Digital Banking Summit | June 2-4, 2014 | Los Angeles

Does Customer Service Through Social Channels Make Sense In Banking?

Is it wise for financial institutions to use Twitter and Facebook to resolve customer issues?

Nearly everywhere banks and credit unions turn, it seems someone is telling them how involvement in social channels is an absolute imperative. One of the more popular reasons cited for social engagement is that financial institutions can answer people’s questions and address customer complaints. And nearly all the big banks have heeded this advice. Even The Financial Brand has singled out customer service and support as one of the (few, limited) practical applications of social media in retail banking.

But everyone is doing it…

Here’s a list of some major U.S. banks that have Twitter accounts dedicated to providing customer service and support.

Account
Created
Tweets
Sent
Accounts
Followed
# of
Followers
Team
Size
Hours Days Twitter
Verified
BofA Jan
2009
109,937 32,870 29,882 6 8a-8p M-F Y
Chase March
2011
16,951 587 6,046 10 7a-9p M-F Y
Citi October
2009
18,758 9,496 8,695 ? 9a-10p M-F Y
KeyBank February
2010
1,176 499 1,164 6 8a-5p M-F N
Regions October
2011
5,428 4,082 3,957 6 6:30a-7p
8a-1p
M-F
Sat
Y
TD Bank August
2009
25,750 6,750 11,552 10 6a-11p 7
days
Y
US Bank May
2010
4,010 1,025 2,240 2 8a-5p M-F N
Wells Fargo March
2009
49,378 13,686 14,778 5 6a-5p M-F Y

You’ll notice BofA has sent the most tweets, which is no surprise since they are the financial industry’s initial pioneer of the Twitter support concept. Two of these eight banks have Twitter teams with 10 employees. Only one (TD Bank) offers Twitter support seven days a week.

It seems nearly every big bank in the world is either doing this already or planning on it soon. But is this really such a good idea?

If we suck, please tell all your friends

There are some folks who would argue that any and every additional service channel that can be offered is inherently “good.” But just because customer service can be delivered in social channels doesn’t necessarily mean it’s a good idea.

Key Question: Do banks and credit unions really want to encourage people to gripe about their organization and its products in public forums?

Using social media as a customer service tool could be likened to putting a problem resolution desk in the middle of your town square. Set up the desk, hook up some loudspeakers, and broadcast every customer’s beef to everyone within earshot.

Do you really want the whole community to hear customer after customer grouse about problem after problem? No. That’s why banks put those small, private offices in the back of their branches — so prickly customer issues can be resolved quietly.

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Service in social channels severely limited for banking customers

How many customer complaints go unanswered in social channels? Most. Among those customers who receive replies, how many get their problem resolved within Twitter? Very few. Why? Because it’s extremely difficult to resolve sensitive financial issues in a public setting. Customers don’t want to be sharing their account number with everyone on Twitter, and then there are the security and privacy issues involved when having online conversations in a third-party venue. Who knows who at Twitter and Facebook have access to their users’ information… and what they do with it?

So how do most customer issues get addressed by financial institutions on social networks? The bank or credit union sends a reply to the customer publicly, something along the lines of, “Thanks for your message. Please send us a direct message (DM) and we’ll have someone contact you.”

The standard replies commonly sent by many banks offering help on Twitter.

After a bank receives the direct message, a service rep often pushes the conversation to another channel — usually the phone — because most banking issues simply cannot be resolved via Twitter.

A redundant (and costly) layer in the customer service process

How efficient is it to tell everyone who contacts you through social channels that the exchange must immediately be migrated to another (existing) channel? It’s almost like some banks have hired completely new teams of social service reps whose primary function is to funnel customers to the old customer service teams.

Key Question: Are financial institutions simply “doubling down” on support costs when providing service through social channels?

Aren’t the same number of service requests basically being processed, but instead of having 4-5 channels, there are now 6-7, and each requiring its own set of resources (staff, budget, management)?

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Service through online chat crushes support in social channels

If you have live, online chat, why not encourage people to use that instead? Service and support through online is infinitely more secure than over social networks. Online chat gives you an environment you can control, with total privacy, and it is much easier to archive conversations than on third-party platforms.

From the consumer’s point of view, live online chat is superior in almost every way to support through social channels. It’s faster, with response times averaging under a couple minutes for online chat vs. 2-48 hours on Twitter or Facebook. It’s more secure, so a wider range of transactions and inquiries can be accommodated. And most importantly, it results in a higher rate of “one touch” resolutions.

Reality Check: Consumers hate getting passed off and shuffled around. It makes them feel like they’re getting the run around. Consumers want their problems handled by one person — usually the first person they deal with — and in the channel in which contact was initially made, preferably on the first interaction.

If you’re going to redirect consumers to another service channel and you have instant online chat, you could essentially set up an auto-reply system in Twitter and Facebook effectively saying, “Please visit our online service center at website.com. It’s open 24/7, and you can chat with a live agent almost immediately who will answer all your banking questions.”

From novelty to service channel of preference?

Is service and support over social networks little more than a novelty — for financial institutions and their customers alike? Will people still be tweeting complaints about their banks 10 years from now?

Yes… if banks keep giving consumers the impression that service on Twitter or Facebook is somehow better and more special. People seem to think airing their grievances over a social network will get them faster, more personal attention. Is it true? In some cases, yes, sadly it is.

Perhaps some consumers believe the only way to get attention is to be the squeakiest wheel in the most public place. They may assume that bitching publicly on Twitter is more likely to trigger a response from the bank, and by a real person.

Or perhaps consumers have become so jaded, so frustrated with service in other channels that they’d rather try something — anything! — new and different.

”Press 1 for English…”

Um, no thanks. I’ll try Twitter instead.

A few years ago, the only kind of consumer tweets you’d see about a bank would be one of exasperation. They had tried to resolve their issue in another channel, and were usually expressing their frustration and dissatisfaction on Twitter. Nowadays, you’ll see people head straight for Twitter the instant any need, issue or question pops up.

Bottom Line: Instead of focusing on which channels you think are appropriate for service and support issues, you should focus on the issues themselves. If financial institutions fixed the problems they face today — particularly in their existing service channels — perhaps they wouldn’t hear so many people complaining on social networks.

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Comments

  1. Personally, I couldn’t agree more. But I think there may be some people out there who will disagree. For example, I saw the following tweet just last night from @BankMarketing:

    Cost to resolve a bank customer’s dispute on twitter is 8 cents versus $4 at the branch. Via @mattwilcoxpro #ABAMKTG

    I don’t know the source of the data, or how the numbers were arrived at. But it’s this kind of quantipulation that takes hold, because it supports the Twitter fans’ point of view.

    I don’t see how this can be true unless the people who staff the Twitter channel earn 50 times less than the people who staff the branch.

    On the other hand, it MIGHT be accurate if the complexity of problems that come through the branch are 50 times more complex than the problems that come through Twitter.

    But I doubt that — I think your “squeaky wheel” premise is what’s really happening.

  2. 99% of all issues will reach resolution at a branch. According to a study by Javelin Strategy & Research covered here at The Financial Brand back in January:

    “Citi did the best job responding to customers via Twitter, successfully resolving customers issues using just tweets alone 36% of the time. Wells Fargo and Bank of America lagged far behind, with 11% and 3% resolution rates respectively.”

    And Ron, you’re right. There’s a big difference between questions like “Do you have remote check deposit?” and “Can I renegotiate my mortgage payments, or will you consider a short sale?”

  3. As you both allude to, there is a huge difference between ‘responding’ to a service issue and ‘resolving’ a service issue. I have had several instances in the past year where I have reached out through Twitter and Facebook to deal with a service issue with banks as well as retailers. In almost every case, I was referred to another channel (usually email or phone) and it was always a situation where I needed to reach out an additional time (as opposed to the firm reaching out to me).

    In other words, I agree with Ron that there is significant quantipulation occurring here, most likely comparing the cost of a tweet with the cost of another channel interaction. I am surprised the cost of $9 was not thrown out for a phone resolution since that is used by many bankers in justifying alternative channel delivery.

    . . . we all tend to hear what we want to hear, sometimes without questioning the logic or the presence of facts.

  4. Here’s the thing — your customers are going to complain about you regardless of whether or not you’re on Twitter/Facebook. These complaints are already happening. What looks worse: asking a customer to DM you or having a stream of complaints that don’t get acknowledged at all?

    Also, most people simply want to be heard and acknowledged. Most don’t want to, or simply don’t, follow-up. I imagine the follow-up ratio is a bit higher in financial services, but the vast majority won’t. I think having a CS team on Twitter/Facebook is the way financial institutions NEED to go. It’s far more foolish, in my eyes, not to engage these channels.

    And the cost/work involved in servicing these channels is minimal.

  5. Kasey, it’s a popular myth to believe there are hoards of people already out there complaining about every financial institution. It just isn’t the case. People only complain about the big banks by brand name. Basically, if you have more than $10 billion in assets, you’ll find folks out there griping about your brand on a fairly regular basis. But for the 90% of banks and CUs with less than $1 billion in assets, you won’t find hardly anyone mentioning them ever. Banking is so generic, so commoditized that most consumers simply refer to their financial institution in the abstract: “my bank” or “my credit union.”

    Are you sure you’d be comfortable telling a $175 million CU with 6,500 members they need a “CS team” on Twitter/Facebook? Or are you really referring to the industry’s biggest competitors when you say that is the direction financial institutions need to go?

    I’d suggest that consumers are smelling blood. They know they can essentially blackmail companies by bitching publicly about them on social networks: “The only way you’re going to quiet me down is by giving me what I want.”

  6. Said “CS team,” doesn’t need to be 10 people. It can be one individual or a number of individuals. Granted, Hometown Credit union might not have the volume that Bank of America does, but that doesn’t mean Hometown should ignore the space. If there is an opportunity or issue to be addressed, I think financial institutions deserve to provide service to their customers/members. You never know who the person is that might be talking about you unless you’re listening. And it might be 1 person today, but tomorrow it might be 100. Better to be proactive than reactive.

    Also, I should note that being active on Twitter/Facebook purely for CS doesn’t make sense. There needs to be a bigger strategy behind their investment in social. But if there’s a concrete strategy in place, adding a CS component isn’t a large investment.

  7. Thank you for sharing your thoughts on the topic, it is one that is very close to my heart. In fact I wrote extensively about it in my book @YourService published by Wiley. Currently I am Director of Global Social Media for Citi, but most people are familiar with my work while I was with Comcast. I have spent most of my career within Customer Service and I view social media with that same hat. First the key to any successful social media strategy is listening to your Customer, within social media but also through all other interactions. The challenge is, at least in my personal view, Customer Service has been broken for many companies for years. It seems that new technologies only tend to make it worse for Customers instead of better. Social media has now provided the Customer a new pulpit to make clear what is broken within a business. This is why many companies start social media with the Customer in mind. In my book and on the web, I have referred to social media Customer Service as a failure, mainly due to the fact that companies are not fixing what is broken. They of course are then sending a message to all their Customers that if they want help or to have their situation handled right, they must blast the brand in social. In my view success will come if you create the right experience in the first place. It is imperative for long term success. At the same time as a Customer Service person, if I heard a Customer yelling on the street corner that they needed help, I would help them. Why would social be different? Here is a post I did regarding the failure of social media Customer Service for Brian Solis’ blog:

    http://www.briansolis.com/2011/10/social-media-customer-service-is-a-failure/

    Thanks,
    Frank

  8. Thanks for the comment Frank. I’ve been following your career for quite some time now, and have shared with The Financial Brand’s readers a number of articles you’ve either written or have been featured in.

    You’ve touched on one of the major ironies inherent in Twitter support: customers are usually complaining about service they’ve already received in another channel.

    I like your analogy about someone standing on a street corner yelling that they need help. Perhaps a bank or credit union should reach out to ANY consumer complaining about banking on Twitter, not just their own customers. To your point, if someone is yelling they need help, won’t you help them? Or are you the kind of person who only helps friends/family but not strangers (to carry the analogy another step)?

    Once an organization joins Twitter or creates a Facebook page, they are essentially hanging a sign online that says, “Please crap all over us here.” The spirit of this article isn’t to dissuade financial marketers from using social channels so much as make sure they go into it with their eyes open. All too often I see banks and credit unions launch their social initiatives thinking it’s going to be all rainbows and butterflies. “Oooh, we’ll help people out by answering their questions. We’ll throw in the occasional self-promotional tweet, and have a few fan-building contests.” Most financial marketers aren’t braced for the reality: few people are talking about their organization, the criticisms are harsh and outnumber the questions 10:1, and fans/followers cost money.

    Thanks again Frank,

    Jeffry Pilcher, Publisher
    The Financial Brand

  9. I may be a tad biased about this but I respectfully disagree. Consumer preferences evolve continually, particularly in the banking industry – tangible evidence of this lies in ATMs, mobile apps and self-service kiosks. If everything can be resolved in person, why do businesses offer phone/email/chat options? For a business to ignore that their customers want to do business in a manner that fits their needs is tantamount to ignoring that customer. New service channels are being created and I think it behooves all brands to understand that customers may not want to leave to get an answer, they want it where they are at. Is there an obligation to protect customer information? Absolutely – however to dismiss social networks as an emerging service channel based on this is dismissive in my opinion. Can a customer use a search engine which drives them to a brand’s dot com (cue up SEO optimization) to find the answer they’re looking for? I think this depends on the complexity of the sought after information. The question is: are customers willing to do that? In both of my roles establishing social service channels, I have found that oftentimes there are general questions that can be answered with one quick hit of the enter button but customers seem to prefer to obtain the answers in the manner that fits their needs.

    I agree the customer experience is broken but I truly believe social is the key to incorporate that in-person experience back in an online environment. What I have found to be unique is that there is also an emotional context gleaned from social interactions that have senior executives looking at data differently. I believe that is one of the keys to flip the experience prism upside down. When you are looking at verbatims from a customer expressing what’s wrong w/the process, it’s often different than looking at xx percentage visited this product section of your dot com. Social customer service data is also an important component in identifying exactly where those channel failures exist. The beauty of this is that you can identify these areas very quickly without paying a consultant to tell you :)

    I agree with Kasey that it’s foolish not to engage w/an emerging consumer demographic that wants to ask these questions albeit in a public manner. One final thought, customer data is changing at a rapid pace and risk mitigation adds a whole new layer of complexity. Another piece that I often think about – brands are using traditional data elements for their customer profile. Think back to when brands made the decision to ask customers for non-traditional info pieces i.e. cell phone, email address. I think social customer service ups the ante as we now have to figure out how to incorporate social data into that profile and in turn use that data wisely. As you may tell, I am really passionate about this topic and invite your feedback on my perspective.

  10. Please note: The article does not dismiss the concept of using social channels for service. It just asks hard questions and lays down some counterpoints to a popular strategy. It is intended to encourage critical thinking and stimulate discussion. So far, so good :)

  11. It appears to me that the problems with social media as a financial services channel derive from the fact that many banks do not appear to have an overall social media strategy, but instead have pursued an incremental, opportunistic approach. A bank sets up a general bank Twitter handle, notes that many tweets are customer service related, so sets up a customer service handle. Is this new service-focused Twitter handle integrated with other bank customer service channels?

    It would seem to be more productive to develop an understanding of the customer service experience at the bank to identify both gaps in service as well as source of potential channel conflict, create an integrated customer service strategy embracing all customer-facing channels, and design a communications program to enable customers select the most appropriate customer service channel.

    Social media does have significant potential as a customer service channel, but when it is used in isolation from other channels, its limitations are exposed. Integration in the design and implementation of multiple service channels can help social media realize its potential in this regard.

  12. Interesting article. It seems to ignore a simple consideration – what customers want. Nielsen, our parent company, and NM Incite, our company, have done research that shows US customers spend increasingly more time on social media, and many of them prefer to get service right there.

    It’s now up to all companies, including banks, to figure out how to add value to customers asking for service on social media channels. Immediately diverting them to other channels (phone, email, chat) is not helpul. Knowing what issues can be “triaged” in public, when to take covnersations private on social channels (e.g. DM on Twitter), and when to take conversations off social channels, is part of the “art and science” of social care.

  13. Nielsen’s research undoubtedly shows consumer interest in customer service through social channels… broadly, for all categories and all industries. But there is also research showing that consumers are not comfortable discussing financial matters in social channels, primarily due to security/privacy concerns. Indeed it is these same security/privacy concerns that prevent a significant chunk of the population from adopting online- and mobile banking solutions (the #1 reason cited in study after study). If people aren’t comfortable with online banking over a secure, dedicated website, they aren’t likely to be comfortable with social channels at all.

    People don’t mind resolving disputes with United Airlines, Starbucks, Macy’s, Amazon, Zappos, etc. in social channels because there is very little risk involved. But the very nature of financial matters puts a consumer at risk anytime they discuss banking in a public setting (online or off) — anything from identity theft and credit destroyed to accounts drained.

    Think about this: If @NMIncite_Gadi tweets at XYZ Bank that he had a bad experience, any bad guy listening now knows two things. They know the real name of @NMIncite_Gadi is Gadi BenMark, and that Mr. BenMark is a customer at XYZ Bank. It doesn’t take long to find out Mr. BenMark lives in New York and works at NM Incite. Then you can find Mr. BenMark’s age (43), current address, current phone number, previous address, etc., etc.

    All that from one tweet. And it takes less than three minutes to figure it all out.

    Then all the bad guy needs to do is make a “customer service call” to Mr. BenMark… “Hi, Mr. BenMark? This is Sally from XYZ Bank. We’ve had to freeze your account because we’ve noticed some suspicious activity.” It isn’t difficult to phish account and identity details at that point. “Mr. BenMark, so I can confirm your identity, would you please give me your [birthdate, SSN, account #, PIN, etc.]“

    Now tell me, are you sure you want to be tweeting to the world where you bank? It’s a lot different than tweeting a gripe about a moldy muffin to Starbucks.

  14. Great article, even better discussion. Add me to the long list of people here who are not buying the hype of social media as today’s magic elixir– whether it be for customer service ills, anemic brand engagement, marketing strategy, whatever. I also agree on the limitations for “resolving” service issues, as Jim said.

    I also respect the arguments for considering risks and costs, but I still say firms are better off “being there” than not. I just wrote about this yesterday (and quoted Ron Shevlin and Frank Eliason), and discussed the good news/bad news aspect of social media.

    http://beyondthearc.com/blog/2012/customer-experience/guest-post-demystifying-social-media-its-all-about-business-strategy

    For the most part, I just think of social media as a magnifying glass. If you generally have good policies and practices with well-trained people acting in customers’ best interests, this will be more visible. If you don’t, that will be more visible too.

  15. Yes it really makes sence, because customer wants to get their work done very easily, so large amount of people will focus towards social media to intreact with people to get solutions in lehman language. There is an interesting blog from Infosys SocialEdge about social customer service. You can also have a look at it for more information. http://bit.ly/Qi358Z

  16. Some great conversation here. Most of the thoughts have been focused on clients expressing frustration or complaining via social networks. What about all of the positive attention that’s possible when clients have a great experience with their bank? To not re-broadcast that great news misses an opportunity to more deeply connect with the client and to celebrate with the bank staff that made it happen.

  17. Some great points here on all sides. In my experience (working at a small-ish CU), very few people come to us for issue resolution via social channels. We don’t have a response team, but we do listen. Because we are smaller in size, we can take them on a case by case basis. However, we don’t encourage people to resolve issues via social media. If you have a large number of people talking about service issues on social media, something might need fixed.

  18. This seems to suggest you have a choice to be on “social media”. You may not FB, tweet or G+, but what about Yelp and Foursquare for instance? A F.I. has no choice in the matter. They are exposed to comments, like it or not. Better at least be listening…

  19. Bob, that’s a commonly held belief — that consumers are “already out there talking about every FI.” It simply isn’t true. In repeated studies, The Financial Brand has found one social mention (across all platforms) per $100 million in assets per month. This average applies to FIs off all sizes, including BofA ($2 trillion in assets, 20,000 social mentions per month) all the way down to small CUs. Considering that 97% of all financial institutions have less than $1 billion in assets, it’s hard to say every bank and credit union needs to be actively engaged in social platforms with a CRM team when most are going to see ≤Ø-5 relevant social mentions per month.

    Compounding the problem for FIs is the vast sea of me-too names shared by so many. Can you imagine how hard it is for one of the dozens of First National banks to figure out if a consumer is talking about them or some other First National? Then there’s First Federal, Community One, Community First, etc. Any financial institution sharing its name with other banks and CUs is going to have to wade through false positive results.

    Would it be nice if FIs had the resources and bandwidth to “listen and respond?” Yes. But’s it’s more like a bonus than a essential business imperative. If 100 FIs were randomly selected, at least 95 would have more important and more productive things they should be doing. They engage in social media at the expense of some other opportunity — something with an established track record and a proven ability to significantly impact the bottom line. They are leaving real money on the table by pursuing the latest “shiny thing” vs. focusing on the low-hanging fruit sitting right in front of them.

  20. In my opinion talking through social media about customer complaints is the worst thing the bank can do, it could do more harm to the way people see the brand than to help customer. Chat is the best way of dealing with such a problems – eg. look at the Alior Sync (one of the BAI Finacle global banking innovation awards 2012 finalist) and its virtual branch – open 24/7, people can make complaints through chat, so that the problems can be responded and resolved in real time. Through the virtual branch, the banker can interact with customer and do everything that customer can do in physical branch – that is right approach to customer service experience..
    If we talking about social channel, I think that encouraging audience to talk/ vote about innovations, suggestions and ideas could be more useful for both – bank and customers. It is all about engage your customers more and collect data – ask smart questions and it is quite possible you get reasonable answers – People won’t tell you exactly what they want because they don’t know, but definitely tell you what they don’t need. Social media can play a big part in banking nowadays but not really as a contact channel

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