Ever since I began writing this column, social media has played a significant role in its content. From ways in which advisors can best utilize social media in compliance with the new FINRA rules, to tips on how to make the most of the time you spend on such activities, I have covered a breadth of material regarding this new sector of marketing.
But throughout all of the coverage I’ve given social media, I have continued to search for proof that it actually works—real, hard numbers showing the success (or lack thereof) of marketing through social media platforms. Despite all of the media attention and growing popularity Facebook, Twitter and LinkedIn have garnered, there is surprisingly little research on their success rates.
One likely culprit for this lack of quantifiable proof is sure to be the debate over how to define social media’s “success.” Is it how many “fans” a Facebook page has? The number of visitors or commenters to a blog? Or is it more profit-based, such as the number of clients you have added in accordance with your social media efforts that quarter?
I recently came across a firm that is not only measuring what works and what doesn’t in the social universe, they are monitoring it within the financial sector.
At the beginning of this year, Media Logic, a marketing firm that has worked with big-name financial institutions for years, monitored all social media activity (including Facebook pages, blogs and Twitter streams) of 35 financial institutions. The firms they observed ranged from small banks like Citizens Bank to large institutions such as Citi Bank and Bank of America.
To preface, this research isn’t perfect. First, Media Logic defined “success” as a combination of the number of people who were fans of the company’s Facebook page, how many followed its Twitter stream and the implied activity of its blog. This may or may not be how you prefer to measure success of your social media actions.
Second, Media Logic did not monitor small independent advisory firms, focusing instead on banks and financial institutions large and small. Hence, for some of you, this information won’t be specific enough for you to utilize, though I did touch on which strategies would be best for such firms (more on that later).
That said, this is the most comprehensive research I have found on the topic so far.
To begin, Media Logic identified six types of social media strategies that financial institutions are using right now:
Brand Engagement Forums: These are open forums in which the company says, “Hi, we’re the brand, be my buddy,” either through a company Facebook page or Twitter stream. They provide little or no incentive to interact with the company, other than simply coming aboard the company ship.
These forums are almost universally disasters, says Ron Ladouceur, executive vice president of Media Logic. “Large institutions can’t fake being small. There was a tendency in 2009 for large banks to try to humanize themselves by posting Facebook pages or having a chatty Twitter stream, and those that did ran into a tremendous amount of consumer anger. People lost a lot of money in 2009 and then there was a big backlash against the bailouts, and hence the large banks were brand-challenged. Them saying, ‘we’re your buddy,’ drew nothing but negative and violent comments.”
One exception to this disaster is small firms that are local enough to be embraced by the community as a peer. Small independent advisory firms, for example, often have enough of a connection with the local community to succeed with this strategy. In order to build their brand identity, they should be sure to include plenty of community keywords—such as names of cities, towns and local establishments—that will help boost their searchability by members of the community looking for a new financial advisor.
News feeds: These are forums that allow zero consumer engagement. Think of Facebook pages that don’t allow comments or Twitter feeds that are used strictly for PR announcements.
After seeing the negative comments customers posted to their brand engagement forums, many companies switched over to such news feeds. While there is little downside to this type of social media use, it misses out on one big opportunity. “They’re not taking advantage of opportunities social media provides for engagement and remarketing,” Ladouceur says. “You get no networking effect, besides the news media that follows it.”
Reputation management forums: These forums operate under the idea that you can have a dedicated group of customer service reps monitoring your online reputation. With this tactic, if clients say negative things about your firm, the customer service reps can immediately get in touch with that client and manage the problem. Firms can then tout the fact that they served and fixed the problem on their Facebook page.
While these are mostly fine, they look a little desperate,” Ladouceur says. “People may think you must have a lot of crummy services and products if you have to devote customer service representatives to patch your leaks.”
Special interest forums: These are forums that provide individuals with a reason for engaging with the firm. One financial firm that has successfully implemented this strategy is SunTrust, which launched a financial literacy website that the company sponsored. The site gave customers a reason to join the site, providing them with immediate benefits for doing so. Something as positive and helpful as financial literacy reflected positively on the SunTrust brand.
“These are almost universally successful strategies,” Ladouceur says. “The real successful ones reflect a core value, mission or brand ideology. It helps with building a brand, goal awareness and authority.”
Named sponsorships: These are simply online sponsorships of events companies already sponsor offline, such as a city marathon.
While these can be popular social sites, Ladouceur says, they won’t do much more for your brand identity than putting banners up at the race would.
Social promotions: Whether sponsoring a contest with prizes or launching a nationwide search for grant nominations (think the Pepsi Refresh project), these are ways to encourage fun engagement with your customers.
This strategy can be extremely successful, as it gives clients a reason to join in on the fun. Ladouceur warns, however, that in order for this strategy to work, the brand must have a significant marketable presence.
“Whereas the special interesting forums can be a way to build a brand, those social promotions require having a solid social strategy online already,” Ladouceur says. “You cant just launch [a contest like this] in social space; you need to have a network of trust already established that you can send a direct message to.” In essence, you need an audience.
To sum up, social media activities that encourage user interaction and provide an immediate benefit to its users are almost always more successful than simply posting marketing announcements on a Facebook page or Twitter stream. This means getting back to the drawing board and being creative in how you can implement user-friendly and user-engaging social media strategies into your marketing plan.