Financial institutions can — and should — promote their products in social channels. They should also use their social promotions to build a valuable email marketing database. Guest contributor Jason Falls lays out the math for both models.
By Jason Falls, Founder and Chief Instigator, SocialMediaExplorer.com
Most financial institutions have an email marketing program these days. It might be focused on customer acquisition, retention or cross-selling. Whatever the case, you know that for every 100 emails you send, a certain number will take action and follow through with your offer. So the logic becomes: (1) Add more addresses, and (2) convert at the same rate (or better), and you will drive incremental revenue.
But for some reason, banks and credit unions seem to think social media is somehow different — a marketing anomaly where different rules apply. Many financial marketers believe the “purists'” assertion that you can’t or shouldn’t use social for selling. That’s total B.S. Not only can you (1) drive revenue through social media directly, you can also (2) leverage social channels to acquire more of those precious email addresses you need for your tried-and-true email marketing programs.
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1. Driving Direct Revenue Through Social Channels
Let’s say your big push this month is Certificates of Deposit. You send your email to 25,000 recipients. 1.4% convert and get their CDs. Assuming they bought at least a $2,000 CD, that’s $700,000. Good work.
Now you turn to your social channels. Assuming you’re doing a good job of engaging your audience with informative or entertaining content regularly enough that you’ve earn their permission to “sell” — infrequently, and in the right way — you decide to post a CD offer to your 20,000 fans on Facebook. Remember, these fans are likely already your customers and aren’t necessarily on Facebook to do business, so let’s conservatively estimate that 0.2% of them will convert.
That’s still 40 fans at $2,000 or $80,000. Now maybe that doesn’t sound like a lot… unless your sales goal was $775,000, in which case an email-only promotion would have left you $75,000 short.
It’s important to remember that your social media audience isn’t the same thing as your email audience, and they are different than consumers who find you through search engines. Facebook fans will convert at a lesser rate. That does not make them “bad prospects” or a marketing segment that’s not worth your effort and investment. Would you walk away from $75,000 in CD business from a single Facebook post? (If so, please stop reading now.)
Now granted, your institution may start out with more modest numbers than those used in the example above. Don’t worry about it, that’s okay. Focus on building your audience, and work to earn their all-important permission to slip the occasional marketing message into your otherwise engaging content. That may take some time, but once you’re there, you can push the same kinds of direct revenue buttons as other channels. Just realize conversion rates will be lower.
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2. Driving Indirect Social Revenue
Let’s say you’ve tried marketing directly to your Facebook fans and it just doesn’t work — you can’t get anyone to convert. But you know for certain that you can maintain a steady 1.4% clip with your response rate on email marketing campaigns. So your job now is to convince your social audience to give you their email address.
Sure, there’s a chance that this audience won’t convert any better from their inbox than their Facebook newsfeed. But logic and experience tells us that if they trust you enough to surrender some contact information, they are raising their hand and telling you they will likely convert at better rates.
There are a number of ways you can drive email sign-ups. You can ask them directly for their email address, and dangle a carrot. Tell them what’s in it for them, what kind of special deals they could receive, what type of exclusive content is in your e-newsletter if they sign up. If you are targeting business relationships, you could offer premium content like a white-paper or webinar that requires email registration. And of course you can conduct social media promotions and contests where email addresses are part of the entry method.
Remember: Whenever you ask for people’s email addresses, you have to give them the option to receive promotional emails or not. Always provide an opt-out (or opt-in) checkbox. You might tell them they can unsubscribe at any time, but make the content you’re going to deliver is so awesome that they should at least give it a try (and then you’re content had better actually be awesome).
When you’re using social media to harvest email addresses, you should judge your success based on the number of contacts you accumulate and the number of leads you generate instead of how many products/services you sell.