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Wednesday, August 28, 2013

Social Media Is Still a Worthwhile Investment for Banks

by Beth Youra

This post is part of Gallup's ongoing series on the shifting landscape for financial institutions. It provides insights into channel optimization, emerging customer behaviors and preferences, product penetration and relationship growth, engaging the most critical affluent and business customers, and reshaping banks' overall value proposition.

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Many banks have established a social media presence over the past few years, but in reality very few customers are currently using social media to interact with their banks. Gallup’s recent U.S. Retail Banking survey found that only 10% of bank customers used Facebook or Twitter to interact with their bank in the last six months. Most customers still use traditional channels, like ATMs and branch lobbies to conduct their business, although online banking isn’t far behind.

Of those customers who use social media to interact with their bank, just over half (52%) said they were “extremely satisfied” with their Facebook or Twitter experience. Customers who use ATM, branch lobby, online, or mobile channels are at least somewhat more likely to say they are extremely satisfied with their experience using those channels.
However, you shouldn’t give up on social media just yet. While only a small percentage of your customers are using social media to talk with or about you, these customers are highly desirable as far as demographics are concerned.

Social media users are more likely to be:
  • Young: The average age of a banking social media user is 33 years, whereas the average age of a non-user is 46. As such, social media users are also more likely to be single and are more likely to have young children at home. 
  • Male: More than half (59%) of the people using social media to interact with their banks are male. Traditionally, males have been a difficult demographic for advertisers to reach, but social media gives banks a valuable opportunity to interact with this group.  
  • Affluent: Social media users tend to carry healthier balances in their deposit and investment accounts than non-users. They are more likely to belong to the Mass Affluent (more than $100,000 in investable assets) segment that banks covet. 
  • Revenue Generators: Social media users generate $2,528 in revenue with their primary bank per year versus non-users who generate $1,262.
The customers who are interacting with your bank on social media are among the most valuable, but also some of the hardest to reach. These are customers who love to buy, but hate being sold to. To truly connect with your customers on social media and increase channel satisfaction, you should focus on four critical components:

  1. Personality -- Avoid using marketing speak and directly promoting products and services on Facebook and Twitter. Make your messaging personable and conversational. Offer advice and foster a sense of community.  
  2. Availability -- Respond to customers in a timely manner, no matter what time it is. Social media is 24/7, and your response times should make it convenient for customers to interact with you. 
  3. Consistency -- Ensure customers receive the same messaging across all channels, online and offline. Educate all employees on what’s being said on your Facebook and Twitter accounts and train those employees who work with your social media accounts on the products and services that appeal to your affluent and young customer base. 
  4. Responsibility -- Listen to what your customers are saying on Facebook and Twitter and respond accordingly, especially when they are saying something negative about your bank. Ignoring or dismissing a customer’s complaint can cause further problems, whereas responding in a timely and courteous manner shows them you care and are taking accountability.
Nearly every marketing department in every bank wants to have a social media presence, but creating a successful online community is hard work. If you want customers to interact with you through Facebook and Twitter, they have to see your social media presence as genuine and well-intentioned. It can be time-consuming to create this type of online community, but it is worthwhile. The customers who follow you on social media hold too much promise to be ignored.


Cathy said...
September 30, 2013 at 5:06 AM  

I agree that social media is one of the most powerful marketing tools in use today. Like you say in points 4 and 5, it is especially important to respond personally through these public channels when a customer is having problems with products or services

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