial institutions on Twitter and Facebook have limited online banking systems, ugly websites and don’t offer mobile banking or remote deposits. These banks and credit unions hope to be lauded for embracing innovative channels, but, from the internet consumers’ perspective, can often end up looking foolish and misguided.
Reality Check: Generally speaking, the only people who have the time and genuine interest in following financial institutions and their social media escapades are consultants (often the ones espousing the gospel of social media) and other financial institutions (those desperately searching for a peer who has struck social media gold). Every bank and credit on Twitter should have at least 100 followers because there are at least that many industry peers and insiders who will follow just about everyone in banking.
5. Flawed motives
Most social media projects start with the solution, then look for the strategy. “We want to be on Facebook.” Why? “We want to launch a blog.” Why? “We want to create a viral video?” Why?
The majority of financial institutions embarking on social media initiatives aren’t really sure why. Maybe they heard some social media guru talk about how important it is at the last tradeshow. Maybe they’re giving into peer pressure from the fear of being left behind. Maybe they’re bored and they just want to do something cool.
Reality Check: Yes, young consumers are online. Yes, social media is growing because people love it. Yes, free social media tools are available. Yes, other financial institutions have social media projects. But no, none of those are sound, strategic reasons to launch a social media project.
6. Meaningless measurements
When you have no strategy and no clear motive, you are inevitably going to wind up measuring the wrong stuff. Few financial institutions have figured out how to translate “pageviews,” “video views” and “comment counts” into anything meaningful. Your YouTube video was viewed over 100,000 times? So what? How many of those folks are actually within your service area? How many opened a new account?
An unbelievable number of banks and credit unions launch a Facebook page, Twitter account or blog without ever connecting the dots back to the bottom line. When asked what they hope to accomplish, they echo things they’ve read and heard in the social media scene: “We want to foster positive conversations that engage advocacy and drive word-of-mouth buzz.” Huh?? Is it any wonder CEOs and CFOs sit around scratching their heads when marketing teams pitch social media? What about the stuff that really matters? Things like new relationships, loan volume, return-to-member/shareholder, funds-under-management, products-per-household, etc.?
This largely explains why there is still virtually no hard evidence demonstrating a clear, measurable and direct ROI even though the financial industry has been experimenting with social media for at least five years now.
7. Risk aversion
Wedged between regulators and compliance issues, banking’s core business model is ultimately about mitigating risks (e.g., a checking account is less risky than putting money under the mattress, a borrower with a 720 FICO is less risky than one with a score of 620). Banking inherently resists innovation because being innovative doesn’t involve a high rate of success. That’s why the financial industry is full of lemmings. No one ever does anything unless someone else has done it first. Hopefully, that “someone else” did their due diligence. Wrong. They are just like everyone else who came back from a conference all jazzed about the latest buzztheme du jour.
If you are willing to concede that most Web 2.0 experiments are duds, then it’s easy to understand why so few financial institutions find social media success. They follow their predecessors’ recipes using the same ingredients — for better or for worse — even if they wind up making the same crap.
Reality Check: The replay rate for Web 2.0 experiments is very low. You don’t see many banks and credit unions repeating their social media promotions. What does this tell you?
Social media requires a culture that embraces failure because you aren’t likely to hit a home run on your first attempt. In some organizations, one failure is all it takes and you can forget about it from then on. “Yeah, we tried that in 2006 and it didn’t work.” End of discussion.
8. Control freaking
Perhaps the scariest part of social media for financial institutions is the fact that they can’t control the conversation. Brrrrrr, that sends a shiver down the spine of most bank and credit union execs. Perhaps it is this low tolerance for negativity that explains why some banks and credit unions try to game the system, “salting the mine” as it were with more positive, more favorable “user-generated content.” What triggers this behavior? Do marketing teams feel such tremendous pressure to justify their social media investments that they feel compelled to cheat by using shills. You could go further and accuse some individuals in the financial industry of perpetuating the social media myth simply to advance their own careers. “I want a successful social media case study so badly that I will show results on my social media promotion even if I have to make numbers up. It’s how I’m going to land my next big gig.”
9. Failure to communicate (internally)
If you need any reminder about how scary social media can be for financial institutions, think about how many banks and credit unions block their employees from accessing sites like YouTube and Facebook.
Key Question: How can an organization simultaneously reject- and embrace an idea? Isn’t that hypocrisy akin to saying you oppose nuclear war while you stockpile an arsenal of warheads?
It is amidst this bizarre love/hate psychology that marketing teams must try and persuade their organizations to launch social media projects. Just like any other marketing project, they should outline a strategy integrating products and services, while talking about business objectives and tangible results. What do they do instead? They introduce the tool first — “We need to be on Twitter!” — and then talk about how important it is to “engage Gen-Y” while reminding everyone how free and easy social media is. “See, it’s going to be an online photo contest! Someone wins a prize!” The CFO rolls her eyes…
Then when the time comes to launch, what are employees told? Nothing. The Twitter account goes live, but no memo goes out. Not that it matters much, since employees aren’t going to rush home and take time out of their personal lives to check it out (remember, these are the same employees who are Twitter-blocked at work).
10. It ain’t easy
Social media pundits have misled the world into believing that it’s easy. After all, the barriers to entry are virtually non-existent. Anyone can have a Twitter, Facebook, YouTube or Flickr account up and running in under five minutes. And it costs nothing. But creating a social media presence is the easiest part. After that, the real work begins.
Finding social media success is extremely hard. It takes care and feeding. It takes a ton of time and energy. And no matter what you want to do on the social web, it takes a ton of writing. We’re talking about both quantity and quality, and most people are pretty sucky writers.
Reality Check: There is no such thing as a panacea or silver bullet. Social media is no different than any other endeavor; you get out of it what you put into it.
Some they think, “Oh, we’ll just dabble with it in our spare time. If it works, then we’ll take it more seriously.” But what happens? They usually end up pulling the plug on the project after their half-ass investment yields lousy results.
Your marketing department is already stretched thin, and they might not have the social media chops to pull it off. To find any success with social media, most financial institutions will need to create at least one new, fulltime position. For instance, just to run a simple blog, it will take someone — who is that? is it you? — at least 10 hours a week. Expect to spend more time if you want a truly vibrant and growing blog. Add more time for Facebook. Add more for Twitter.
Reality Check: If your social media projects don’t take a lot of time, you’re doing it wrong (e.g., auto-scheduling tweets that you then repeat as Facebook updates).
11. It ain’t free
Many financial institutions seem to think that social media is immune to the fundamentals of marketing — that somehow the basic tenets of promotion do not apply. “As long as it’s awesome, people will find it, right?”
No they won’t.
No they won’t.
Reality Check: It isn’t likely that you’ll create a self-propelling, viral hit. Basically, no matter how cool it is, people aren’t going to know about it if you don’t tell them. And you usually can’t pull it off purely online.
Banks and credit unions have to beg and bribe consumers to engage with their social media initiatives. That takes good, old fashioned marketing muscle, and yes, even traditional media channels. Between sweepstakes, prizes, advertising, emails, giveaways and all the other things that take money, you can wind up spending more on a social media promotion than you ever spent on any campaign before. And then don’t forget to add in the cost of human capital. All for what? One auto loan?
If your financial institution has less than $250 million in assets, you probably lack the resources — both staff and budget — to sustain any kind of serious, long-term investment in social media. Everyone else should feel free to dabble, as long as they acknowledge the opportunity costs. In all likelihood, there are probably more important things you could be doing than social media — things with more immediate relevance to your organization’s brand and/or bottom line.