FreshNetworks Blog

Following last week’s post exploring social media fears and opportunities for financial services brands, this blog post suggests three  ways that retail banks could make real, innovative use of social media to differentiate their products.

1. Social banking

Create a current or savings account with interest rates individually tailored based on a customers’ ability to recruit more members to the bank. New accounts could open with an average interest rate which increased by a small fraction each time a customer brought on a new member to join.

In the old days of member-get-member direct marketing, it was common for companies to offer discounts, gifts or value added services to customers who did the leg work in finding more customers. This model has now evolved into group buying from sites like Groupon, but there is evidence to suggest that “member get member” banking could work from Key Trade (under the control of Group Credit Agricole).

While Key Trade used a cash signup incentive, an interest based one would be a more meaningful commitment to a customer relationship and stronger motivator for recruiting new customers, particularly if interest rates could be competitive with current market offerings.

2. Social Micro Saving

Create a savings account which encourages you to micro-save via your social platforms. This could also be used to encourage micro-donation to charities. This could work quite effectively as a Facebook app which occasionally puts something into a subscriber’s news feed, reminding them to tuck £10 away in a savings account and make a small donation to charity.

Charitable donations website Just Giving noted the rise of social giving late last year and with the rise of applications like Snoball and SocialVibe, innovation is already beginning to harness the power of social donation behaviour to drive donations for charitable causes. If charitable donations can be contagious amongst social networks, it seems likely that social saving could be similarly rewarding and therefore contagious. Examples might include teams that are saving personal funds & raising charitable funds for expeditions, or groups saving towards a common goal such as holiday makers saving for a big trip.

3. Social Budget planning

Social gaming has proved itself remarkably addictive, but plenty of applications can the human desire to compete to good use. Mobile or social apps that let people compete over their personal budgeting targets could drive more careful budget planning & financial prudence.

As soon as NFC payment becomes a reality, mobile devices will be enabled to track spending both in terms of amounts and locations. If a couple, or group of friends decided to collectively budget towards a savings target, they could opt in to share how well they were performing against self-imposed goals. Personal financial data would remain private, but benchmarking against targets for lunch-time spending, for example, could earn gamers reward points & bonuses, just in the same way that FourSquare currently awards players with badges & Mayorships for check in achievements.

My purpose in exploring these ideas is to demonstrate the varied applications for integrating social media & social network behaviours with personal finance. With the growing popularity of The Co-Operative bank which offers customers a shared gains model and niche banks like Triodos offering consumer banking customers ethical and sustainable savings options, it’s not hard to imagine innovative, social financial products emerging as the financial services industry re-invents its public image.

The financial services industry feels like it’s not ready for social media. You may think that this is due to regulatory restrictions, but there is more to it than that – and there are opportunities for the brands that overcome these misconceptions:

1. Financial services companies are worried about the risk of brand damage if they start talking with people online, because the industry’s public image is seriously wounded.

It’s easier to pretend a relationship hasn’t been hurt than to talk about the awkward feelings, but the current fraught market offers a big opportunity to re-invent the relationship financial services firms have with customers. The public increasingly favours honesty & transparency. Who dares wins.

2. Consumer banking isn’t where financial services firms make their money, so the compliance & customer service burden of “switching on” social media doesn’t feel worth the investment.

This is a false economy, because the thing that makes social media so powerful is the way it enables small groups of motivated people to influence many people, very quickly. Financial services organisations put themselves at risk by failing to establish ways to connect meaningfully with customers online as well as in branches and over the phone.

3. Senior decision makers in the financial services sector still believe that social media effort will create the burden of monitoring new KPIs based on engagement metrics and Facebook likes.

The reality is different: these metrics are meaningless for senior people in organisations of all kinds. However, low-level social media metrics can be aligned with existing business metrics, like those normally used to measure customer acquisition and retention. If social media effort is to be useful, it should contribute to existing business aims and measures, not create new ones.

4. Of all industries, the financial services sector has been the slowest to catch on that social media isn’t just a marketing channel (see: social business).

Strategic uses of social media can include improving recruitment & internal career development; enabling teams working in different parts of the world to collaborate effectively or customer-led product innovation. The key to understanding the strategic importance of social media to an organisation is to understand what separates a business strategy from a plan for implementation. A business strategy describes a way to win in the marketplace given the competition and any external forces such as regulation. In an organisation of thousands, the strategic opportunity with social media may not involve marketing at all.

It may involve discovering how many hours are wasted per working week per capita on ineffective document collaboration or customer relationship management. Let’s assume replacing MS Word or Excel document control with a collaboration tool could save an average employee 1 hour per week for 48 weeks a year. An organisation of 5,000 employees paying £15/hour would save £3.6M pa .This would be a strategic use of social media which could give an organisation a genuine competitive advantage.

5. The financial services sector is concerned about the ROI of social media investment.

I heard a great story from @benjaminellis at a conference last year:

When the telephone came into popular use by the 1930s, salesmen knocked on the doors of big businesses and said: “You’re going to need phones to talk with your customers. To enable this new kind of connection, you’ll also need a room in your office filled with expensive equipment and new secretaries to route calls. You’ll also need to create a new role for an electricity manager, because the telephone system uses a lot power.”

That must have been a tough sales job. Decision makers would have asked “We’ve managed with face to face meetings and letters for decades – what’s the ROI of this investment? Are our customers even going to want to call us?”

10 years later, nobody was asking the ROI of the telephone. I doubt any organisation in the world now works out the ROI of having telephones on the desks of its employees. It’s just the way we do business. In 2021, every organisation will use social media to talk with their existing customers and to talk with prospects, whether they work in retail, financial services or FMCG.

Which means that right now in the financial services industry, there is a significant strategic opportunity to win in the marketplace by being the first to make the move.

Photo by Richard Fisher

Earlier this month I attended a lecture by Nik Gowing, BBC World News anchor for the channel’s flagship news programme, The Hub, which reports on global news.

The theme of the lecture was about the compression of world events as a result of the power of social media and mobile communications, followed by an (as yet unresolved) discussion about who controls information power in the world of social and mobile communication.

Gowing showed how social networks, multiple mobile phone bearing witnesses, video and photographic images shared to the web have become serious challenges to those in positions of power – ie, governments and global corporations.

Gowing described how disconnected systems are in place to deal with sudden comms or social media crises both within corporations and governments, pointing out their inadequacy in dealing with the new information landscape. He referred to this situation as  ’the tyranny of real time’, making power in today’s world both vulnerable and brittle.

For example, during the Millbank Tower riots in November 2011, the BBC news teams used video footage and Twitter reports from protestors to assemble the news story as it appeared, before the news crews could get on location to film.

Another example cited by Gowing was that of Zoltan Bakonyi, CEO of Mal Rt, the Hungarian Aluminium firm whose damaged silos spilled red toxic sludge into the local towns and countryside in October 2010. Because social media spread the message about what had happened, with reports, video footage and online comments appearing so quickly, Bakonyi was arrested within days of the toxic spillage:

With decades of experience in journalism behind him, Gowing also noted a shift in people’s behaviour because of the rise of mobile phones and social media. During natural disasters, riots or acts of terror, people immediately reach for their mobile phones and begin filming events as they unfold before them. This was evidenced widely during the Japanese Tsunami this year: for days and weeks afterwards new footage appeared from people who had filmed the events unfolding at great personal risk:

Asked whether he believed this was in an effort to gain money for their coverage, Gowing pointed out that the BBC seldom pays for such footage. He believes (as do we) that people are not so motivated by money as by the desire to share their experiences.

Key social and mobile learnings from the session

One of the biggest take-aways from the presentation was the sense that businesses and governments are ill prepared to deal with the massively reduced time between an event and mass public awareness.

Even news teams, better equipped than any corporate organisation to receive, interpret, fact check and then publish accurate information often struggle to keep up.

The challenge for organisations responding to events, especially comms crises, is the mediation, authentication and prioritisation of a massive volume of information. The reality is that organisations in 2011, from the UK government to BP, have failed to have put systems in place to respond appropriately to sudden, massive public awareness of an incident.

To Gowing, the brittleness of power in a digitally alert world is from the sudden deficit in legitimacy of power created when information spreads rapidly during a comms or social media crisis. Information is power; if organisations don’t have enough when they’re under the spotlight they look weak.

Ultimately, the corporate and government perception of “media” must shift. Media can no longer be controlled or managed. The media that exists today lies in the hands of 4Bn mobile phone users – essentially a public information space.

Although Gowing has been spreading this message for two years, organisations over the last year have failed to be ready for real-time information. The wisest ones looking ahead to 2012 will be asking whether they could have survived the big news stories of 2011 unscathed.

Here are 4 key questions organisations should be asking:

• How are we monitoring the public information space to we know what’s being said as quickly as the public?
• How many hours from news breaking to the first press questions do we have to brief senior people?
• What are competitors spending and what infrastructure are they building to deal with comms crises?
• How are brands and businesses safeguarding their online reputation on an ongoing basis?

Earlier this week Facebook launched a new page measurement which looks at the number of fans who “are talking about” a branded Facebook page.

The ‘People Talking About’ metric is a rolling average of the last 7 days of user-initiated activity on a specific page, which includes posting to the wall, “liking”, commenting or sharing one of the posts or a piece of content on the page, answering a Facebook Question posed to fans, or mentioning a page in a status update.

Here at FreshNetworks we’re very pleased with this new metric as it indicates a move away from measuring a page’s “success” through the number of likes or fans, and a move towards measuring real engagement  – something which we’ve always advocated.

With this in mind, we thought it would be interesting to use this new metric to assess which are the Top 100 most engaged pages on Facebook*. We think the list below sheds new light on which brands are achieving the most success with social media:

It’s interesting to note that Starbucks, who would be the number one most ‘successful’ page based on the traditional “like” measurement has now dropped to 58 based on this new engagement metric. Another example of this would be Coca-Cola. Mashable have posted a list noting the most talked about Facebook Fan pages by volume, in which Coca-Cola’s page appears #2. In our list above you don’t see Coca-Cola because, although they have an astonishing 34M fans, only 0.25M are engaging with the page on a weekly basis – i.e. they have a low engagement ratio for their number of fans.

Further, suspect that the extremely high “talking about” figures of Oreo India and Sony Ericsson India are the result of current Facebook advertising campaigns (see Famecount). And we can see from Louis Vuitton’s success in making it to #3, that a big event (their stunning fashion show last Monday at Paris Fashion Week) can have a fantastic impact on page activity.

*This list covers Facebook brand pages with over 500,000 fans, based on data from social analytics company Social Bakers. The calculation was made by dividing the total number “people talking about” a page by the number of page fans.

This weekend, FreshNetworks checked out the Swarovski Discover Your Light event, to experience a luxury brand social media campaign using SCVNGR. SCVNGR is a check-in app that sets users tasks or “challenges” to complete at certain locations.

First impressions

On arrival at the London Horticultural Society we were impressed to see hundreds of people queued up amongst dozens of support staff and film crew.

The event space looked fantastic with a light haze of smoke and bright beam lights cutting across the vast hall. Curtains of crystals hung either side of the stage and dazzled participants with shards of light.

Contestants were seriously impressed with the decor, lighting and staging – a great way to build excitement at the start of the event.

Above the line spending to draw the crowd?

500 teams of two participated in the hunt, so we were impressed by the 1000-strong crowd. It seemed like a big pull for a social media only event, so we dug around to find out where people had heard about it.

Answers included The Metro, Grazia, Stylist, London Underground billboards and Facebook as well as word of mouth. One pair heard from a friend in another country via Twitter! Sadly then, a significant ATL and PR spend rather than social media gets credit for pulling the punters.

The in-game experience was enjoyable. Over two hours we had 42 challenges to achieve by racing between different tasks on the Discover Your Light “Trek”. FreshNetworks achieved a worthy, but not winning 69 points, enjoying the walk (and an ice-cream).

Contestant feedback was great: “It was a wonderful way to explore central London. Karen and I spotted interesting landmarks we didn’t know existed before” and “it helped me learn a lot about central London & get my bearings around the city”, said two teams we asked.

Lessons to brands considering SCVNGR

So what did Swarovski get out of this? They’ve positioned themselves as innovators in digital, and they had a positive effect on the audience: “I almost went out to buy myself a Nirvana ring as I was so gutted not to win one” one participant told us.

There were three areas we felt could have been improved:

1. Swarovski made the good decision to give away low value freebies at their store checkpoints. However, one or two poorly briefed store staff kept freebies from participants who accidentally skipped over the task completion screen they were meant to show. An easy mistake for the participant, but it created a sense of poor customer service for a handful of people. Upset contestants being held up in the store demonstrated the need for staff to better understand the technology being deployed.
2. The second mistake was purely organisational. An hour and a half wait that resulted from the demand on the invitation for a 12:30 prompt kick off meaning everyone arrived at once. The long wait killed some of the excitement about getting started. This could have been better managed by the SCVNGR team with an open ended start (12:30-13:30) and a hard deadline for kick-off.
3. Finally, the SCVNGR app itself misses out on an opportunity for social sharing by embedding the share via Twitter & Facebook tools at the task completion stage. Most participants were too busy with the race to bother. It would make more sense for the app to invite you to connect social platforms with your account at sign in, allowing users to opt in to always share achievements. This would garner significantly more online buzz during big events like Swarovski’s Discover Your Light.