Posts Tagged ‘Social Media’

Social Media Footprint - Social Media Coach

A significant change took place in April of 2011 in the world of Google, Bing and Yahoo search.

For the first time the top 3 search engines started to index you and your business based upon you participation in Social Media Platforms. Platforms such as…

Most of the big banks are using Social Media daily and have teams of people leading their Social Media Strategies. Twitter seems to be used by most for customer service, reaching out, answering questions. Monitoring what people are saying about their bank and brand.

Yet most of the smaller banks and credit unions say we can’t utilize Social Media because of FINRA. That’s an interesting comment since these big banks have a bigger target on their back them there smaller brethren. How does J.P. Morgan Chase do it? Citi? Wells Fargo? They have a Social Media Policy in place, and a small team of people who play by the rules.

It’s just an excuse to not engage with this new form of communication. In talking to CEO’s the #1 reason seems to be fear. Fear that someone will say something bad about their bank and brand. Got news for you…since the beginning of time people have communicated both good and bad about a business, product or service. Just so happens in Social Media, it spreads faster.

So…I ask this question. If someone says something negative about your bank or brand out in Social Media, how will you respond? Always a long pause. No one has yet to give me a clear answer because they are not out on Social Media Platforms. The financial industry as one industry insider said…late adapters. Maybe some will not adopt at all. It’s costing these banks more than they know, and the big just keep getting bigger, and with all these new regulations squeezing profits, they need to grow, not hunker down.

“Someone once said…If you don’t like change, you’ll like irrelevance even more.” – Anonymous 

In the offline world, customer service functions tend to live in their own expensive silos along with the specific product lines they support.

“I think that’s what frustrates a lot of customers.”  “They’ll call into a company and the first person they speak to will know a first piece of the answer, but then they’ll have to transfer them to get the next piece of the answer.”

But social media, with its cheap, flexible infrastructure, is a natural place to consolidate a brand presence and build a cross-functional customer support staff.

Social media “as a service channel is going to be widely accepted”-and soon.

“Now no one bats an eyelash about sending a business an email if they have a question or need additional information. I think in a few years from now, tweeting a question [to a company] or posting it on Facebook or Google+ is going to be the norm.”

Now’s the time. Jump in… the Water’s Fine in the Social Medial Pool.

Prepare1 conducts a series of workshops, and works with businesses, non-profits, and individuals to succeed with Social Media.

Check out some new upcoming workshops.

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It started as a Facebook event page on Tuesday, and now it’s grown into a national movement. Saturday (Nov. 5) was Bank Transfer Day (BTD), a deadline activists set for transferring funds from for-profit banking institutions into not-for-profit credit unions closer to home.

Bank Transfer Day

Bank Transfer Day

Organized by Kristin Christian, her Bank Transfer Day Facebook page has attracted more than 81,900 RSVPs for the event since Tuesday (Nov. 1). Why? Kristen Christian wrote on the Bank Transfer Day Facebook page’s FAQ:

Facebook Page for Bank Transfer Day

“I started this because I felt like many of you do. I was tired — tired of the fee increases, tired of not being able to access my money when I need to, tired of them using what little money I have to oppress my brothers & sisters. So I stood up. I’ve been shocked at how many people have stood up alongside me. With each person who RSVPs to this event, my heart swells. Me closing my account all on my lonesome wouldn’t have made a difference to these fat cats. But each of YOU standing up with me… they can’t drown out the noise we’ll make.”

What’s the result of these social media-fueled protests? According to the Credit Union National Association, “at least 650,000 consumers across the nation have joined credit unions in the past four weeks.” That mass influx of credit union customers was further ignited on Sept. 29, when Bank of America announced it would begin charging consumers a $5-per-month fee for debit cards. Bank of America has since retracted that rate hike because of the public outcry. November 5th has come and gone. What’s your assessment?

  • Two years ago it took 15 banks to control 50% of the asset’s in this country. Today…5 banks control 50% of the assets, while the remaining 7500 banks and 7400 credit unions control the remaining 50%.
  • The number of Credit Unions across this country continue in decline. Once peaked at 23,866 in 1969. Over the past 5 years we’ve lost over 1,000 Credit Unions. Credit Unions like banks, the big just keep getting bigger.
  • Membership among Credit Unions with less than $100 million in assets has declined according to the recent CUNA Profile. So, it will be interesting to see what asset class of Credit Union benefited from this movement.
  • In researching this issue with CUNA, here is their statement.  The growth is particularly noticeable at larger credit unions–those with $100 million or more in assets, CUNA President/CEO Bill Cheney said.  They account for about 20% of all credit unions, but serve about 80% of credit union members.

Banks hold $12,284,305 in assets according to the Federal Reserve Bank while Credit Unions hold $954,757 according to CUNA.

Total Bank & Credit Union Assets 2011

Total Bank & Credit Union Assets 2011

The beneficiary of this movement seems to be the big Credit Unions. Hopefully the small banks, and small credit unions can step up their Social Media Marketing to take advantage of this opportunity.

What do you think will happen as a result of this movement?

J.D. Power and Associates “2011 U.S. Retail Bank New Account Study” finds that shopping and switching rates are increasing; main drivers are…

  • Advertising
  • Branch convenience
  • Changes in life circumstances

Good news for institutions that are investing in providing a better customer experience and concerning for those that are playing catch up in this regard. It is evident that the larger banks are using Social Media to their advantage, and growing market share. Most Regional’s and smaller banks are not engaging in Social Media and are falling further behind the competition. With advertising being one of the main drivers of this study, one wonders when they will get onboard.

Social Media Image Management

Social Media Image Management

 

In 2011 8.7 percent of customers indicated they switched their primary banking institution during the past year to a new provider, according to the study, which examines the bank shopping and selection process, as well as customer satisfaction with the account initiation and on-boarding processes. This is a notable increase over the 7.7 percent of respondents who said the same in 2010. On average, customers in 2011 say they considered 1.9 banks while shopping — up from an average of 1.6 banks in 2010.

“The increased switching rate indicates more consumers are coming into the market, providing more opportunities for banks to acquire new customers,” said Clancy. “These customers appear to be more discriminating and diligent when selecting a new bank.”

The study indicates that banks that perform well in acquiring new customers tend to be aggressive in their advertising and promotions, and identified Chase, PNC Bank and SunTrust Bank as stand-outs in this regard.

“Customers who choose to stay with their current primary bank for additional products are most driven by positive past experience and perceptions that their bank is more focused on customers than on profits,” said Clancy. “Clearly, banks that are not providing a noticeably better experience are more likely to lose the business of indifferent customers who are more easily lured by the next attractive promotional offer to come along.”

What steps are you taking to ensure a positive experience for your customers?

Social Media adoption is severely lacking at smaller Credit Unions and putting them further behind as each day passes. In this fast paced business world, one can no longer stand idly by and expect business to run on autopilot. Those days are gone.

If the smaller Credit Unions expect to grow and survive, then they MUST adopt Social Media. This will allow them to engage their customers, fulfill their needs, improve their brand, and expand their reach.

“For social media marketing to have a major impact on profitability, credit unions must invest a significant percentage of their marketing budgets into social media.”

Credit unions on average invest only a paltry 2% of their total marketing budget on social media, although those figures are a bit skewed because nearly half of these institutions said their social media spending to date was simply too small to measure.

“Among intermediate and advanced firms, many are spending 10% to 25% of their overall marketing budget on social media efforts.”

LederMark Communications survey found that 85% of financial services professionals under the age of 50 are using social media to grow their business. That figure– as well as the demographics of advisors using these tools– will surely expand in the coming months and years as financial advisors and their firms become more comfortable and capable of securely tapping into the social networking community.

As your older members age, then how are the needs of the younger members going to be served? 85% and growing is a pretty compelling number. What’s the Credit Union Strategy? What is the leadership doing? What is the board doing?

Ignoring the problem

If the following statistics from CUNA aren’t the driving catalyst, than I don’t know what will.

Other than “When the pain becomes great enough, action will then occur.”

Credit Union mergers are getting bigger, so what is happening to:

  • Asset size of the various Credit Union Groups?
  • Loan size of the various Credit Union Groups?
  • Membership of the various Credit Union Groups?

These are statistics as of the 3rd. Qtr. 2010. Large is considered >$100 Million in Assets. While most would consider this large, banks such as J.P. Morgan Chase, Wells Fargo have asset sizes larger than ALL Credit Unions Combined!

The larger credit unions control 86% of all the assets. Asset growth has been 21.6% since the beginning of 2006, and has slowed quite dramatically with these economic conditions. However you would think that with the bashing of the banks these past few years, that it would have been dramatically higher. Why Not?

Lack of leadership, marketing and branding. Social Media has now entered the arena, only to be embraced by most of the larger credit unions. The smaller credit unions have a great opportunity that they are wasting, and getting further and further behind.

The larger credit unions control 87.75% of all loans granted. Loan growth has been 12.31% since the beginning of 2006 and falling dramatically recently.

The larger credit unions control 78.89% of all membership. Membership has only grown 5.03% since 2006 in total.

< $5 Mil $5-$20 $20-$100 > $100 Mil. Total
Total Assets $3,913 $23,423 $99,758 $792,900 $919,994
% of Total Assets 0.43% 2.55% 10.84% 86.19% 100.00%
Total Loans $1,951 $11,895 $56,361 $507,619 $577,826
% of Total Loans 0.34% 2.06% 9.75% 87.85% 100.00%
Total Members 1,117 4,321 13,988 72,593 92,019
% of Total Members 1.21% 4.70% 15.20% 78.89% 100.00%

What will the next 3-5 years look like for Credit Unions?

Facebook just passed 500 million users, Twitter just posted its 20th billion tweet, more video is uploaded to You Tube in 60 days than all 3 major US networks created in 60 years.

Social Media is not going away according to Harvard Business Review that states it is unstoppable. So where are the financial institutions of Memphis as it relates to Social Media? There is dead silence. Is it fear? Is it old world thinking?  Why the paralysis?

Current research continues to show that banks and credit unions lag behind the national average as it pertains to social media. Here in Memphis, we are further behind.  I know I worked at a local Credit Union, and have years of banking experience.

How sad…in era where you can reach out to your customers, members and embrace their concerns the banks and credit unions continue to hide like the wicked witch of the west.

Memphis, it’s time financial institutions embrace this new form of marketing. It’s not going away, and as my daddy taught me, it’s far better to be proactive than reactive.

Let me know your thoughts and comments as it pertains to Social Media and your financial institution here in Memphis.