Codigo | Digital Signage for the Financial Industry

Brands Struggle In Social Media, Data Shows Sobering Stats

Take a quick tour around the web and you’ll find no shortage of social media junkies and innovation addicts listing the myriad of things financial institutions could do in social channels. While they pound the drum of “potential and possibilities,” financial marketers are seldom (if ever) offered any hardcore stats on actual rates of engagement.

We are constantly reminded that there are 850 million users on Facebook, and many believe that fact alone should persuade marketing managers of social media’s power. But that number only represents 12.4% of the world’s population, and (of course) you probably aren’t targeting the entire world.

In the US, for instance, around 150 million people, or about half the total population, have a Facebook account. So if you have 100,000 customers, you could feasibly reach only 50%. But how many don’t know or don’t care that you have a Facebook page? Conservatively you could say 75%. How many don’t ‘Like’ any brands on Facebook? Somewhere between a quarter and three-quarters. So a financial institution with 100,000 customers could reasonably plan on reaching a Facebook audience numbering around 6,500.

But among those consumers who say they ‘Like’ brands on Facebook, 78% ‘Like’ fewer than ten brands. And what kinds of brands do they like? Fashion, food and entertainment brands such as Apple, Starbucks, Disney, Xbox, Red Bull, Helly Hansen. In other words, things people want, things they actually like. Banking is something people need (and they only need it to get the things they want), and it’s never been particularly well-liked.

Getty Images | Copyright Issues

It’s important to remember that there are hundreds of millions of rabid Apple fans, and yet how many are connected to the company through social media (answer: a small percentage).

While hundreds of millions of loyal and devoted Starbucks customers religiously buy their lattes every day, how many are fans and followers?

Key Question: Why should you be among the ten (or fewer) brands people connect with in social channels? What do you have to offer that competes with the social media experiences offered by big brands, who themselves struggle connecting with even their most passionate supporters?

One social media expert decided to conduct a little experiment. For one week he ‘Liked’ every company that asked him to. At the end of seven days, he had ‘Liked’ 46 different brands. But only 10 had given him any reason to do so. For the first time in history, we have marketers asking consumers to do something without telling anyone what they stand to gain from it. Where’s the benefit? If brand managers are unsure, consumers are even more unsure.

Then what happens when consumers are disappointed with a brand’s social media presence? A study by Relevation Research found that a third of those who connect with a brand in social channels later turn around and dump the company. After distancing themselves from the brand on social media, many report they then view the brand more negatively, shop/visit it less often and wind up spending less.

Bottom Line: Social media isn’t all rainbows and butterflies. Contrary to what social media’s proponents would have you believe, there isn’t this vast army consumers impatiently waiting for every brand they use to hop on the Facebook and Twitter bandwagon.

You can find all the sources — a dozen in all — for the data used in the infographic shown below here on page 2.

Getty Images | Copyright Issues

Pages: 1 2

Search For More: Social Media, ,

All content © 2014 by The Financial Brand and may not be reproduced by any means without permission.

Comments

  1. Interesting stats. Reinforces the fact that people don’t really like to be marketed too. Gaining consumer attention and getting action is just as tough of a battle on facebook as any other advertising channel.

    “Only 1% of ‘fans’ engage with facebook brand pages”

    You might assume these are damning numbers. But this isn’t necessarily the case.

    “I don’t think it’s a bad thing,” said Karen Nelson-Field, senior research associate for Ehrenberg-Bass Institute who describes herself as a “Facebook advocate.” “People need to understand what it can do for a brand and what it can’t do. Facebook doesn’t really differ from mass media. It’s great to get decent reach, but to change the way people interact with a brand overnight is just unrealistic.”

  2. This information above reinforces that social media is a channel, not its own strategy. Brand mentions don’t happen online as we see here – but we do know that many happen offline. If you have a strong brand, message story and use social media to spread that message, you can influence messages during offline conversation. That’s what needs to happen.

  3. Kacie has it right, social media is not its own strategy, but one piece of the overall plan. Understanding your audience and creating interesting content is the most important part. Also, don’t “sell” anything. Create fun, interesting, and original content; and rarely, if ever, ask people to buy/donate/like you. Do this and followers will follow.

  4. Indeed, consumers are not waiting for Banks and Credit Unions to market to them via facebook or any other channel including online ads, direct mail, statement inserts, mobile advertising, in branch advertising or any other method. It is up to the Financial Institution to make itself relevant.

    Therein lies the trouble… many Community Banks and Credit Unions simply have nothing to say when asked why consumers should bank with them vs the Community Bank down the street, vs the Credit Union across the street, vs the mega-bank or non-bank competitor (such as PerkStreet, Simple, MovenBank, SmartBank, etc.) in town and online.

    Setting up a facebook page does not make a social media strategy. Postings about branch hours, a teller’s birthday, recount of philanthropic activities, running a version of the cutest cat contest does nothing to engage with consumers. These topics – which by my unscientific study represent 90%+ of posts for a typical Community Bank and Credit Union – do nothing to help consumers improve their financial lives.

    Marketing requires effort; yet too many Community Banks and Credit Unions expect results with little or no effort. Zero strategy and zero differentiation will always result in failure, especially in an ultra-competitive and highly commoditized industry.

    Blaming social media or those suggesting that social media provides for a unique opportunity to connect with consumers is not very productive.

    PS: nice demonstration of quantipulation when suggesting that that only half of a Bank’s customers can be reached on facebook simply because half of the US population is on Facebook.

  5. While I agree with the overall observations, my only counter-point if you will is that it’s been a bit of a chicken-and-egg situation. Most financial services marketers are waiting to see numbers before taking the plunge, and hence there isn’t enough risk taking, innovation and creativity happening out there to really make social media work, and THEN to know what works and what doesn’t. It will take sometime for marketers to gt it right, but they will have to try, and not wait for others all the time.

    One of India’s largest banks, ICICI Bank has actually launched an app that allows users to check their accounts on FB. Good idea? We’ll find out, but at least they’re trying something new.

  6. Hi Vikas,

    There are actually quite a few banks and credit unions involved in social media. A study conducted by The Financial Brand put Facebook utilization at 75%. One half are using Twitter and YouTube. Everyone is still waiting to see the numbers… even the thousands of financial institutions who have already “taken the plunge.”

    As far as growing pains go, I’d expect marketers would have a better handle on social media by now. Marketers have been wrestling with this for over 6-7 years. Compare that to marketers’ experience with the internet. The internet popped onto financial institutions’ radar screens in the mid 90s. By the turn of the millennium, nearly all had adopted it into their business models in meaningful ways.

    ICICI Bank’s solution that you mention brings up an excellent point. ICICI Bank is using social media as a delivery channel for actual banking services. It’s a transactional tool, not just a communications or marketing tool.

    Those constantly pushing the financial industry to be more innovative need to also remind banks/CUs that innovations are only worthwhile if they help consumers solve problems. ICICI Bank’s approach may actually do that. But what problems do most other “social media innovations” from the financial industry solve?

  7. A Social MEdia strategy should incorporate SoMed into existing customer touchpoints. Treating SoMed as a “bolt-on” or silo will never work. Unfortunately this is the way most companies treat it. In my mind SoMed will complement the overall Customer Experience, if it is integrated into the business strategy of the company.

Speak Your Mind

*

Next article recommended for you
facebook_youtube_twitter_linkedin_pinterest