Social Media: Hype or a Financial Services Reality?
By Brad Strothkamp, Vice President, Principal Analyst – Forrester Research
No topic has straddled the chasm of hype versus ROI as social media has done. The last few years have been a never-ending array of social media success stories as well as pundits questing the validity and value of the social area. The financial services industry is increasingly playing a role in the social space, and the last two years have also provided clarity to its value.
Like other industries, the majority of efforts in the financial services social space were initially focused on marketing. But as it has grown more widespread, at least four areas have shown promise for social outside of pure marketing:
- Product development and innovation. Who better to ask about new product development or product enhancements than existing customers who own and use the product? Firms such as Chase tap social communities to drive product innovation that starts with the customer are using social very effectively.
- Community support. While financial decisions may be a personal activity, the path to these decisions is often steeped in social with segments like investors or small businesses looking to one another for peer comparisons and best practice sharing. American Express, TradeKing, and most recently E*Trade are using closed communities to drive service utilization and segment engagement by getting customers to interact with each other in the social space.
- Customer service. The bread and butter of online strategy for financial services firms have traditionally been customer service, and that aspect is seeing an opportunity in the social space. Twitter can be a hotbed of customer concerns and questions, and a litany of financial services companies are listening and proactively helping these clients. Wells Fargo and Citibank have been leaders here in proactive outreach customer service strategies via Twitter.
- Online sales. Recommendations from family and friends play a key role in how consumers start the process of choosing a new provider. Social has a logical role here as social is about sharing experiences with family, friends and likeminded individuals. This role is being played at a macro level via customer ratings and reviews that are gaining traction in financial services. USAA has been a leader in this space by harnessing the good will that exists among its member to win new ones.
The area of social media will continue to evolve in financial services, and I am thrilled that I’ll be presenting at the Intuit Financial Services Conference this fall on the topic with a focus on USAA’s social story and its tangible results. In order to make my presentation as relevant as possible, I welcome any and all feedback on the types of questions you’d like to see covered. Those questions can cover anything from process to execution including questions around gaining executive support, tying social strategy to the business strategy, and developing effective measurements.
To join the conversation, visit In:Volve.
Vice President, Principal Analyst, Forrester Research
Brad serves eBusiness & Channel Strategy professionals. He is a leading expert on eCommerce/eBusiness strategy development within financial services, as well as on best practices of financial firms for selling to and servicing online consumers. He does extensive research on how consumers use the Internet to research and purchase financial products — regardless of the channel — as well as the seamless cross-channel customer experience financial firms need to develop and deliver in order to maximize sales.
In his research, Brad covers such eCommerce and finance-oriented topics as the use of interactive help technologies (including online chat), the use of analytics to drive site development decisions, the ways in which financial services customers make product decisions, the role the Web plays during the product research process, and case studies and industry rankings of leaders in financial services.