One of the problems that financial services companies have with social media is controlling the message and brand image. As with any other highly regulated industries, using social media has compliance implications with strict guidelines on what can and cannot be said. This leads some companies to limit their activity to standard messaging, removing any opportunities for genuine engagement with influencers, followers and customers.
I know there are many compliance and legal teams that would rather their company just didn't do social media, and therefore avoid the headache that it can cause. However, the problem with just not doing it is that financial service companies cannot control what other people are saying about them on social media.
It's easy for someone to slap a hashtag in front of a company name and suddenly everyone is adding their two pennies worth. Therefore, in my view, it makes better sense to get a robust social media and engagement strategy in place, and take control of the messaging and brand.
Social Media Strategies For Financial Services Firms
To get engagement right I believe that social media strategies should not only be developed alongside compliance and legal teams, but there should be an on-going partnership between all parties.
Too often compliance and legal are viewed as obstructive, preventing marketing and communication teams from interacting in an authentic way on social media. A common criticism of many companies is that they do not respond quickly to customer requests and complaints. In many cases this is because those who look after digital channels are waiting to be told what they can say. Social media managers need to be able to respond quickly to online interactions - requests for information, complaints or positive comments - customers expect real-time responses.
However, when there is a willingness to work together - where compliance or legal understand the need to provide answers quickly, and to respond with creative solutions rather than putting up barriers to engagement - financial services companies have an opportunity to deliver excellent customer service and differentiate themselves from the rest.
Those companies that get it right have systems in place that speed up this process. These include:
• A governance structure for all social media programmes.
• Open lines of communication between compliance and marketing.
• Comprehensive social media policies that educate and help employees respond and engage in real-time.
• Social media monitoring to ensure that companies know when they're being talked about, and can help identify trends and opportunities for engagement.
• Innovation programmes that explore ways to integrate products and services with social media, and opportunities for new product development.
Responding to customers on social media in a timely and relevant way has also been proven to increase both customer satisfaction and revenue. A study conducted by Twitter shows a direct correlation between responsiveness and willingness to spend.
Twitter looked at data from the airline, restaurant and telecoms industries, and how companies responded to customer interactions, customer satisfaction scores and revenue potential. Twitter found that "when a customer Tweets at a business and receives a response, that customer is willing to spend 3-20% more on an average priced item from that business in the future".
Responsiveness appears to drive revenue. Twitter also found that in the telcoms industry, customers are willing to pay $17 more per month for a phone plan if they receive a reply within four minutes, but are only willing to pay $3.52 more if they have to wait over 20 minutes.
Those in financial services might expect to replicate similar results if they can put into place systems that allow a rapid response to customer interactions. Consider too how inexpensive social media is compared to responding via a help desk.
Using social media in a crisis
Furthermore, social media can be part of the company's crisis incident management and disaster recovery planning. When phone lines are permanently engaged, websites are down and customers are desperate for reassurance that their financial and personal data is safe, they turn to social media.
Managing the brand's reputation is critical and therefore social media strategies should be clearly defined in a crisis. Tools such as PwC's Social Observatory can be invaluable for this, helping companies identify content that relates to them and then take rapid steps to diffuse negative situations.
Financial services companies cannot afford to overlook social media because it is challenging. Customers are on social media. They want - and will - use social media to communicate, and therefore companies must be prepared to communicate on these channels too.
In turn financial services and other companies can reap the benefits of social media; raising brand awareness, building customer loyalty, reaching new customers and innovating within the sector.
If you don't, someone else will!