Marketing budgets are being cut or unchanged year after year forcing bank marketers to continually to do more with less. While I could do an entire post on budgeting strategy, that post would inevitably find its way to a discussion on social media. Laura Pomerene, Marketing Director at First National Bank and Trust, would probably agree. Laura and her Marketing Coordinator colleague, Britney McKay, have recently introduced social media into their marketing plan (in April of this year) and the push to do this didn’t come about without a well thought out strategy according to Laura:
“It was important for us to first develop a strategy before jumping in feet first. A common perception by management was that we needed to take advantage of this ‘free’ medium. We were cautious not to blindly and badly throw a Facebook page out there without thinking about what we wanted to accomplish. We started when we felt comfortable with our initial strategy, which was to align our brand first with a community focus.”
What many banks don’t realize, is that social media won’t transfix your mission, vision and values, it will transform it. First National Bank does have a twitter account as well, but they don’t plan on implementing their strategy until next year. I would say that while social media is very important to the future relevance of your financial institution, a written down strategy of its intended use and maintenance are even more important, since as the adage says, “Failing to plan is planning to fail.” The last thing you want to do is engage in these social media networks and have them fall dormant. A study of 314 banks on twitter found that 1 in 5 of those banks became Twitter quitters. Social media is important, but so is heeding the advice from this study from TheFinancialBrand.com, showing that “many are just going through the motions, spewing lame tweets about rate changes or happy holiday wishes. These guys can probably find more productive things to do with their time.”
Now, if not right away, the social media discussion always turns to Return on Investment. ROI is important, but the on a 70,000 foot level, it should be seen more as ROR (return on relationships). Before First National Bank launched their Facebook page, they hired a company called General Sentiment to create a benchmark report, partially to determine what was and what is being said about them. In this process of creating a strategy and implementing some kind of ROI, Laura was careful to listen to one of her colleagues, Jeff Marsico as he pointed out that “if you’re measuring in terms of the number of eyeballs, you’ve just lost the credibility of your CFO!” As you plunge into your strategy you will repeatedly have to justify the time and future expense of what you are doing to get management buy-in.
“We looked at the competitors in our marketplace and very few are using social media well and none of them have really taken a strong role in thought leadership. We think this could have some enormous opportunity for us. The challenge we have is getting the buy-in to actively involve more of our talented employees in this process,” says Laura.
You first need buy-in of your management team on your initial strategy to get buy-in to use these talented employees. In the end it is a matter of showing social media as a solution to doing more with less and then involving the management team and talented front line employees to carry out the strategy that will become a big part of the future success of your bank.
Of course it’s not just banks that are in need of buy-in to get a social media strategy up and running. New research has found that 72 percent of businesses using social media do not have a clear layout of goals or strategy. As manifested before, a lot of this comes from not having a clear understanding of what the ROI looks like, something that keeps management from buy-in.
Rob Ployhart, a professor of business administration at the University of South Carolina’s Darla Moore School of Business, says that “the data businesses are looking for will be available within three to five years, making social media more credible in the eyes of some businesses. In the meantime, however, businesses can still utilize social media as a part of their business. Ployhart recommends businesses set clear goals and policies to maximize the impact that social media can have within an organization. Overall, Ployhart says businesses must have confidence in social media above all else in order to reap the benefits that it can offer.”
The take away here comes down to one word…strategy. Strategy can paint a picture of the benefits of doing more with less and what ROI looks like now and in the future. All of this provides a strong case to full company buy-in, specifically management.
“In today’s world, we are all interconnected. Companies that are thinking about this proactively are the ones that are probably going to have an advantage in leveraging this technology,” Ployhart said. “I’d be surprised if the first few companies that get in there don’t have a lasting competitive advantage.”
November 15, 2012 at 6:42 pm
Thanks for the ROR mention Matt. When someone asks me about the ROI of Social, the first thing I do is ask back… what is the ROI of Trust, what is the ROI of Loyalty… and let them chew on that a bit.
November 16, 2012 at 6:12 pm
Great thought Ted! Many banks claim to care about their customers, but really just want to know what is in it for them. When I was starting out as a financial advisor at Smith Barney, the first piece of advice I got was from a nearly retired advisor who said, “Do everything for your clients and always put them first. In time they will do the same for you.
So why aren’t banks doing the same. The first have to understand these millennials.
To quote one of our white papers:
“Young adults, more so than their predecessors, crave engagement with the brands they buy. Many post and re-post advertising or marketing clips to social media and video sites as a way to create a brand experience that is both relevant and customized. Meanwhile, user-generated content like online reviews and opinions of products has an influence on what they buy.
Despite having enormous purchasing power, young adults came of age in an uneasy time. Due to the recession and its long-term effects, they are reevaluating their spending habits and what makes them happy.
Transparency and authenticity are the two most important keys to effectively reaching young adults. While marketing to GenX had a very in-your-face attitude,
marketing today requires a focus on inclusiveness and potentially positive out-comes mirroring the socially conscious, globally minded, Internet-connected youth of today”
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November 27, 2012 at 4:33 am
Your post, Bank Spotlight: First National Bank – The Return on doing More with Less Matt Andresen, is really well written and insightful. Glad I found your website, warm regards from Ambrose!
November 29, 2012 at 10:17 am
That is a really good tip particularly to those new to the blogosphere. Short but very precise info… Appreciate your sharing this one. A must read post!
December 2, 2012 at 1:38 pm
Whether you want to call it “ROI” or “ROR” or any other “RO[x],” the first letter in the acronym stands for “Return.” Nearly all banks involved in social media struggle with quantifying any significant, measurable impact. Turning the question around by asking things like “What’s the ROI of Trust?” ignores the heart of the issue: What benefits does an organization yield in return for applying its time, money and resources to social media? Twisting the question is a way to deflect attention away from the uncomfortable truth: very few organizations can articulate any kind of Return on Social Media (the ROSMI, if you will).
There are studies in every industry that can demonstrate the financial value of trust and the value of loyalty; there’s no need to bob and weave by changing definitions. Social media? Not so much. You don’t hear CFOs and CEOs running around screaming about the ROI of loyalty and trust because their marketing departments aren’t going bananas over loyalty and trust strategies.
December 3, 2012 at 4:49 pm
I disagree. I am not a banking specialist by any means, but I am certain that banks have legacy data about trust and loyalty. They may not have had a “loyalty” program like many companies did in the past, or perhaps still do, but they have recorded data about instilling trust in the depositors, credit card holders, investors, etc. They will have data related to what the value is of a loyal customer, one who banks almost exclusively with them, and how that leads to more revenue and higher profit margins. Using social media platforms to enable to building of a stronger relationship, and deeper connection, with their brand will yield very similar results and some of that data can be applied. In addition, I am certain all banks, have used all forms of media to build their “brand,” media that is not simply trackable via clicks and conversions… TV, radio, magazines and newspapers. You can track your social efforts in much the same way utilizing KPI’s relevant to those interactions. It is all about taking the time and resources, like you did in the past with other mediums, to determine how to measure, what to measure and when to measure.
December 3, 2012 at 8:27 pm
I am enjoying the discussion thus far regarding ROI and ROR. It seems to me that given the way they are set up, credit unions focus more on return of relationships and banks are more focused on return on investment. When I was a banker, customer service was how you differentiated yourself from the competition and to provide good long term customer service, a relationship needed to be created and maybe even a friendship. Once a relationship is formed you can look for areas of ROI, but not until then. Using ROR instead of ROI may be the same thing, but using ROR puts the banker in a better mindset on where the foundation of that return comes from. Scott Stratten, author or UnMarketing: Stop Marketing. Start Engaging makes a good case for social media and ROR:
“Company reps always give me an excuse of why they can’t jump in (to social media). They say they have no time, there is no ROI, they have no control, or there is no geographical boundary if they they’re local. If you say you have no time to listen and to talk with people in your marketplace then you are saying you have no time for your customers. You need to make time to be in that conversation. If you believe business is built on relationships, then what could possibly be more important? Return on investment is one of the lamest excuses that I hear all the time. Most old school sales people could never calculate their effort in ROI in the first place…It is more ROR, Return on Relationships.”
December 3, 2012 at 8:55 pm
Great input Matt. Customer experience and customer service are critical parts of Return on Relationship.
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