According to a Banking My Way article titled Credit Unions Reach Out, Strike Out on Twitter:
“A recent study from IBM shows that 68% of banking executives are unprepared for new communication technologies like Twitter, suggesting that credit unions risk losing customers to larger banks that do a better job of engaging customers in social media. Again and again, studies show that bank customers want to engage in social media, but attracting Twitter followers has proven more frustrating than most credit union marketers had anticipated. The takeaway? Big banks, which seem to do a better job at the social media game than credit unions (and with much larger budgets, why shouldn’t they?), have a big advantage over credit unions.”
My take: The author of the article is misinterpreting what’s going on:
1. Credit unions don’t risk losing “customers” to larger banks. The statement “credit unions risk losing customers to larger banks that do a better job of engaging customers in social media” is ridiculous. If credit union members aren’t engaging with their own credit unions (for proof of that, see the Financial Brand article Credit Unions Struggle With Twitter, One In Five Abandon Accounts), then why would they be engaging with larger banks?
2. Bank customers may want to engage in social media, but not necessarily with banks. According to a study done by the Financial Brand, nearly half of the top 400 banks had less than 200 Twitter followers. Looking at it from a different angle, the study found that less than half a million people follow a bank, or about one-half of one percent of all Twitter users.
3. Big banks don’t do a better job at the social media game. How the author of the article came to the conclusion that big banks “seem to do a better job” and that “with much larger budgets, why shouldn’t they?” is beyond my comprehension. The research I’ve done is getting a bit dated, but in the survey I conducted in Q3 2010, the banks I surveyed were spending such a small percentage of their marketing budget on social media that it wasn’t even measurable.
Unfortunately, the Banking My Way article, like too many articles like it, fails to address the more important question:
For what marketing purposes is Twitter good for?
You can argue all you want with me on this, but I will remain steadfast in my belief that there are four potential marketing uses for Twitter: 1) Awareness; 2) Consideration; 3) Preference; and 4) Engagement. (I would argue, too, that engagement is actually just a way of creating awareness, generating consideration, or influencing preference).
- Is Twitter good for creating awareness? By definition, no. Consumers choose to follow a bank or credit union. They can’t follow one that they don’t know of.
- Is Twitter good for generating consideration or influencing preference? Maybe. But there are a few problems in trying to answer this question. First, attributing ultimate consideration or preference to a tweet or series of tweets is a nearly impossible task. Second, the channel isn’t nearly mature enough for any one to really know what kind of tweets are more effective at generating consideration or influencing preference.
- Is Twitter good for engaging customers and prospects? Possibly. I’m actually inclined to answer “yes.” But with so few people following and connecting with their banks and credit unions, the potential value of the channel to engage consumers is untapped.
Bottom line: Banks and credit unions simply risk nothing by not using Twitter for their marketing purposes. Statements like “you’ll be left behind if you’re not on Twitter” are stupid, and marketers who say stuff like that should have their marketing licenses revoked. Oh wait, any idiot with access to social media can claim to be a marketing expert (after all, I do).
The notion that credit unions risk losing out to banks is ridiculous. The most effective marketing campaigns that credit unions have seen in the past 18 months were executed by non-credit unions: The Bank Transfer Day Facebook page by some woman in California, and the leaked announcement from Bank of America regarding a $5 monthly debit card fee.
Credit unions own efforts — whether through Twitter, other social media channels, or other marketing channels altogether — haven’t been nearly as effective.
Bank and credit union CEOs need to start asking their CMOs: Is Twitter really the best use of your department’s time and resources?
I can’t imagine the answer to that question is yes.
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