Financial services puts social media ROI in their sights

The financial services industry, in general, has struggled to apply social media to marketing strategy. Really good examples of social retention strategies are hard to find and many financial services companies still seem to think that having the PR team periodically update an uninspiring Facebook page is enough to check the box on social.

Part of the challenge has been demonstrating the ROI for social media in a world where “likes,” “followers” and Kred scores offer an interesting perspective but don’t provide the justification for significant investment. That has all changed according to research in Mintel’s recent report on “Social Media and Financial Services” which found that social media engagement can help drive customer satisfaction for financial services companies.

The report compares those who are and are not comfortable with brands interacting with them via social media. The 36% of US consumers who are comfortable with brands interacting directly with them on social channels are significantly more likely to be satisfied with their financial services provider across a range of factors including the branch, ATM, website and mobile app. In other words, a proactive social media strategy is critical because the more you can get your customers to engage with you on social media, the more satisfied and loyal they are likely to be.

Social media isn’t new but it is more important than ever in 2015. Here’s why:

1) Social = mobile: The increased penetration of smartphones during the past few years has fueled the growth of social media – a recent Pew Research Center study (2013) found that 40% of cell phone users engage with a social media site on their phone and 28% do so on a typical day.
2) Mighty millennials: The millennial generation, who invented social media and embraced it, is ageing and has expanded to become the largest generational group at 24.6% of the US population (Marketing to Millennials US 2015 report).
3) The power of negativity: The “negativity effect” refers to the tendency to assign more weight to negative information than positive information and, with more consumers reading reviews than ever before, it has become critical for brands to manage their online presence. Around 51% of millennials say they look for customer reviews before making a purchase (Marketing to Millennials US 2015 report).

These factors provide the context for the decision, last year, by Wells Fargo to launch a social media “war room” or “command center” with a dedicated staff trained to monitor and respond to the 1MM+ mentions that Wells Fargo has to contend with each year, not to mention the thousands of pieces of social media content that the bank proactively publishes during a typical quarter. In launching a command center, Wells Fargo joined Chase in being one of only a few companies in the financial services sector to make such a significant investment in social media.

Consumers are mostly interested in using social media to read customer reviews, gain access to personalized discounts, and stay updated on financial news, but financial services companies should look to understand where the additional opportunities may exist for their customers. For example, 20% of social media users said they would consider using social media to get assistance with their account and 17% said they would get on social media to get access to a financial advisor.

Consumers want to interact with financial services companies via social media and those that can proactively address that need will gain a competitive advantage. Now is the time to ramp up investment in social as those that can’t will fall behind and those who are slow off the mark will be playing catch-up as mobile adoption continues to drive rapid growth in 2015.