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Financial Services

4 Social Media Strategies for Business Success

Financial Services

4 Social Media Strategies for Business Success

The financial services industry has reached a crucial crossroad in its adoption and use of social media for the enterprise. For banks, wealth management firms, and insurance companies, the question to answer is no longer "Should we use social media?" It's "How do we use social media to achieve our business objectives?"

There is no slowing down the momentum of social media. Across every industry, social media has given customers unprecedented influence and control. The world of banking and finance is no different, despite the cautionary approach taken by many organizations toward social media due to regulatory guidelines and compliance concerns.

Consumers of every age--from Millennials to Baby Boomers--eagerly take to social media networks to share their experiences, both negative and positive, in dealing with your organization, products, and services. They seek out information on social media networks before making decisions about which financial institutions to do business with. These consumers are shaping perceptions of your brand through their comments, posts, and likes--whether you know it or not.

In addition, customers of banks and other financial services organizations demand convenience. They expect service when and where they want it, using the devices and channels of their choice, which often means social media and mobile. If they send a tweet to your bank asking for help, they expect a quick response; if they post a comment on your organization's Facebook page, they expect it to be acknowledged. Edison Research found that 32 percent of respondents who have ever sought social customer service expect a company reply within 30 minutes, and that 42 percent expect a response within 60 minutes.

Clearly your customers want to connect with you using social media. According to NM Incite, a joint project of Nielsen and McKinsey, nearly half of all social media users have used social media for customer service. There is a clear market mandate for the finance sector to embrace social media in order to listen to what their customers are saying, to provide stellar customer service, to gain valuable insight into customer behavior, and to promote and protect their brand. But social media is not just marketing's job anymore. Social media today requires integration of at least Marketing, Compliance, IT, Sales, and Customer Service. All business units need to be on board because everyone has an important role to play.

This paper outlines the four strategies you must put in place across your organization for social media to make a measurable contribution to your business success, while ensuring the security and compliance of your efforts. To execute these strategies you need to have the right social relationship platform. The time to act is now; the socially focused financial services institution is inevitable, according to Deloitte, and companies that take social media action can gain business advantage.

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Don't Let Compliance Hold You Back

By now, most financial enterprises have at least experimented to some degree with social media. More advanced organizations are already using social media on a regular basis as an integrated component of their communications efforts. Yet others in the finance sector have held back from social media. These organizations may understand and desire the business benefits social media can offer, but are afraid of making mistakes that could damage their reputation or result in negative financial consequences. It's no surprise that security and compliance top a financial organization's list of fears.

In the financial services industry, FINRA conducts regulatory audits to examine a company's social media accounts and policies for communicating on social media channels. The association's auditors check who is authorized to post on social media and what your firm is doing to ensure compliance. Each regulatory body has its own requirements--SEC, FSA, IIROC, SarbanesOxley, and others. Executives are also concerned about the security of social media accounts and leaking confidential information. How does a financial services company create the perfect balance between giving consumers what they want and meeting regulatory expectations?

Fortunately, security and compliance concerns are no longer reasons to avoid social media. Today, large and small companies in the finance industry are using robust social relationship platforms to mitigate risks, ensure compliance, and confidently engage in social marketing, selling, and customer service. For example, Hootsuite has built-in compliance features to prevent your company from posting social media messages that could violate regulatory guidelines, along with security features to maintain control of your corporate social media accounts. A social relationship platform isn't simply a convenient way to manage social media, it's the foundation of your ability to execute an effective and compliant internal and external social media strategy.

Locate Your Organization on the Social Media Maturity Scale

Social media adoption and acceptance vary greatly from one financial services company to another. The first task before executing a social media strategy is to take stock of where you are today on the social media maturity scale. Then you can understand where you need to get to in order to achieve your business goals.

Where is Your Company on the Social Media Maturity Scale?

Social Advocate Individual control Siloed efforts Little or no budget Outward facing social media Focus on building social media presence Ad hoc tools

Social Teams Departmental control Siloed efforts Challenging to justify budget Outward facing social media

Focus on building social media presence Ad hoc tools or social relationship platform

Social Organization Centralized control for entire enterprise Integrated social media strategy Budget supported by data and measurable ROI Outward facing social media along with internal social collaboration Focus on achieving business objectives

Social relationship platform

FINANCIAL SERVICES: 4 SOCIAL MEDIA STRATEGIES FOR BUSINESS SUCCESS

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Four Social Media Strategies for Business Success

To achieve social success build a foundation based on these four strategies:

1. Audit and Streamline Your Social Media Presence

Start by auditing and taking control of your existing social media presence. It may be larger and more fragmented than you realized. According to the analyst firm Altimeter, the average enterprise has 178 owned social media accounts across at least 13 different departments. Social media often starts at the business unit level as divisions create their own social media presence. In addition, new and existing employees open new social media accounts all the time. If your organization has grown through mergers and acquisitions, there could be multiple social media accounts operating under different brand names.

Most companies don't keep an overall inventory of customer-facing profiles, and security measures may vary department to department. All too often IT is called on to authorize or deauthorize users and accounts, putting an undue burden on an already overworked department. These are just a few of the reasons you need centralized ownership of social media profiles. Ownership includes centralized account provisioning, a multi-layered permission system for publishing, checks for regulatory compliance, and archival of public and internal social messaging to meet retention and retrieval requirements for your firm. Archiving of social messaging, if performed manually, can be extremely resource intensive. You can save time and resources by working with a vendor, such as Hootsuite, that provides an automated service.

Until you have this foundational strategy in place, your organization faces security risks and potential violations of industry regulations. Your brand and reputation are also vulnerable if users post inappropriate messages on social networks or customers make negative comments you don't know about or respond to appropriately.

2. Establish a Unified Social Strategy Across Your Organization

YYou've taken control of your social media presence. Now you must establish a unified social media strategy across your organization. This is a company-wide

initiative involving Marketing, Sales, Customer Service, Human Resources, Compliance, and IT. Why all these departments? Because each department must contribute to the processes you need to be compliant and successful with social media, and each department can use social media data to improve efficiencies and achieve business objectives.

Marketing can listen and engage. Sales can elevate their status to be trusted partners to prospects and customers. Customer Service can respond in fast, convenient ways to inquiries. Human Resources can recruit. Compliance can sanction social media activities. IT can ensure your social relationship platform fits within your applications ecosystem and will scale as grow across teams, departments and regions.

It's important to note that your Compliance and IT teams belong at the table from the start. Their voices and recommendations, as well as their adoption and use of social media, are as essential as those of your frontline social media practitioners who have specific and relevant use-case experience.

You may not be able to fully formulate your outwardfacing social media strategy until you spend time listening on social networks and evaluating what you hear. What is being said about your brand, industry, and competitors? Who is talking? Where are they talking? Why are certain industry topics trending?

For instance, a retail bank may want to tag references to interest rates, fraud protection, online banking, and customer service. A social relationship platform gives you the ability to filter through and categorize any volume of incoming messages. You will be able to identify opportunities for engaging your customers and the market through social media. Here's another example: A bank may discover general customer dissatisfaction with the banking capabilities offered through social media, and the bank could launch an initiative to stand out from competitors in this area.

Chances are, if you have any social media presence at all, consumers are directing inquiries and comments your way. You should formalize processes for receiving, sharing, and responding to customer messages. Should a salesperson take it? Is it a customer service question? Does it require a subject matter expert, or can a marketing associate formulate an appropriate response? Consumers don't expect a generic response,

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but instead a personalized, meaningful response. You can deliver one if you have integrated your organization around social media and put the appropriate processes and workflows in place. With every relevant and timely response your team delivers you increased opportunities to earn new customers and build loyalty from existing customers.

3. Identify Relevant Metrics and Apply Social Analytics

All business initiatives should be directly related to business goals. Social media is no exception. For example, if one of your organization's business goals is to increase the dollar value delivered from each customer, one of your social media objectives might be to educate customers on different types of loans. An insurance carrier that wants to recruit more independent brokers might use social media to converse with brokers about best practices for working with multiple carriers. A wealth management firm might use social media to educate consumers on the different types of investment products or to provide information on saving for college. Any financial services firm would want to improve customer service by responding faster to customer inquiries coming in through social media channels. These are all viable business goals that can be supported and measured through social media.

Focus on developing social media objectives that serve your business goals. Then, you can assign metrics and measure the success of your social efforts. Naturally you will want to track your reach and brand visibility by counting likes, mentions, shares, retweets, follows, and other social media metrics. However, true social analytics are tied to business goals, such as revenue, customer loyalty, and other strategic targets. Important customer care metrics through social media might be response times, time to resolution, and number of case resolutions through a specific social channel.

A social relationship platform gives you end-to-end tracking of your social media audience--where they came from, what they click forward to, what interests them, and what doesn't. You will learn what messages resonate with your audience and how visitors interact with your content. You will gain intelligence to help you optimize programs, hone your message, and invest in social media promotions that deliver the highest return.

4. Educate and Empower Your Team

An educated workforce well-trained to be social media ambassadors is not just a competitive necessity but a regulatory one as well. To develop policies and guidelines for social media usage and compliance, assemble a cross-functional team that meets the needs of all stakeholders from every department. Part of the educational component should focus on workflow processes around permissions and approvals, while another part should focus on using social media effectively to achieve business goals.

For example, you will want to train users on how to avoid setting your organization up for criticism and attacks from consumers. There have been a number of high-profile cases where financial institutions have hurt their own brands through misguided attempts to use social media. Most financial industry professionals remember the ill-fated #AskJPM hashtag. JP Morgan Chase tried to host a Twitter discussion with vice chairman James B. Lee Jr., but got bombarded with vitriol and negative comments from unhappy customers. An educated team could have avoided such a fiasco.

It's likely your team of social media users will continue to grow, requiring you to stay on top of ongoing training efforts. External certification programs such as the one offered by the S.I. Newhouse School of Public Communications and Hootsuite can provide a formal framework for social media training. Certification programs make it easier to keep all employees up-todate on their social media skills and help your firm scale up its social activities more rapidly.

To learn more and enroll your team in the Newhouse-Hootsuite Advanced Social Media Strategy Certification, visit newhouse.

Remember that social media policy is not about censorship. It's about defining the parameters in which you can succeed. Employees will embrace coherent, common-sense guidelines, whereas they will reject confusion and inconsistency. Even top executives need and want to be trained. Educated executives can be high-profile leaders of internal social initiatives and can also be your best brand ambassadors on external social media.

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Banking

Wealth Management

According to Gallup, customers that use social media to interact with their bank are 12% more likely to be mass affluent ($100K to less than $1M in investible assets) and 18% more likely to be emerging affluent (age 35 or under with incomes over $75K/year) than typical bank customers. They are also more likely to hold positive attitudes toward their banks. In other words, social media users are likely to be valuable bank customers.

Banks that understand this phenomenon are beginning to progress beyond using social media as a customer engagement tool. They are starting to collect social media data for marketing insights such as what products and services to offer and which social media networks to use for targeted advertising. Banks can listen to customers' social media posts to learn about product needs and preferences, even to pick up on buying signals. Sentiment analysis, content tracking, and crowdsourcing can turn everyday engagement activities into actionable intelligence. To achieve this level of social media maturity requires a social relationship platform to collect and analyze the data, as well as to produce the necessary insights to support decision making.

In addition to social marketing and selling, social customer service is a natural fit for banks. Research by NM Incite indicates that social media is the most costeffective way to conduct customer service. Customer care through social media costs less than $1 per interaction, compared to $6 for telephone and $2.50$5.00 for email per interaction. The key is to implement effective customer care processes and have in place a social relationship platform to ensure messages are routed and responded to in an appropriate and timely manner.

Many wealth management firms have been reluctant to use social media because of the liability and reputational risks stemming from erroneous or inappropriate postings. This hesitancy has slowed the learning curve of some wealth management advisors. With younger advisors slowly replacing retiring industry veterans--and younger clients entering the investing world--social media is making inroads as a legitimate sales and communication channel within the profession.

A recent survey by Accenture revealed an erosion of investor trust in financial advisors. The survey also uncovered opportunity for financial advisors, who can improve relationships using social platforms to forge deeper, stronger relationships with clients and recruit new clients. Forty percent of financial advisors said they had acquired new clients through Facebook, 25 percent through LinkedIn, and 21 percent through Twitter. The same survey found that internal social networks helped financial advisors connect with in-house experts to answer complex customer questions.

The objective for asset managers and financial advisors now is developing an effective and sustainable strategy to reap the business benefits of social media. To date, the extent most wealth management firms have gone to is using only basic tools to monitor what employees are saying on social media in order to avoid compliance issues. However, wealth management firms that haven't fully embraced social media run the risk of losing their relevance in a world where brand image and reputation greatly depend on client-generated reviews and content. What's more, the lack of online visibility can equate to missed opportunities for turning negative perceptions or service issues into business wins and loyal clients.

Customer Care Costs

With proactive planning and a strong social media foundation, as well as a wise investment in a social relationship platform, wealth management firms can minimize online risk, better nurture client relationships, build credibility, and secure a sustainable competitive advantage.

Social Media

$1

Email

$5

Phone

$6

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Insurance

The insurance industry is ripe for social marketing and selling. Brand awareness and perception are important drivers of insurance buying, and social media offers a multitude of brand-building opportunities for an insurance firm; for example, educating consumers about teen driving, identity theft, fire safety, healthy living, or any other of a multitude of topics related to insurance needs.

At the individual agent level, the ability to filter locally and listen to what customers are saying on social media can drive significant benefits in terms of fostering customer loyalty and acquiring potential leads. Think of all the information consumers publish on social networks: a marriage announcement, the birth of a new baby, the purchase of a new home, questions about buying a car, and many more. All of these important events can be related to insurance needs. The agent that knows about them can reach out with curated content from Marketing to deliver the right message at the right time using social media. Moreover, the ability to geo-target messages to specific towns or regions helps enables agents fine-tune messaging and filters through the large volume of social media messages. In addition to geography, targeting messages by demographics such as age, gender, relationship status, and other factors heightens relevance and promotes a personal touch.

Embrace Social Media with Confidence

By implementing these four social media strategies, you can establish a secure, compliant foundation for using social media to meet business objectives and gain an advantage in the financial services marketplace. As you begin assessing your current social media presence and efforts, keep in mind that social media's role in your financial services organization is destined to grow and contribute to your core business goals. With a common social relationship platform in place, you can confidently move forward and scale up your efforts.

Strengthening your brand and marketing products are not the only uses of social media in the insurance industry. According to the National Association of Insurance Commissioners, insurance companies are turning to social media networks to communicate with insured customers about claims and other pertinent information following a catastrophe.

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About Hootsuite Enterprise

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Hootsuite Enterprise empowers organizations to execute business strategies for the social media era. As the world's most widely used social relationship platform, Hootsuite Enterprise enables global businesses to scale social media activities across multiple teams, departments, and business units. Our versatile platform supports a thriving ecosystem of technology integrations, allowing businesses to extend social media into existing systems and programs.

We help organizations create deeper relationships with customers and draw meaningful insights from social media data. Innovating since day one, we continue to help businesses pioneer the social media landscape and accelerate their success through education and professional services.

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