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Industry First: Bank Ties Home Loan Rates to Facebook ‘Likes’

ASB, one of the biggest banks in New Zealand, is taking a page straight out of Groupon’s playbook and adding a lottery twist. It’s a first in the banking industry, and one of the most innovative ideas to come out of the social space this year.

Every Wednesday for four weeks, ASB’s “Like Loan” will give Facebook users the opportunity to win a special home loan rate. Four lucky winners will be selected to receive a reduced fixed-rate home loan based on the number of Facebook ‘Likes’ accumulated on the promotional app that day.

Subscribe TodayASB’s Facebook page had 66,940 ‘Likes’ before launching its “Like Loan.” They added nearly 6,000 more — roughly 9% growth — after the promo launched. That helped drive the first week’s “Like Loan” rate down to 2.4732%, well below ASB’s regular advertised mortgage rate of 5.19%.

The promotion generated buzz on Facebook, with 6,387 users talking about it. ASB says more than 800 Facebook users shared the “Like Loan” app with their friends on the first day of the promotion.

( Read More: Customers Chat One-to-One in ASB’s Virtual Facebook Branch )

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( See More: Hello… I’m the New ASB! )

An Innovative Facebook Breakthrough

ASB is doing three things that very few other banks or credit unions do:

1. They are using social media to market/promote banking products.
2. They are giving tangible benefits to fans for their Facebook activity.
3. Their giveaway has financial relevance.

ASB shirks the advice of social media consultants who swear it’s a sin to push products on Facebook or Twitter. Phooey to that, ASB says.

And why does it seem most Facebook giveaways in the financial sector have nothing to do with banking? Fans might be able to win concert tickets for a trivia question or pet photo contest, but what’s that have to do with banking? Nada.

Key Question: If you aren’t supposed to spend time marketing yourself on Facebook, then what good is it?

You most certainly can use social channels to sell stuff. You just can’t do it with lame ham-handedness – e.g., “Check out our loan rates this week at thebank.com.” That kind of marketing white noise lacks style, character and creativity. Don’t bother.

This is precisely what makes ASB’s “Like Loan” promotion so unique. ASB is believed to be the first banking institution to create a direct and immediate connection between people’s social media engagement (Facebook ‘Likes’) and a financial product of strategic importance (home loans) by using a relevant incentive (lower loan rate).

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It’s certainly an intriguing concept — rewarding Facebook likes with better rates. But why did ASB decide to only award the Facebook home loan rate to four fans instead of all of them?

Social media commentator David Slack says the giveaway is fantastic… for a few lucky winners. “But it means that everybody else is roped into it to do the marketing for ASB for nothing by sharing the buzz around,” he says. (To be clear, Slack thinks ASB’s campaign is very clever.)

And what if the four people selected decide they don’t even want a home loan? Then fans might complain that the “Like Loan” promo was little more than a marketing charade.

( Read More: ASB Launches Mobile Facebook Payments )

Analysis & Takeaways

The new social media landscape does not supplant traditional business concepts — ideas like sales, profits, account acquisition, cross-selling, retention. These things still matter. You always need to be looking for ways to integrate social media into sales campaigns, and the other way around. Ask how you could use Facebook in a product promotion to yield more loans. Look for opportunities to create those product tie-ins in all your social media projects.

Reality Check: There’s one simple reason social media struggles to establish any kind of ROI… You get 0% of the sales you don’t ask for. If you don’t promote your products in social channels, then of course you won’t have any bottom-line results to show for your effort.

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

FMCG Direct | Focused Excellence in Financial Services Marketing

Comments

  1. Exactly! “You get 0% of the sales you don’t ask for. If you don’t promote your products in social channels, then of course you won’t have any bottom-line results to show for your effort.”

    Having been involved in social media and financial marketing since social media first came onto the scene back in 2007ish… the rules of the game continue to change.

    Honestly, and shamefully, I admit I was one of the ones saying “You can’t ask for the business in social media. Just have a conversation.” Now I call bullshit on myself and anyone else still saying the same thing.

    Banks and credit unions are having a hard enough time asking for the business face-to-face. The way banks and credit unions develop business must change and evolve. It’s all about listening, learning and engaging. Banks and credit unions can audit and analyze the information they are gathering from social channels to gain applicable insight they can take action on. We must remember though that knowledge is not power. Knowledge + action (asking for the business) is power.

    Article: http://www.ptpnewmedia.com/resources-articles-path-to-digital.php

    A lot has changed in 6 years. It’s not just about social media anymore but social commerce. How can we make money (loans and new accounts) via not just social channels, but all digital channels combined. Banks and credit unions can generate leads with social media.

    Article: http://www.ptpnewmedia.com/resources-articles-generating-leads-with-social-media.php

    “Ideas like sales, profits, account acquisition, cross-selling, retention. These things still matter.”

    Yes… they do matter and this is one reason we believe credit unions and banks must look at developing digital marketing and sales systems (not just playing with the tools). How do all these tools connect and work within the system to generate leads for loans and new accounts?

    Article: http://www.ptpnewmedia.com/resources-articles-are-you-checking-or-wrecking.php

    At the end of the day, all roads are starting to lead back to digital. The web is changing for the fact that the web is no longer just a desktop browser but a digital journey. This digital member and consumer journey affects how people perceive your credit union and do business with you.

    Video: http://www.ptpnewmedia.com/video-digital-member-journey.php

    I discuss these matters in greater detail in a recent webinar, Credit Unions in a Digital World Part II. Digital marketing and sales systems can provide research and insight to get the right product, to the right people, at the right place and right time. We believe the details are in the data and using data you can began to track the digital behavior of members and consumers.

    Webinar: http://blog.ptpnewmedia.com/2013/06/webinar-recording-credit-unions-in-a-digital-world-part-2.html

  2. Damien Brooks says:

    You have to risk it to win a biscuit!
    This is a great idea and I praise the execs who let them try it. Giving away 4 cheap ‘crowd sourced’ loans is a very strong prize and motivation for those to enter and to share. I personally would have launched whole hog and gave away 1000 or more in a one off campaign over a longer time period like a month as this would have sparked an even greater reach. Either way this is a winner and well done!

    PS – Whose the agency behind this as their other platforms ‘Social Connect’ and ‘Virtual Branch’ look like solid ideas too.

  3. This is a really great promotion. The problem we struggle with at my instittion is can we do this type of promotion according to Facebook rules and guidelines. I’ve researched their rules and it seems to me that techincally Facebook does not allow this kind of promotion. Facebook guidelines:

    iv. You must not use Facebook features or functionality as a promotion’s registration or entry mechanism. For example, the act of liking a Page or checking in to a Place cannot automatically register or enter a promotion participant.
    v. You must not use Facebook features or functionality, such as the Like button, as a voting mechanism for a promotion.

    Will Facebook actually shut your page down if you violate their rules? What is the likelihood of them finding your page? We are very cautious and don’t want to get into any legal troubles.

  4. Lauren,

    The Financial Brand has written extensively on the Facebook rules that are unfriendly to marketers, and it seems they are starting to loosen their restrictions.

    We have aggressively searched for examples where Facebook punished marketers for violating its terms of service, and we have never found anything, just some anecdotal hearsay and rumors.

    What are the chances Facebook is going to find your promotion? Slim. Does Facebook really care what a credit union with 760 fans does? Probably not. If Facebook wanted to start cracking down and making examples out of people, would they pick your credit union? Very unlikely. They’d start with ASB.

    Bottom Line: Everyone is breaking Facebook’s terms of service, and everyone is getting away with it.

  5. Lauren, there are 3rd party applications you can use to run Facebook contests and promos. The key point of any promo should be to generate leads IMHO. It must be more than just about being “social”. There must be an actual point to your campaign.

    Furthermore, before taking the route of beefing up social as part of a lead generation strategy, what are you doing with other areas to generate leads via digital marketing channels? Email is such an under utilized lead generation resource.

    No matter the digital channel (website, email, FB, Twitter, live chat, etc) credit unions must recognize the need to generate leads for loans and new accounts in a digital world.

  6. James, running this kind of promotion through a third-party app isn’t going to help this kind of promotion comply with Facebook’s rules. Facebook explicitly states that you cannot make the “Like” button an integral triggering device in your promotions, which is impossible to circumvent with something called a “Like Loan.”

  7. Thanks for your feedback and I completely agree @JamesRobertLay. Many people believe the myth that email is dead. LIES! I recently did a survey of our Gen Y members here at the #1 channel they indicated for us to communicate with them is email. We are also trying to be more strategic email marketing.

  8. Good point Editor. I was just referencing that third party applications could be used to assist with the promotion. While the “like” button could not be used as part of the promotion/contest according to FB TOS, the promo/contest could be created to where one must like the page first before having the opportunity to participate in the promo/contest.

    A common practice implementing this idea would be to use a “like gate”. While FB no longer allows you to use a “like gate” to view the page (facebook.com/cuname), a “like gate” can still be used to reveal tabs.

  9. Glad to hear you guys are looking to be more strategic with email… especially with your Gen Y findings. This webinar I recently gave may give you some additional insight as you are looking to be more strategic with your email and digital communication.

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